Ofgem’s administration of the Boiler Upgrade Scheme

Ofgem have been identified by the Department for Business, Energy and Industrial Strategy (BEIS) as the intended administrator of the Boiler Upgrade Scheme (BUS).

The BUS is expected to launch in Spring 2022 in effort to aid the decarbonisation of buildings and reduce the UK’s carbon footprint through providing upfront capital grants to support the installation of heat pumps and biomass boilers in homes and some non-domestic buildings across England and Wales.

The BUS aims to incentivise and increase the deployment of heat pumps by providing targeted support to installers. Grants of £5000 will be available for Air Source Heat Pumps and biomass boilers, and grants of £6000 will be available for Ground Source Heat Pumps with an overall budget of £450 million.

BUS is open to applications for three years from spring 2022 and Ofgem’s current proposals clearly outline how the administration of the voucher scheme is intended to work and helps to identify the pivotal role of installers in the process.

BUS is an installer lead application process, and applicants to the scheme will need to be Microgeneration Certification Scheme (MCS) accredited (or equivalent scheme) installers of heat pumps or biomass boilers. (MCS) accredited (or equivalent scheme) installers will need to apply to Ofgem for a voucher on behalf of a property owner, who must consent to the application.

The BUS will comprise of a two-stage voucher application process and installers will need to submit two applications in total: first a BUS voucher application and then a redemption application.

For an installer to successfully receive a grant, there are certain eligibility requirements that must be met. It is important for installers to be familiar with the eligibility criteria before they start their applications.

The BUS voucher application will require installers to submit supporting evidence to Ofgem to demonstrate their eligibility and confirm details of the property and low carbon heating system they intend to install. As part of the application process, Ofgem will also be required to gain confirmation from the property owner that they consent to the installer making an application on their behalf.

Installers will also be required to create a BUS online account prior to applying for their first BUS voucher. The account will allow installers to submit and track the status of their applications, manage any organisational information, add and remove users and review the status of their applications.

If the first BUS voucher application meets all the eligibility criteria and once Ofgem are satisfied the application can be approved, they will issue a BUS voucher which will be valid from the time of issue. Vouchers for ASHPs and biomass boilers will be valid for three months from the time of issue and vouchers for GSHPs will be valid for six months. Vouchers issued are not a guarantee of payment and the second application, the redemption application, is also subject to full eligibility criteria being met.

Once a voucher has been issued, installers will then complete their installation and will then be required to submit their second application, the redemption application. This needs to be submitted to Ofgem using their BUS online account within the voucher validity period. Installers will again need to submit evidence to demonstrate that eligibility criteria have been met at both stages of the process.

If Ofgem are satisfied that a voucher redemption application meets all requirements, they must notify the installer that their application has been approved and make a payment to the installer for the value set out in the voucher. Ofgem intend to make a payment to the installer for the amount associated with the redeemed voucher within a week of the notification that the application has been successful.

A maximum of around 90,000 homes will be able to take advantage of the grant over a 3-year period and the scheme will operate on a first come, first served basis. If an application is made after budget limits have been met, then vouchers may not be issued, and installers risk being put on a waiting list for their grant.

Full details on the BUS and the Ofgem consolation can be found here: https://mcusercontent.com/a18e0c1144486957bd8d31eae/files/3719241e-01df-2680-bc79-cbeb30493bb0/Administration_of_the_Boiler_Upgrade_Scheme_Ofgemconsultation_4_.pdf