The Boiler Upgrade Scheme (BUS) is the UK government’s flagship subsidy scheme for heat pumps. Since it launched in April 2022 it has supported the installation of almost 80,000 heat pumps across England and Wales. Most of these (98%) are air source heat pumps.

Here are four charts digging into the scheme's delivery across England and Wales.

BUS supported 30,600 air source heat pumps in 2025/26, up from 24,700 the year before, a 24% increase. This is a slower growth rate than previous years, and is not enough to meet the UK government’s near-term targets. In order for the UK to install 450,000 heat pumps a year by 2030 BUS needs to grow to support around 150,000 annual installations (including the planned expansion to cover air-to-air heat pumps).

However, if it continues to grow at 24% per year it will only deliver around 59,000 in 2029/30, only 39% of the total number we expect the UK government needs to meet its targets. The UK government is providing enough funding to meet these numbers through the Warm Homes Plan, but other policy work is needed to capitalise on that and accelerate the electrification of heat.

The median cost of an air source heat pump installation (in real terms) – including the unit cost, installer fees and associated home upgrade costs – rose slightly this year, from £12,973 to £13,041 (an increase of 0.4%). Overall the median cost has fallen by 11% since the scheme launched in 2022.

At the start of the scheme, over 35% of heat pump installations were 12kW or larger. Many of these were replacing oil boilers in larger, rural homes. As BUS has grown the share of larger installations has fallen to 18%, and most are now between 4kW and 12kW. While the headline decrease in cost is partly driven by this shift to smaller (cheaper) installations, we can see that prices have tended to fall for all sizes of installation. One notable exception this year are installations between 4kW and 6kW, where the median price rose by 11% year-on-year.

As of this year a majority of all BUS grants since the scheme launched (52%) have gone to homes in urban areas, as the general trend towards smaller installations in homes using gas boilers continues.

The Boiler Upgrade Scheme is working, undoubtedly helped by its simplicity and the generous (and consistent) funding settlement - both things we have praised DESNZ for. However it seems clear that funding can only take us so far. Despite growing the number of heat pumps installed, BUS spent less of its budget this year than the year before. The annual budget increased by 64% (to £295 million, from £180 million in 2024/25) and will increase to £625 million in 2026/27. This means that BUS will need to more than double the number of grants it provides to keep pace.

The economics and practicalities of heat pumps have always been better for homes that use oil or LPG boilers. These conditions could favour heat pumps even more following the latest energy crisis, and the UK government’s decision to increase the BUS grant to £9000 for homes using heating oil and LPG. So we may see the share of grants going to rural areas, or homes using those fuels, increase in the next year of the scheme. The increase to £9000 will reduce the maximum number of grants BUS can provide, but given that we expect it to struggle to spend all of its budget, this may be a prudent move to accelerate uptake.

The steady fall in installation costs is encouraging, but if we are going to transition away from subsidies then heat pumps need to continue to get much cheaper. Taken with the other trends this points to other gaps in policy that need to be addressed to help sustain progress. These include doing more to support a growing cohort of skilled installers, addressing the high price of electricity (especially relative to gas), and helping consumers with better advice, protection, and support, including new and improved finance offers for electric technologies.