Replacing an Oil or LPG Boiler with a Heat Pump: The £9,000 Grant Explained#

If your North East property is heated by oil or LPG and has no mains-gas connection, you may now qualify for £9,000 towards an air-to-water or ground source heat pump through the Boiler Upgrade Scheme.

The enhanced grant became available on 21 July 2026 and is scheduled to remain available for eligible applications until 31 March 2027. It is £1,500 more than the standard £7,500 heat-pump grant.

The grant can make replacing an oil or LPG boiler considerably more affordable, but it does not mean every installation will cost only the difference between a headline heat-pump price and £9,000. A proper proposal must also consider the building’s heat loss, radiators, pipework, hot-water cylinder, electrical supply and any work associated with the old fuel system.

Who qualifies for the £9,000 heat-pump grant?#

The enhanced Boiler Upgrade Scheme grant is deliberately targeted at certain off-gas-grid properties.

To qualify, the property must:

• Be in England or Wales.
• Be heated by oil or LPG before the installation.
• Have no mains-gas connection.
• Not have a record of an existing gas meter point.
• Not be connected to a heat network.
• Be replacing the existing heating system with an eligible air-to-water or ground source heat pump.
• Meet the wider Boiler Upgrade Scheme rules.

The off-gas definition is important. Simply capping or clamping an existing gas supply does not normally turn a gas-connected home into an eligible off-gas property for the £9,000 rate.

The standard £7,500 grant may still be available for other qualifying heat-pump installations, including many homes replacing a gas boiler. Final eligibility is assessed through the official scheme process rather than guaranteed by an installer before the required evidence has been checked.

What does the £9,000 grant cover?#

The grant contributes towards the cost and installation of an eligible heat pump. It is not a cash payment made directly to the homeowner.

The process is installer-led:

1. You contact an MCS-certified installer and discuss the property.
2. The installer assesses suitability and prepares a quotation.
3. The £9,000 grant must appear as an upfront deduction on the quotation.
4. Once you agree the proposal, the installer applies to Ofgem on your behalf.
5. Ofgem contacts you to confirm that the installer is acting for you.
6. Following approval, installation and redemption, the grant remains deducted from the amount you pay.

The full grant value should also be shown on the final invoice. You should not be asked to pay the grant amount to the installer and reclaim it later.

How much does replacing an oil boiler with a heat pump cost?#

The Energy Saving Trust currently gives a typical air source heat-pump installation cost of around £11,000. That is a useful national guide, not a quotation for a particular North East property.

Actual costs vary because changing from oil or LPG may involve more than replacing one appliance. The project could include:

• A heat pump selected to match the calculated heat loss.
• A suitable hot-water cylinder.
• Radiator or other heat-emitter upgrades.
• Alterations to narrow or unsuitable pipework.
• Electrical work and the required supply arrangements.
• Heating controls and weather compensation.
• Removal or safe decommissioning of the existing boiler.
• Work associated with the oil tank or LPG storage arrangement.
• System cleaning, insulation, commissioning and certification.

The £9,000 grant is deducted from the agreed eligible installation price. A relatively straightforward property may therefore require a much smaller customer contribution than a complex rural retrofit, but it would be misleading to advertise one universal “price after grant”.

Enerus provides a fixed proposal after assessing the property and designing the system. That lets you see the expected work, grant deduction and remaining cost before committing.

Will an air source heat pump work in an older rural home?#

Often, yes. A heat pump is not restricted to new builds or perfectly insulated homes. The real question is whether the complete heating system can meet the building’s room-by-room heat loss at an appropriate flow temperature.

An appropriate assessment should consider:

• Wall, floor and roof construction.
• Windows, doors and ventilation heat loss.
• Room dimensions and design temperatures.
• Existing radiators or underfloor heating.
• Pipe sizes and routes.
• Space for an outdoor unit and hot-water cylinder.
• The household’s hot-water use.
• Electrical supply and proposed controls.

Improving insulation can reduce heat demand, running costs and the size of equipment required. The installer should follow the current eligibility rules and separately explain any fabric improvements that would genuinely benefit the home.

Will all the radiators need replacing?#

Not necessarily.

Oil boilers commonly operate at higher water temperatures than a well-optimised heat pump. At a lower flow temperature, an existing radiator releases less heat, so each room needs to be checked against its calculated heat loss.

Some radiators may already be large enough. Others may need to be replaced with a larger panel radiator or a different emitter. In some properties, targeted upgrades are sufficient; in others, more extensive changes are sensible.

The right method is to calculate each room rather than assume every radiator can stay or insist that every radiator must go.

