Renewable Heat Incentive replaced by Boiler Upgrade Scheme: what changed

Part of our guide on boiler upgrade scheme eligibility

Understand exactly which scheme replaced the Renewable Heat Incentive and how the new Boiler Upgrade Scheme changes your green home upgrade options.

What is the Renewable Heat Incentive (RHI)?

The Renewable Heat Incentive was a UK government scheme designed to encourage the installation of renewable heating technologies in homes and businesses. It offered payments based on the amount of renewable heat generated, typically lasting 7 years for domestic consumers.

Payments under the RHI depended on the type of heating system installed and the size of the property, with rates measured in pence per kilowatt-hour (p/kWh) of renewable heat produced. Systems qualifying included biomass boilers, heat pumps, and solar thermal panels.

The scheme aimed to reduce carbon emissions by making renewable heating financially attractive, with typical annual payments ranging from several hundred to over a thousand pounds for domestic users, depending on usage and system efficiency.

The RHI was split into two: the Domestic RHI for residential properties and the Non-Domestic RHI for commercial and public sector buildings. People in this spot often ask about what happened to the green deal and green deal finance as well.

Which scheme replaced the RHI?

The Renewable Heat Incentive was replaced by the Boiler Upgrade Scheme (BUS) in April 2022. Unlike the RHI’s payments over time, the BUS provides an upfront grant to help cover the initial cost of installing efficient low-carbon heating systems.

The BUS mainly targets heat pumps—air source and ground source—as well as biomass boilers, prioritising technologies that substantially reduce carbon emissions compared to gas or oil boilers.

This replacement aims to accelerate the adoption of greener heating by reducing the financial barrier at installation, rather than relying on long-term incentive payments. There is more on qualifying for heat pump support in a separate guide.

The scheme applies throughout Great Britain but has Scotland and Wales variations on eligibility criteria and scheme administration.

The Boiler Upgrade Scheme also introduces a limited budget allocated annually by the government, which means grants are available on a first-come, first-served basis until the funds run out. This contrasts with the RHI, which accepted applications continuously over many years. As a result, applicants under BUS must act promptly when booking installations to secure funding.

In addition, the BUS has set maximum heat pump system sizes that qualify for grants, typically up to 45 kW thermal output. Systems larger than this may not be eligible, reflecting the scheme's focus on domestic and small-scale properties rather than large commercial installations. This size cap ensures the scheme targets typical household heating needs rather than industrial-scale projects. There is more on who qualifies for free insulation grants in a separate guide.

Key differences between RHI and its replacement

The core difference is the payment method: RHI provided ongoing payments linked to heat generated; BUS gives a one-time upfront grant of £5,000 for heat pumps or £6,000 for biomass boilers.

RHI rewards performance and usage over time, making it suitable for those who intend to use renewable heat heavily and long term. BUS focuses on lowering installation cost barriers to increase uptake quickly.

Eligibility under BUS requires the new heating system to meet strict efficiency and installation standards, often including that the property must have a minimum EPC rating (usually D or higher) and suitable insulation. Before you commit to anything, it is worth looking at checking eligibility before deadline.

RHI was open to both new builds and existing buildings; BUS also applies mainly to existing residential properties upgrading from fossil fuel boilers.

Administrative processes also differ: BUS requires applicants to use MCS (Microgeneration Certification Scheme) certified installers who manage the grant application.

Who qualifies under the new scheme?

To qualify for the Boiler Upgrade Scheme, you must be a UK resident or landlord upgrading an existing fossil fuel heating system in a domestic property. The property usually must have an EPC rating of D or above to ensure reasonable energy efficiency.

Eligible heating systems include air source heat pumps, ground source heat pumps, and biomass boilers that comply with specific energy performance standards.

Applicants must install the new system through an MCS certified installer who will submit the grant application on their behalf. Self-installation or uncertified installers disqualify the project.

Properties currently using electric heating, solar thermal, or already on renewable heat systems are typically not eligible. The scheme targets fossil fuel boiler replacements to drive carbon reduction.

Landlords, owner-occupiers, and those with shared ownership can apply, provided the property meets scheme criteria and the applicant has installation control.

There are some exceptions under the scheme for off-gas grid properties, which may have slightly different eligibility criteria or additional support options. For example, households not connected to mains gas supply might qualify more readily for certain biomass boilers or ground source heat pumps, reflecting the higher urgency to replace oil or coal heating in these areas.

Applicants must also demonstrate that the property currently uses a fossil fuel heating system, such as gas, oil, or LPG boilers, as the scheme aims to replace these with low-carbon alternatives. Properties already using electric or renewable heating methods, including heat pumps installed before the scheme, are generally excluded to prevent double funding.

The scheme requires that the property owner or landlord has legal authority to make heating system changes, which occasionally complicates applications for tenants or shared ownership arrangements. In such cases, written permission from the freeholder or managing agent may be necessary to proceed with installation and grant claims.

How to apply for the replacement scheme

You cannot apply for the Boiler Upgrade Scheme yourself; instead, your MCS certified installer submits the application when you agree to proceed with installation.

The process starts with an assessment of your property’s suitability and energy efficiency. Your installer will check the EPC rating and recommend appropriate systems.

Once you accept a quote and hire a certified installer, they register your installation with the scheme. After installation and inspection, the grant is paid directly to the installer, who should deduct it from your final bill.

Keep all paperwork, including the EPC, installer certification, and installation details, as the scheme administrators may request evidence.

Following these steps ensures your upfront grant is secured and reduces installation cost effectively.

1. Find an MCS certified installer qualified for BUS applications.
2. Get an energy assessment and quote including eligibility check.
3. Agree to proceed with installation and sign contract.
4. Installer submits BUS application on your behalf.
5. Complete installation and final inspection.
6. Installer receives grant and applies it to your bill.

What replaced the Renewable Heat Incentive means for your home upgrade

The shift from RHI to the Boiler Upgrade Scheme means upfront savings instead of slow, performance-based income. For most homeowners, this makes the investment in heat pumps or biomass boilers more accessible.

Keep in mind that the upfront grant requires meeting stricter installation and property efficiency criteria, often meaning you’ll need to improve insulation or meet a minimum EPC rating to qualify.

This approach suits those who prefer immediate financial support and want to move quickly to lower carbon heating, but it demands careful planning with professional advice.

Investing in an EPC assessment meter or requesting an up-to-date EPC report is a vital first step to confirm eligibility.

Knowing these changes helps you avoid wasted effort on schemes no longer available and directs you to the current best government support.

Questions people still ask

Having installed heat pumps under both RHI and BUS, I’ve seen how the upfront grant model makes the upgrade decision easier for most homeowners.