Switching from oil or LPG to a heat pump: what changes at home

What to know first

This summary covers the grant, heating-system changes and practical checks involved in replacing oil or LPG heating.

Replacing an oil or liquefied petroleum gas (LPG) boiler with an air source heat pump can remove the need to buy delivered fossil fuel. It is not a simple boiler-for-boiler exchange.

The outcome depends on heat loss, radiators, pipes, hot water, electrical supply, outdoor space and the installer’s contract.

The £9,000 grant has a narrow window

The Boiler Upgrade Scheme is open in England and Wales. Its standard grant is £7,500 for an air-to-water or ground source heat pump.

A temporary £9,000 rate applies where an eligible off-gas property replaces oil or LPG with either system. The application must be properly made from 21 July 2026 to 31 March 2027. Air-to-air heat pumps receive £2,500 and do not qualify for the uplift.

For this uplift, “off-gas” is tighter than “rural”. The property must not be heated by mains gas, have a recorded gas meter point, be on a heat network or be a new-build.

A capped or clamped gas meter still counts as mains gas. Self-builds do not qualify for the uplift, although some may meet the standard-grant rules.

A “properly made” application means Ofgem has the required information and the owner has completed consent and identity checks. The installer applies and deducts the grant from the quote.

Ofgem confirms eligibility after submission. Retrospective applications can carry extra risk and do not guarantee payment.

An installer contract is separate from Ofgem’s scheme process. Ask what happens to a deposit if a voucher is refused, expires or the installation does not proceed.

Which heat pump would replace the boiler?

For a home with water-filled radiators, the closest replacement is normally an air-to-water heat pump. It transfers heat from outside air to water for central heating and a hot-water cylinder.

An air-to-air system blows warm air into rooms and does not simply take over wet radiators. A ground source system can qualify for the uplift, but needs suitable land, trenches or boreholes and usually costs more to install.

What changes might be needed indoors?

A heat pump normally circulates water for longer at a lower temperature than an oil or LPG boiler. “Flow temperature” is the temperature of water sent to the radiators, which need enough surface area to heat each room.

This table is a starting point, not a property assessment.

MCS rules require a heat-load calculation and a whole-home unit selected to meet the calculated load at the relevant flow and outdoor temperatures. Some existing radiators may be large enough; others may need upgrading.

A standard air source heat pump does not make hot water instantly like a combi boiler. Energy Saving Trust says a cylinder can often fit in a cupboard with about an 80cm by 80cm floor area, although sizing depends on demand.

Expert insight

“The useful question is not whether a home is old or rural, but whether a documented design can heat every room at realistic water temperatures.”

Giles Crosse

Energy Editor

Experienced editor, journalist and communications consultant specialising in consumer energy and low carbon technologies.

• Editor and campaign author for Shell, EDF Energy and Good Energy.
• Consultant to the United Nations and contributor to the World Economic Forum.
• Journalist for Reuters, the BBC, The Economist and The Guardian.

More about Giles Crosse

What happens to the oil or LPG tank?

Do not assume tank removal is included in the heat-pump price or grant. Ask for a separate line in the quote and agree the timing.

A Boiler Upgrade Scheme-funded system must not retain a fossil-fuel appliance to provide additional space heating.

An oil tank may contain fuel, sludge and vapour. In England, contractors using the Environment Agency’s low-risk position must prevent residues escaping, store tanks securely and avoid pollution.

Underground or leaking tanks may need specialist investigation and removal work.

Good to know

A bulk LPG tank is often supplier-owned. Check the contract and contact the supplier before anybody disconnects, moves or removes it.

Will a rural electricity supply cope?

A rural address does not automatically require a network upgrade. The installer should check the electricity supply, main fuse, consumer unit and other large electrical loads.

Every heat pump must be registered with the distribution network operator, or DNO. This is the company responsible for the local electricity network.

The installer may be able to connect the heat pump and notify the DNO afterwards. In other cases, permission is needed before connection.

Ask who handles the DNO process, whether electrical work is expected, who pays for it and whether approval is a condition of the contract.

Planning and siting still matter

Many domestic installations are permitted development, meaning a separate planning application may not be needed, but only if all relevant conditions are met.

