Grant to replace oil boilers with heat pumps boosted to £9,000 as prices bite

Households struggling with the soaring costs of heating oil will get bigger grants to replace their oil boilers with electric heat pumps, the Government has announced.

Ministers are increasing grants under the “boiler upgrade scheme”, which provides £7,500 for households to replace their fossil fuel boiler with a heat pump, to £9,000 for properties reliant on heating oil and LPG.

Officials say the move will help households and small businesses in England and Wales, particularly in rural areas, to electrify their heating and get greater certainty over their energy bills.

Families heating their homes with heating oil or LPG have faced soaring costs in the wake of the Iran war.

Figures show prices for heating oil – which is not covered by the Ofgem energy price cap that protects consumers with gas boilers from extreme energy price spikes – doubled to record levels between February and March.

The Government has already announced £53 million in targeted support for “vulnerable” heating oil consumers, focused on “those households that are most exposed”.

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Heating oil and LPG customers have been among the hardest hit by the current crisis.

“The three million households relying on these fuels sit outside the energy price cap and have no equivalent protection when global prices spike.

“These households are disproportionately in rural areas, have lower incomes, and live in older, harder-to-upgrade properties.”

He said the £9,000 grant for these homes would be “very welcome”, but it may not totally bridge the gap for those who could not afford the remaining costs or whose homes need significant work to prepare them to use a heat pump.

An air source heat pump costs £11,000 to install on average, though the cost varies on the size of the heat pump, the size and age of the property, and any upgrades such as new radiators that are needed, according to the Energy Saving Trust.

Mr Francis said: “Therefore, the expansion of this scheme must be accompanied by specialist local advice for households, stronger consumer protections during the works, and targeted additional support for those who cannot meet the shortfall.

“The measure of success is not how many grants are issued, but whether the households most exposed to fossil fuel price shocks are genuinely better off as a result,” he added.