The funding comes as part of a wider £6 billion that has been earmarked by government to help cut energy use and bills for homes, business, and industry.

In addition to the extra £1.5 billion for the BUS, the government has outlined the following schemes to receive funding:

  • a new £400 million energy efficiency grant, launching in 2025, for households in England to make changes such as bigger radiators or better insulation
  • a new local authority retrofit scheme, allocated £500 million to support up to 60,000 low-income and cold homes, including those off the gas grid, with measures such as insulation
  • the Social Housing Decarbonisation Fund, allocated £1.25 billion to support up to 140,000 social homes to be insulated or retrofitted, improving energy performance and lowering bills
  • the Green Heat Network Fund, allocated £485 million to help up to 60,000 homes and buildings access affordable, low carbon heating through new heat networks, reducing our use of fossil fuels and providing more reliable heating
  • the Heat Network Efficiency Scheme, allocated £45 million to improve around 100 existing heat networks, in a move that will reduce bills and improve reliability
  • the Industrial Energy Transformation Fund, allocated £225 million, will continue to help businesses transition to a low-carbon future.

Energy Secretary Claire Coutinho said: "Cutting energy bills is my top priority. Today’s funding will help those who are most in need and keep around a million more families warm during winter. 

"Everyone deserves to live in a warm, energy efficient home. We have already made excellent progress with nearly 50% of properties in England now having an Energy Performance Certificate of C – up from just 14% in 2010.

"This funding will help us go even further and improve 200,000 cold, low income and social homes."

Ian Rippin, CEO of MCS, the standards organisation for heat pump installations, said: “We are enormously pleased to see the government pledge an additional £1.5 billion of funding to the Boiler Upgrade Scheme.

“The increase of the grant amount to £7,500 back in October made heat pumps affordable for more people. However, this came at the cost of reducing the number of overall vouchers the government would be able to provide. Today’s announcement means that more homeowners across England and Wales can install low carbon heating with help from the Boiler Upgrade Scheme.

“The increase equates to an additional 200,000 vouchers, which will go a long way to supporting government ambitions to install 600,000 heat pumps a year by 2028.

“With the Future Homes Standard consultation published last week showing clear signals from the government that heat pumps are the only feasible choice for UK consumers to decarbonise their homes, and today’s doubling down on the Boiler Upgrade Scheme, there has never been a better time to invest in your low-carbon future by installing a heat pump.”