Energy Efficiency Grants UK: BUS, ECO4 & GBIS Guide

Summary

The UK government has operated a series of grant and subsidy schemes aimed at improving the energy efficiency of homes and reducing carbon emissions from domestic heating. The landscape of these schemes changes regularly — some are time-limited, some are ongoing, and some have been announced but not yet fully operational. This article covers the active schemes as of August 2026, following the launch of the Warm Homes Plan and the closure of GBIS and (imminently) ECO4.

For tradespeople, understanding these schemes matters directly: they drive demand for insulation, heat pump, and solar work. Being MCS-certified or working for an MCS-registered company is a prerequisite for accessing the most generous grants. Advising clients correctly about what they are eligible for — and being clear about the application process and installer requirements — builds trust and can be a significant competitive differentiator.

The correct approach is always to be accurate about eligibility. Overpromising on grants and then failing to secure them for clients damages relationships and reputation. The schemes described here have specific eligibility criteria, and these must be assessed for each individual property and household before quoting.

Key Facts

• Boiler Upgrade Scheme (BUS) — £7,500 for air or ground source heat pumps; £5,000 for biomass boilers; replaces the domestic Renewable Heat Incentive; funded to early 2028 at the current level. A temporary uplift to £9,000 for ASHP/GSHP applies to eligible off-gas-grid homes reliant on heating oil or LPG only, from 21 July 2026 to 31 March 2027 — not available to homes on mains gas
• MCS certification — Microgeneration Certification Scheme; mandatory for the installer applying for BUS; the heat pump or biomass system must also be MCS-certified
• BUS application process — installer applies after installation is complete; voucher is issued by Ofgem to the installer who redeems it; grant is deducted from the customer's invoice
• ECO4 (Energy Company Obligation) — energy supplier obligation scheme; free insulation and heating improvements for low-income or fuel-poor households; funded by energy suppliers (passed to all customers via bills). Closed to new applications in March 2026; approved installations continue until the scheme ends on 31 December 2026
• ECO4 eligibility — household must meet an income threshold OR qualify via ECO Flex (LA referral); property must be EPC D, E, F, or G; typically requires owner-occupier or private tenant with landlord consent
• GBIS (Great British Insulation Scheme) — closed to new applicants in October 2025 and ended entirely on 31 March 2026. It was not replaced with a like-for-like successor; its insulation remit has rolled into the Warm Homes Plan rather than being reissued as a standalone scheme
• ECO4 fabric first — insulation improvements take priority over heating upgrades under ECO4; the scheme targets the fabric of the home before adding a heat pump
• 0% VAT on energy efficiency products — since 1 April 2022, insulation, solar panels, heat pumps, wind turbines, and other energy saving materials attract 0% VAT; installation labour is also 0% for qualifying products
• Green Homes Grant Vouchers — ended February 2022; no longer available; superseded by GBIS and BUS, both now themselves superseded/absorbed (see Warm Homes Plan)
• Warm Homes Plan — published as a full policy document on 21 January 2026; just under £15 billion in capital investment, the government's headline programme to upgrade up to 5 million English homes and lift up to 1 million families out of fuel poverty. It brings together the Warm Homes: Local Grant (up to £15,000 for eligible low-income households, delivered via local authorities, running to March 2028) and the Warm Homes Fund (low/zero-interest consumer loans for households that don't qualify for a grant; detailed terms still being finalised through 2026), alongside the continuing Boiler Upgrade Scheme
• Salix Finance — UKRI-funded body providing interest-free loans for energy efficiency in public buildings (schools, hospitals, local authority buildings); relevant for trades working in public sector
• Local Authority Delivery (LAD) — direct council grants for insulation and low-carbon heating; schemes vary by authority; largely superseded by the Warm Homes: Local Grant delivery model
• Home Upgrade Grant (HUG) — targeted at rural homes off the gas grid with low EPC ratings; administered by local authorities; applies to owner-occupiers
• SEAI (Ireland) — the equivalent body in the Republic of Ireland; separate schemes apply and are not covered here
• EPC rating — Energy Performance Certificate; key document for most schemes; properties must have an up-to-date EPC (within 10 years for most purposes; within 2 years for some schemes)

Quick Reference Table

Detailed Guidance

Boiler Upgrade Scheme (BUS)

The Boiler Upgrade Scheme replaced the Renewable Heat Incentive (RHI) when that scheme closed in March 2022. Where RHI paid a per-unit subsidy to the homeowner over 7 years based on heat generated, BUS is a straightforward capital grant paid upfront to the MCS installer.

