Boiler Upgrade Scheme (BUS) Annual Report - 2022-23

This is the first Boiler Upgrade Scheme (BUS) annual report. As part of our statutory responsibilities administering the BUS, we have produced this report to provide an update on activity since scheme launch on 23 May 2022 to 31 March 2023 (Scheme Year 1).

The Executive Summary is provided here, and the full report is published at the bottom of this page.

Executive Summary

The Boiler Upgrade Scheme (BUS) launched on 23 May 2022 to support the decarbonisation of heat in buildings. It provides upfront capital grants towards the cost of installing approved heat pumps and biomass boilers in homes and small non-domestic buildings in England and Wales. Decarbonising the way we heat our homes and businesses is essential to reach net zero carbon emissions and the BUS has an important role to play in achieving this.

As scheme administrator, we ensure the scheme is operated efficiently, including managing applications made by installers, issuing vouchers, making payments, and reporting on scheme activity. Additionally, our audit and compliance programme monitors compliance with the scheme rules, making sure that grants are only paid to those eligible to receive them.

Installers are required to submit an initial voucher application (stage 1) where we check the pre-installation eligibility criteria. If the voucher application is successful, we issue the applicant with a voucher.

Following commissioning of an installation the installer can submit a voucher redemption application (stage 2). Once we have established that the remaining eligibility requirements have been met, the grant payment is made.

During the first year of the scheme to 31 March 2023, we received a total of 15,768 stage 1 applications. After completing our eligibility checks we issued 11,998 vouchers worth almost £69.1 million. We rejected a further 1,362 applications that failed our eligibility checks, and 161 applications were withdrawn.

We subsequently received 10,320 stage 2 applications from which 9,983 grant payments worth almost £50.2 million have been made. As a result of our further eligibility checks we rejected 58 of the stage 2 applications.

96.3% of grants paid were for air source heat pumps and 99.6% of installations were installed in domestic properties.

When looking at the heating systems being replaced, gas boilers made up the largest proportion at 46.3%. Oil boilers were the second most common technology being replaced making up 22.9% of the total. Altogether, replaced fossil fuelled heating systems account for 74.1% of grants paid. There were also an additional 15.9% of installations where no heating system was being replaced – all of which were in eligible self-build properties.

Over the first year 1,055 installers created a BUS installer account. Of these, 915 or 86.7% have submitted applications. Of the 140 that have yet to submit an application (as at the time the data was extracted), 35 are installers that created their accounts towards the end of the Scheme Year, between January and March 2023.

It is worth noting that the top 30 installers were responsible for 6,001 (38.1%) of applications. Conversely, there were 148 installers with a single application each.

Audit

We operate a robust audit programme to help ensure that grants are only paid to applicants eligible to receive them, non-compliances are identified, and the scheme is operating in line with the regulations and scheme guidance. Doing so helps to ensure scheme funds are being spent effectively, providing value for money for the public.

We undertake both statistical and targeted audits. Statistical audits are randomly selected to provide a representative view of the scheme population. This provides us with a reliable measure of the level and types of non-compliance within the population and allows us to monitor whether non-compliance remains within risk appetite. Targeted audits focus on installations we have identified as having an increased risk of non-compliance.

We conducted 405 statistical audits during Scheme Year 1. For audits closed to date, we assessed that 95.6% of those audited were complying with the scheme rules. Note that remedial action may bring more of these into compliance. The most common reasons for non-compliance identified were:

‘No evidence of plant on site or plant ineligible for the scheme’
‘Plant cannot meet eligible property space and water heating needs‘
‘Incorrect EPC provided’

These collectively accounted for over 80% of all non-compliance identified through the statistical programme.

Additionally, Scheme Year 1 saw 470 installations selected for targeted audit. As these audits target known risk areas, we expect compliance in this group to be lower. Overall we assessed that 93.3% of those audited were complying with the scheme rules.

It should be noted that the compliance rate can only be confirmed following the completion of a compliance investigation and some investigations relating to year 1 remain open at the time of writing.

Compliance

When we suspect an applicant has not complied with the scheme rules, for instance after completion of an audit, we may open a compliance investigation. If our investigation subsequently confirms a non-compliance affecting eligibility has occurred, in most cases we take compliance action by rejecting the ineligible application or revoking the voucher.

We closed 153 compliance investigations during the year of which 53 were found to be non-compliant. The most common non-compliance reason effecting eligibility was ‘Existing system was not fossil fuel or electric’, accounting for 50.9% of the total. Where this issue has been identified the installer has been unable to provide evidence that the BUS installation will be replacing an existing fossil fuel or electric heat source.

In total, the compliance actions we took in Year 1 resulted in almost £270,000 of public funds being protected or recoverable - all of which (where applicable) has now been recovered.

Please note: For those wishing to look at the data used in the report in more detail, a spreadsheet with this information is published below.