England requires compliance with MCS 020a and applies limits involving unit size, the number of units, roof positions and protected buildings. Wales updated its permitted-development rules on 1 June 2026 and also refers to MCS 020(a).

Listed buildings, conservation areas, flats, leases and difficult noise or boundary positions justify an early planning or consent check.

What could it cost, and will bills fall?

Energy Saving Trust’s estimate, updated 16 July 2026, puts a typical air source heat-pump installation at about £12,000. This is not a fixed price. Property size, heat-pump capacity and radiator work all affect quotations.

The headline figure may exclude tank work, extensive pipe replacement, electrical upgrades, a hot-water cylinder, permissions or making good.

Compare at least three MCS-certified quotes based on the same scope. Each Boiler Upgrade Scheme quote should show the total before the grant, the grant deduction and the balance payable.

Qualifying residential heat-pump installations are temporarily zero-rated for VAT until 31 March 2027. Separate work can be treated differently, so check the itemised VAT treatment rather than assuming every part of the project is zero-rated.

A heat pump can deliver around three to four units of heat for each unit of electricity it uses. Annual performance and cost still depend on design, weather, controls, radiator sizing, the electricity tariff and the old system being replaced.

Lower bills cannot be assumed.

The Competition and Markets Authority reported that a typical 500-litre heating-oil order cost about £200 more in March 2026 than in February. This illustrates volatility, but it does not predict future prices or prove that a heat pump will cost less to run.

Expert insight

“Compare useful heat, not just fuel unit prices. Request projected seasonal performance and a bill-impact calculation showing the assumed electricity tariff.”

Giles Crosse

Energy Editor

Experienced editor, journalist and communications consultant specialising in consumer energy and low carbon technologies.

• Editor and campaign author for Shell, EDF Energy and Good Energy.
• Consultant to the United Nations and contributor to the World Economic Forum.
• Journalist for Reuters, the BBC, The Economist and The Guardian.

More about Giles Crosse

How the switch usually happens

1. Define the complete job. State whether quotations must include radiators, the cylinder, electrical work, tank work, permissions and making good.

2. Obtain surveys and comparable quotations. Use MCS-certified installers and request the room-by-room heat-loss calculation, proposed flow temperature and expected seasonal performance.

3. Apply for funding. The installer submits the Boiler Upgrade Scheme application. The property owner supplies the required evidence, consent and identity verification.

4. Secure any approvals. The installer or owner obtains DNO, planning, freeholder or listed-building approval where required.

5. Install and commission the system. Agree how the home will be heated during the work. Avoid removing the old system before the changeover arrangements are secure.

6. Complete the handover. Collect controls training, warranties, MCS documents and relevant building paperwork. Complete the agreed tank arrangements lawfully.

Air-to-water Boiler Upgrade Scheme vouchers normally last three months. Delays beyond the voucher period may require a new application, which does not guarantee the same outcome.

What support applies elsewhere in the UK?

The temporary £9,000 uplift applies only in England and Wales.

In Scotland, eligible owner-occupiers can seek a heat-pump grant of up to £7,500 and an optional interest-free loan of up to £7,500. A £1,500 rural uplift may apply. Funding depends on eligibility and availability, and applicants need a written funding offer before work starts.

Northern Ireland does not use the Boiler Upgrade Scheme. Households can check NI Energy Advice and targeted programmes such as Affordable Warmth, but heat-pump funding should not be assumed.

When is professional input needed?

A property-specific decision normally needs an MCS-certified installer and a competent electrician.

Depending on the building and project, input may also be needed from the distribution network operator, planning authority, conservation officer, freeholder, LPG supplier, oil-tank contractor or an independent energy assessor.

Key takeaways

• The temporary £9,000 rate has strict property, technology and application-date conditions.

• Air-to-water is normally the relevant replacement for a wet radiator system.

• Radiator decisions should follow a room-by-room heat-loss calculation.

• Hot water, pipes, electricity and tank work can add to the headline cost.

• Oil and LPG prices can be volatile, but lower bills are not guaranteed.

• Compare complete designs and contract terms, not headline prices alone.

Frequently asked questions