What is covered:

• Air source heat pumps (ASHP): £7,500
• Ground source heat pumps (GSHP): £7,500
• Biomass boilers: £5,000

Who can apply:

• The MCS-certified installer applies on behalf of the customer
• The property must be in England, Scotland, or Wales
• The heating system must replace a fossil fuel heating system
• The property must not have a live application under any other government heat pump grant

Application process:

1. Installer registers with Ofgem's BUS portal
2. Customer agrees to the project; installer checks property eligibility
3. Installation is completed to MCS standards
4. Installer applies for the grant via Ofgem within 3 months of installation
5. Ofgem issues a voucher; installer deducts the grant from the customer's invoice or is reimbursed directly

MCS certification requirements: To install heat pumps under BUS, the installer must hold MCS certification for the relevant technology (MCS 007 for heat pumps). MCS certification requires the company to have qualified engineers (BPEC, City & Guilds or equivalent heat pump training), quality management procedures, and third-party audited installations.

Practical points for tradespeople:

• The BUS grant significantly improves the economics of heat pump installation for customers, reducing the effective cost of an ASHP installation from ~£12,000–£15,000 to ~£5,000–£8,000
• BUS cannot be combined with ECO4 funding on the same measure
• Biomass boilers must be pellet-burning (not log-burning) for the £5,000 grant; other biomass types (gasifiers, chip) are not currently eligible

ECO4 (Energy Company Obligation, Phase 4)

ECO4 (2022–2026) is the fourth phase of the Energy Company Obligation, requiring the UK's largest energy suppliers (British Gas, Octopus, E.ON, EDF, and others) to fund energy efficiency improvements in fuel-poor homes. The cost is passed on to all energy bill payers.

Status as of August 2026: ECO4 closed to new applications in March 2026. Households already in the pipeline can still have work completed, and the scheme runs off entirely on 31 December 2026. For new referrals, direct clients toward the Warm Homes: Local Grant (see below) rather than ECO4.

ECO4 priorities:

1. Wall insulation — external wall insulation (EWI), cavity wall insulation (CWI), internal wall insulation (IWI)
2. Loft insulation
3. Under-floor insulation
4. First-time central heating (replacing inefficient electric storage heaters or no central heating)
5. Low-carbon heating (heat pumps in limited circumstances)

ECO4 eligibility: Properties must be EPC D, E, F, or G. Households must qualify via:

• Qualifying benefit recipient (Universal Credit, Housing Benefit, Child Tax Credit, Working Tax Credit, Pension Credit, Income Support, income-based JSA/ESA)
• ECO Flex — local authority referral scheme; LAs can refer households that don't qualify on benefit grounds but are nonetheless in fuel poverty or on low incomes

Installer requirements: Installers must be PAS 2030:2019 certified (for installation) and work under a TrustMark-registered scheme provider for ECO4. This is a significant compliance burden — PAS 2030 certification requires audited quality management, qualified staff, and third-party inspections. Trades new to ECO4 work typically start by partnering with an existing PAS 2030-certified lead installer.

Typical ECO4 funded works:

• EWI: solid-wall homes (pre-1940s typically); cost £8,000–£25,000 fully funded
• Cavity wall insulation: post-1940s cavity wall homes; cost £1,500–£3,000 fully funded
• Loft insulation: cost £300–£1,000 fully funded
• First-time central heating: air source heat pump or gas boiler; cost £5,000–£15,000 fully funded

Great British Insulation Scheme (GBIS) — closed 31 March 2026

GBIS (launched October 2023) operated alongside ECO4 to extend insulation funding to a broader range of properties. GBIS closed to new applicants in October 2025 and the scheme ended entirely on 31 March 2026 — over its lifetime it funded 139,100 insulation measures in 100,900 households. It has not been replaced with a like-for-like successor scheme; its insulation remit has been absorbed into the wider Warm Homes Plan (see below) rather than reissued as a standalone programme. Do not quote GBIS to new clients — direct insulation-only enquiries to the Warm Homes: Local Grant or a self-funded/0%-VAT route instead.