Pipework matters too. A radiator may be large enough but unable to receive the necessary water flow through restrictive pipework. This is why the heating system should be designed as a whole.

What happens to the oil tank or LPG supply?#

The old fuel system needs a specific plan.

An oil tank may be emptied, cleaned, decommissioned or removed, depending on its condition, location and the agreed scope of work. Access can affect what is practical. LPG cylinders or a bulk tank may be owned by the fuel supplier, so the customer may need to arrange collection or discuss the contract with that supplier.

Do not assume tank removal is included in every heat-pump quotation. Ask the installer to state clearly:

• Who is responsible for the remaining fuel.
• Whether the boiler and fuel line are being removed.
• Whether tank decommissioning or removal is included.
• Whether any making good or landscaping is included.

Keeping this separate and explicit prevents surprises later.

Do you need a hot-water cylinder?#

Most air-to-water heat-pump systems providing domestic hot water use a cylinder.

If you already have an oil or LPG system boiler with a suitable cylinder, the designer will assess whether that cylinder can form part of the proposed system. If you have an oil combi boiler and no stored hot water, space for a correctly sized cylinder will normally need to be found.

Cylinder selection should reflect the household’s hot-water demand, available heat-pump output, recovery requirements and available space. It should not be chosen from bedroom count alone.

Will a heat pump be cheaper to run than oil or LPG?#

It can be, but there is no honest universal answer.

The result depends on:

• The efficiency and condition of the existing boiler.
• The seasonal efficiency of the new heat pump.
• The home’s annual heat and hot-water demand.
• Oil or LPG prices.
• The electricity tariff.
• The designed flow temperature.
• How the controls are configured and used.

The Energy Saving Trust says heat pumps should generally be cheaper to run than many fuel types, but replacing a newer oil boiler can sometimes result in slightly higher running costs on a standard electricity tariff. A strong heat-pump design and a suitable tariff can change that comparison significantly.

Enerus’s approach is to estimate performance from the proposed system design rather than promise savings from a generic national average. Lower flow temperatures, correctly sized emitters and well-configured weather compensation all help the heat pump convert electricity into useful heat efficiently.

The practical journey from oil or LPG to a heat pump#

The process should move through five clear stages:

1. An initial conversation about the existing fuel, property and likely grant position.
2. A technical survey and room-by-room heat-loss calculation.
3. A complete design and fixed proposal showing required changes and the grant deduction.
4. An installer-led voucher application, followed by the owner’s confirmation to Ofgem.
5. Installation, commissioning, user instruction and documented handover.

Enerus’s design-first approach brings the heat pump, radiators, pipework, hot water and controls into one proposal before installation begins.

Frequently asked questions#

Does the £9,000 grant apply to LPG as well as heating oil?#

Yes. GOV.UK states that the additional £1,500 is available where the property is heated by oil or LPG and has no mains-gas connection, subject to the full scheme rules.

When did the £9,000 grant start?#

The uplift became available for eligible off-gas-grid properties from 21 July 2026. Ofgem currently states that it is available until 31 March 2027.

Can I receive the £9,000 into my bank account?#

No. An MCS-certified installer applies on your behalf and shows the grant as a deduction from the quotation and invoice.

Is the grant based on household income?#

The Boiler Upgrade Scheme is not presented as a means-tested grant. Eligibility is based on the property, existing heating system, proposed technology, ownership and the wider scheme requirements.

Can I get £9,000 by disconnecting my mains gas?#

Not normally. Ofgem says a capped or clamped gas meter point is still treated as mains-gas fuelled for the enhanced grant, and a record of an existing gas meter point can also prevent the property qualifying as off-gas under the uplift rules.

Can I keep my oil boiler as backup?#

The BUS does not fund a hybrid heat-pump system combining a fossil-fuel boiler with a heat pump. The proposed installation needs to meet the scheme’s replacement and technology requirements.

Do I need an EPC?#

If a property has a valid EPC, the installer must provide its number. Ofgem’s current installer information says alternative evidence is required where there is no valid EPC. The installer should check the current evidence requirements for the individual application.

Find out whether your North East home qualifies#

The £9,000 grant creates a particularly strong opportunity for oil- and LPG-heated properties across rural County Durham, Northumberland and the wider North East.

The next step is not to select a heat pump from a product list. It is to establish eligibility, calculate the property’s heat loss and understand what the complete changeover would involve.

Enerus is MCS certified and provides design-led air source heat-pump installations, fixed proposals and Boiler Upgrade Scheme support.

Book a free heat-pump assessment or call 01740 669 585 to discuss your current oil or LPG heating system.