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The majority of households use gas boilers to provide their heating and hot water, and these account for much of a household’s domestic energy usage. But old, inefficient boilers are expensive to run, meaning high energy bills, and they’re also a major contributor to climate change, polluting the air with carbon emissions.

According to the Energy Saving Trust, low-performance boilers could add more than £300 to annual energy bills. Additionally, old inefficient boilers can have energy efficiency as low as 60%, meaning around 40% of the energy they use effectively goes to waste.

This is why the government has run various grant schemes over the years to help people replace old boilers with new, energy-efficient models that offer long-term financial and environmental benefits. One of these initiatives was the Boiler Scrappage Scheme. It was immensely popular but didn’t last long because it had a finite amount of funding.

The good news is that there are numerous other ways to minimise the cost of a new boiler or in some cases get one for free. Funding is also available for energy efficiency improvements such as heat pumps, solar panels, double glazing, and insulation.

You can find out here what these eco initiatives offer and how they compare with the old Boiler Scrappage Scheme.


How Did the Boiler Scrappage Scheme Work?

The Boiler Scrappage Scheme offered £400 towards the cost of a new, energy-efficient boiler. The money came as a rebate from the Energy Saving Trust, plus several major energy companies matched this amount, so many households received £800 towards a new condensing boiler.

Condensing combi boilers achieve more than 90% energy efficiency by converting water vapour into heat rather than losing it to the atmosphere.

The Boiler Scrappage Scheme was a first-come-first-served voucher-based initiative that worked on similar lines to car scrappage schemes.

It proved so popular that the funding was all allocated and the scheme closed just three months after its launch in January 2010, with all the allotted 125,000 vouchers taken up.

The Boiler Scrappage Scheme was fairly limited in its scope. The £400 vouchers were available only to homeowners and landlords in England with the least efficient, G-rated boilers.

Although the term “boiler scrappage scheme” is still in common use, it actually refers to the current eco-friendly initiatives offering help with the cost of new boilers.


Why the Government is Continuing to Help with the Cost of Boilers

Although the Boiler Scrappage Scheme no longer exists, there are now several other ways to get help towards the cost of a new boiler. These grants are made available as part of the government’s commitment to achieve net zero carbon emissions by 2050.

Replacing old, inefficient boilers results in lower heating bills because modern, A-rated boilers are cheaper to run – a crucial factor for low-income families and people considered at risk of fuel poverty. High-performance boilers also significantly reduce the carbon footprint.

However, the cost of installing a new boiler is also significant, and many families would be unable to install one without some form of financial aid. To help out, the government and energy companies run schemes that enable households to get a new boiler at a subsidised cost or in some cases completely free. 

We’ll look at one of the most popular of these schemes here, plus other types of grants for energy efficiency improvements.


Energy Company Obligation Scheme

Most of the main energy companies are part of the government-backed Energy Company Obligation (ECO) Scheme, often called the boiler grant scheme or just a boiler grant.

This funding covers all or most of the cost of switching to a cleaner, greener boiler for homeowners on benefits who have an old, broken, or inefficient boiler.

Although various forms of funding are available for new boilers, the ECO initiative is one of the most popular and widely used.


ECO Grant Eligibility

To be eligible for a grant under the Energy Company Obligation Scheme, you need to be receiving an income-related benefit such as:

  • Universal Credit. 
  • Income Support. 
  • Income-related Employment and Support Allowance (ESA).
  • Income-based Jobseeker’s Allowance (JSA). 
  • Housing Benefit.
  • Working Tax Credit.
  • Child Tax Credit.
  • Pension Savings Credit.
  • Pension Guarantee Credit.
  • Disability Living Allowance (DLA).
  • Personal Independence Payment (PIP).

Your gas boiler also has to be more than 10 years old. If it’s a newer model, it’s assumed that repairing it would be cheaper than replacing it.


Which Energy Companies Offer ECO Grants?

The Energy Company Obligation Scheme is funded by major energy companies including:

  • British Gas.
  • E.On.
  • Octopus.
  • EDF.
  • OVO.
  • Scottish Power.


Boiler Upgrade Scheme

The Boiler Upgrade Scheme (BUS) gives grants to homeowners and private landlords in England and Wales who replace gas, oil or electric heating with a low-carbon system like a heat pump.

The scheme offers up to £7,500 towards installation of an air-source heat pump or ground-source heat pump. 

Air-source heat pumps take heat from the outside air and compress it to heat your home and your water.

Ground-source heat pumps work in a similar way but pull heat from the ground beneath your property.

You don’t apply for a Boiler Upgrade Scheme grant yourself. The heating system installer will do it on your behalf, provided they’re registered with the scheme.

The £450 million allocated to the initiative is expected to fund installation of 90,000 heat pumps by 2025 – far fewer than the 600,000 a year announced in November 2020.

The grants aren’t designed for replacing existing low-carbon heating systems, only replacement of fossil fuel heating systems such as gas and oil, and direct electric heating.


Biomass Boiler Grants

The Boiler Upgrade Scheme also provides £5,000 towards the installation of a biomass boiler. Biomass boilers burn logs, wood chips and wood pellets and other biological materials to provide heating and hot water.

Biomass boiler grants are limited to households in rural areas with no connection to the gas grid.


Home Upgrade Grant in England

If you’re on low income, off the gas grid, and your home has a low energy performance certificate (EPC) rating (D to G) you may qualify for a Home Upgrade Grant (HUG). 

This could include:

  • Double glazing.
  • Solar panels.
  • Air-source heat pumps. 
  • Boiler upgrades.
  • Loft, wall, and underfloor insulation.
  • Energy-efficient lighting.
  • Energy-efficient storage heaters.

The Home Upgrade grant is only available to people in certain postcodes in England. You can contact your local council to see whether you’re eligible.


Nest Scheme in Wales

The Nest scheme offers free energy efficiency improvements to people in Wales suffering from long-term illness and on a low income.

If you have a chronic respiratory, vascular or mental health condition, and get a means-tested benefit, you could be eligible for a new boiler, solar panels, or home insulation.


Warmer Homes Scheme in Scotland

In Scotland, you can apply for a grant of up to £9,000, depending on your location, to help fund energy efficiency improvements including central heating, radiators, heating controls, and draught-proofing and insulation. 

You have to be in receipt of certain benefits, or over 75 with no working heating system. 


Affordable Warmth Scheme in Northern Ireland

Northern Ireland’s Affordable Warmth Scheme offers grants for a range of energy-efficient measures such as insulation and new heating systems including full conversion from oil-based heating to gas

You could be eligible for one of these grants if your household income is less than £23,000 a year.


Final Thoughts

The Boiler Scrappage Scheme may now be a distant memory but the push towards net zero has driven many other similar grant initiatives. These make energy efficiency improvements such as boiler upgrades and heat pumps affordable to thousands of householders who would otherwise miss out on the environmental and cost benefits of green energy.


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