Key differences from ECO4 (for historical reference):

• GBIS covered EPC D properties as well as E, F, G — capturing better-performing homes that still benefited from improved insulation
• Two eligibility routes:
  • Group A (means-tested): similar to ECO4 benefit-recipient criteria
  • Group B (non-means-tested): EPC D or below; no income check; includes council tax bands A–D in England
• GBIS was limited to a single measure per property (not a whole-house package like ECO4)
• Typical GBIS measure: loft insulation (primary focus); cavity wall insulation; some solid wall insulation

GBIS installer requirements mirrored ECO4 — PAS 2030:2019 and TrustMark registration were required.

Warm Homes Plan (published 21 January 2026)

The Warm Homes Plan is the government's consolidated successor programme, published as a full policy document on 21 January 2026 with just under £15 billion in capital investment — described as the largest energy efficiency programme in British history, aiming to upgrade up to 5 million English homes and lift up to 1 million families out of fuel poverty.

Two main components for domestic retrofit:

• Warm Homes: Local Grant — up to £15,000 per household, delivered through participating local authorities, running to March 2028. Eligibility: household income ≤£36,000, or a qualifying benefit, or an eligible postcode; property privately owned with EPC D–G. Covers insulation, air source heat pumps, solar panels, and smart heating controls. This is now the primary route for low-income insulation and heating-upgrade work, replacing the role GBIS and (from 2027) ECO4 played
• Warm Homes Fund — low or zero-interest loans for households that don't qualify for a grant. An initial £600 million has been committed, with a wider consumer loan scheme (around £2 billion) announced; detailed terms, interest rates and eligible measures were still being finalised as of August 2026

The Boiler Upgrade Scheme continues to run alongside the Warm Homes Plan unchanged in its core £7,500/£5,000 grant structure (see above for the temporary off-gas-grid uplift).

Practical implication for tradespeople: for a low-income client asking about "the insulation grant" today, the correct answer is the Warm Homes: Local Grant via their local authority — not GBIS (closed) and, from early 2027, not ECO4 either. Installer accreditation requirements (PAS 2030/2035, TrustMark) are expected to carry over, but confirm current scheme-provider requirements before quoting, as delivery detail is still being finalised.

VAT 0% on Energy Efficiency Products

Since 1 April 2022, the installation of energy-saving materials (ESMs) in residential buildings attracts 0% VAT. This is a permanent change (not time-limited), applying to both the product and the installation labour when supplied together.

Qualifying products (selected):

• Insulation (cavity wall, loft, floor, solid wall — any type)
• Solar photovoltaic panels
• Solar water heating
• Wind turbines
• Heat pumps (air source, ground source, water source)
• Energy storage batteries (when installed alongside or connected to solar/wind)
• Heating controls and thermostatic radiator valves (when part of a qualifying installation)

What is NOT at 0% VAT:

• A heat pump installed without any connection to other ESMs (standalone heat pump on commercial building)
• Materials supplied without installation (supply-only is standard-rated at 20%)
• Boiler replacements (gas boilers are not ESMs)

For tradespeople, this means that heat pump and insulation installations on residential properties are invoiced at 0% VAT — a 20% saving on the job that should be passed to the customer (and often makes projects viable that would otherwise be marginal).

Salix Finance

Salix Finance provides interest-free government loans to public sector organisations for energy efficiency improvements. Schools, hospitals, local councils, and housing associations can borrow from Salix to fund:

• LED lighting upgrades
• Boiler replacements with efficient alternatives
• Insulation improvements
• Heat pumps and solar installations

Repayment comes from the resulting energy bill savings. For tradespeople working in public sector buildings, Salix-funded projects often provide a reliable pipeline of retrofit work without the eligibility uncertainties of household grant schemes.

Combining Schemes and the Fabric-First Principle

For domestic retrofit, the most cost-effective approach is the "fabric first" principle: improve the thermal performance of the building envelope (insulation, air sealing, glazing) before sizing and installing a heat pump. A poorly insulated home with a heat pump will have poor heat pump performance (low coefficient of performance), high running costs, and disappointed clients.

