Government Incentives for Biomass Heating: What You Need to Know in 2025

May 13 2025 , 10 min reading time

Switching to biomass heating can be a great way to reduce your energy bills, cut carbon emissions, and increase your home’s energy independence. However, the upfront cost can be high. Thankfully, the UK government offers various grants and subsidies to encourage homeowners to install biomass boilers. In this guide, we’ll break down the latest government incentives for biomass heating in 2025, eligibility requirements, and how you can apply.

In this guide, we’ll break down the latest government incentives for biomass heating in 2025, eligibility requirements, and how you can apply.

1. Why Are There Incentives for Biomass Heating?

The UK is phasing out fossil fuel heating and pushing towards low-carbon alternatives like biomass boilers and heat pumps. Biomass boilers are supported because they:
✔ Reduce carbon emissions compared to oil and LPG heating
✔ Use renewable fuel sources (wood pellets, logs, or chips)
✔ Lower heating costs in rural homes not connected to the gas grid

To help more households switch to biomass, the government provides financial support through various schemes.

2. Key Government Incentives for Biomass Boilers in 2025

🔹 Boiler Upgrade Scheme (BUS)

The Boiler Upgrade Scheme (BUS) provides upfront grants to help homeowners install low-carbon heating, including biomass boilers.

💰 What’s available?

£5,000 grant for biomass boiler installations.
£7,500 grant for air and ground source heat pumps (alternative options).

📍 Who is eligible?
✔ Homes in England and Wales (Scotland has separate support).
✔ Off-grid properties only – you cannot get this grant if your home is connected to the gas grid.
✔ Your home must have a valid Energy Performance Certificate (EPC).
✔ Your installer must be MCS-certified (Microgeneration Certification Scheme).

🚀 How to apply?

Find an MCS-certified installer (they will handle the application).
Your installer will apply for the BUS grant on your behalf.
The grant amount is deducted from the installation cost.

📅 Key dates:

Applications must be made before March 2026.
The scheme has an annual budget of £295 million.

👉 More details: Boiler Upgrade Scheme – GOV.UK

🔹 0% VAT on Biomass Boiler Installations

Since April 2022, the government has removed VAT on the installation of biomass boilers and other renewable heating systems.

💰 What does this mean?

You pay no VAT on the cost of installation.
Applies to all domestic properties until March 2027.

👉 More details: HMRC VAT Guidance

🔹 Renewable Heat Incentive (RHI) – Legacy Support

Although the Domestic Renewable Heat Incentive (RHI) scheme closed in 2022, existing participants are still receiving quarterly payments for up to 7 years. If you installed a biomass boiler before March 2022, you may still be eligible for payments.

👉 Check your eligibility: RHI Scheme – GOV.UK

3. How Much Can You Save?

Cost Factor	Without Incentives	With BUS Grant
Biomass Boiler Cost	£10,000 – £15,000	£5,000 – £10,000
Installation (flue, storage)	£2,000 – £5,000	£2,000 – £5,000
VAT (0% incentive)	£1,200 – £2,000 (saved)	£1,200 – £2,000 (saved)

💡 Total potential savings: £6,200 – £7,000

👉 Annual fuel savings: Replacing oil or LPG could save £300–£700 per year.

4. Eligibility Requirements for Biomass Grants

To qualify for government grants, you need to meet these conditions:

✅ You must be off the gas grid – only homes in rural areas qualify.
✅ The biomass boiler must be MCS-certified – ensuring it meets high efficiency and emissions standards.
✅ Your home must have an Energy Performance Certificate (EPC) – proving it meets insulation requirements.
✅ A certified installer must complete the work – DIY installations do not qualify.

🔎 How to check if your home qualifies?

Use the ONS Rural Urban Classification tool to confirm your property is rural.
Search for an MCS-certified installer on the MCS website.
Get an updated EPC certificate if yours is older than 10 years.

5. How to Apply for a Biomass Grant?

Step 1: Find an MCS-Certified Installer

Installers must be MCS-certified to qualify for grants.
Search for a local certified installer like TISIGO on MCS Certified.

Step 2: Get a Quote and Eligibility Check

The installer will assess your home and confirm if you qualify.
They will provide a quote for installation costs.

Step 3: Installer Applies for the Grant

The installer will handle the Boiler Upgrade Scheme (BUS) application on your behalf.
Once approved, the grant is deducted from your final bill.

Step 4: Installation and Payment

The installer completes the biomass boiler installation.
You pay the remaining balance after the grant is applied.

6. Alternative Funding Options

If you don’t qualify for the Boiler Upgrade Scheme, you may still get financial help through:

🔹 Green Home Finance Products – Some banks offer green mortgages or home improvement loans for renewable energy installations.

🔹 Energy Company Obligation (ECO4) – Provides grants for low-income households.

7. Is a Biomass Boiler Right for You?

A biomass boiler is a great investment if:
✔ You live off the gas grid.
✔ You have space for fuel storage (logs, pellets, or chips).
✔ You want to reduce heating costs and carbon emissions.
✔ You don’t mind regular maintenance (emptying ash, cleaning).

But it might not be the best choice if:
❌ You have limited space for fuel storage.
❌ You prefer a hands-off heating system.
❌ You struggle to get fuel deliveries in your area.

8. Final Thoughts: Should You Apply for a Biomass Grant?

If you’re considering switching to biomass heating, 2025 is a great time to apply for government incentives. With the Boiler Upgrade Scheme (BUS), 0% VAT, and potential savings on fuel, a biomass boiler can be a cost-effective and eco-friendly solution for your home.

💡 Next Steps:
🔹 Check your eligibility and get an EPC certificate.
🔹 Find an MCS-certified installer to handle the application.
🔹 Apply for a grant and start saving on your heating costs.

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