Recommended sequence:

1. Install loft insulation (cheapest, highest return)
2. Cavity wall or solid wall insulation
3. Double or triple glazing upgrade if still single-glazed
4. Then install a correctly sized heat pump

ECO4 enforces this through its fabric-first rules — a heat pump can only be funded under ECO4 where the fabric measures have already been carried out or are being carried out simultaneously (this remains in force for the remainder of ECO4's run to 31 December 2026, and is expected to carry over into the Warm Homes: Local Grant delivery model). Under BUS, there is no fabric-first requirement, but the MCS installer is obliged to advise the customer appropriately.

Frequently Asked Questions

Can a landlord access ECO4 funding for a rental property?

ECO4 is closed to new applications (since March 2026) but existing approved installations are still completing through to the scheme's end on 31 December 2026. Where it was accessible, private landlords could access ECO4 funding for rental properties if the tenant met the eligibility criteria (benefit recipient or LA referral via ECO Flex), with landlord consent required and, in some contracts, a landlord contribution toward cost. For new landlord enquiries now, direct them to the Warm Homes: Local Grant or the forthcoming Warm Homes Fund loan route instead.

Does BUS require the property to have a specific EPC rating?

BUS does not have an EPC rating requirement for the property itself, but all properties must have a current EPC. The installer must carry out a heat loss calculation (to PAS 2035 standards) and size the heat pump correctly. Properties with very high heat losses may require additional insulation before a heat pump can be properly sized.

What is TrustMark, and why does it matter for ECO4?

TrustMark is a government-endorsed quality scheme for tradespeople working in and around homes. For ECO4 (while it runs) and Warm Homes: Local Grant work, the government mandates that all funded work is carried out by TrustMark-registered businesses. TrustMark provides a quality-assurance framework and a complaints resolution process. Trades not registered with TrustMark cannot legally carry out publicly-funded retrofit work under these schemes.

My client wants a heat pump but doesn't qualify for BUS — what are the options?

Without BUS, the customer pays the full installation cost. Low-income households may qualify for the Warm Homes: Local Grant (up to £15,000, via the local authority) or, once details are finalised, a Warm Homes Fund loan. Some local authorities also run their own grant schemes (Home Upgrade Grant, Local Energy Improvement Scheme) — check with the local council. The customer may be eligible for 0% VAT on the installation (automatic, no application needed). Some energy suppliers offer their own heat pump incentives — check with the relevant supplier.

Has the Green Homes Grant been extended?

No — the Green Homes Grant Voucher Scheme ended in February 2022. Its replacements, BUS (low-carbon heating) and GBIS (insulation), have themselves moved on: BUS is still active, but GBIS closed permanently on 31 March 2026. The current general home-improvement grant route for low-income households is the Warm Homes: Local Grant under the Warm Homes Plan.

Regulations & Standards

• The Renewable Heat Incentive Regulations 2011 (SI 2011/2860, as amended) — historical RHI scheme regulations

• MCS Standards MCS 007 — heat pump installer certification standard

• PAS 2030:2019 — publicly available specification for the installation of energy efficiency measures in existing buildings

• PAS 2035:2019 — retrofitting dwellings for improved energy efficiency; specification and guidance (the overarching retrofit assessment standard)

• VAT Act 1994 Schedule 7A — reduced and zero-rated supplies; energy saving materials

• The Energy Company Obligation 4 (ECO4) Order 2022 — ECO4 scheme legislation (scheme ends 31 December 2026)

• Warm Homes Plan (published 21 January 2026) — consolidated government policy document underpinning the Warm Homes: Local Grant and Warm Homes Fund

• Ofgem: Boiler Upgrade Scheme — BUS guidance for installers and homeowners

• GOV.UK: Warm Homes Plan — official Warm Homes Plan policy document (published 21 January 2026)

• GOV.UK: Great British Insulation Scheme statistics — confirms scheme closure and final delivery figures

• MCS Certification — MCS certification requirements and installer search

• TrustMark — TrustMark registration and ECO scheme access

• HMRC: VAT on Energy Saving Materials — 0% VAT guidance for qualifying installations

• part a structure — Building Regs compliance for structural elements of retrofit work

• planning vs building regs — regulatory framework for renovation and retrofit projects