The Boiler Upgrade Scheme moved to V5 on 28 April 2026. The voucher mechanism is unchanged - what's new is the mandatory upfront discount on the customer's quote and invoice. Here's how that changes installer cash flow, T&Cs, and template configuration.
Jamie Duncan
The Boiler Upgrade Scheme moved to V5 on 28 April 2026. If you've been installing heat pumps under V4, the voucher mechanism itself is unchanged - you still apply, get issued, redeem via the Ofgem portal. What V5 layers on top is the bit installers can't ignore: a mandatory upfront discount on the customer's quote and invoice, and a regulator that's now allowed to audit whether you actually applied it (V5 Installer Guidance, para 2.03).
This post is the operational read on that single change - what it does to quoting, what it does to your working capital, and what the audit trail needs to look like. If you want the full BUS commissioning playbook, that lives in Heat pump commissioning under BUS V5. This one is narrower and sharper: the mechanic, the cash flow, the contract clause.
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The substantive V5 change is short enough to quote in full. Under para 2.03, where a property owner is eligible and an installer is using the grant, the installer must:
Two things stand out. First, this is a quote requirement as well as an invoice requirement - the discount maths has to be visible from the moment the customer sees the price. Second, "not request or accept the discounted amount" is the language that closes off the old V4 workaround of charging full price upfront and refunding the grant on redemption. Under V5 you can't do that. The customer's contractual obligation to you is the net figure, full stop.
Audit-wise, V5 para 8.09 brings Ofgem's grant-deduction compliance checks into scope. The realistic shape of an audit is: Ofgem asks for a sample of quotes and invoices, looks at whether the grant maths is on the document, and looks at the payment record against the customer to check the discounted amount wasn't collected. If your quoting platform produces documents that don't itemise the grant, that's where the finding gets written.
V5 doesn't change the voucher mechanism - it changes what the customer sees and what the regulator is allowed to look at. Most of the operational lift is in your templates and your contract, not your install workflow.
SI 2026/390 amends Regulation 2 to define an installer as a person certified by the Microgeneration Certification Scheme specifically. The previous "or equivalent scheme" language is gone. From 28 April 2026, non-MCS installers can't apply for or redeem a BUS grant regardless of how good the work is.
In practice this is a small population of installers, but if you're sub-contracting any heat pump work, the sub has to be MCS in their own right for the BUS chain to work. The MCS umbrella you sit under is what unlocks the grant - the MID record under V5 has to match the installer who's certified, and that's now hard-coded into the regulation.
The 2026/27 BUS budget was increased to £400 million (up from £295m), approved on 1 April 2026. That's headroom for roughly 53,000 grants at £7,500 - more than the scheme has ever paid out in a year, and well above the running redemption rate. Voucher availability stops being a worry in the planning horizon you can actually see.
The £9,000 grant for oil and LPG households is a separate announcement, made on 21 April 2026, targeted at the ~1.7 million off-grid homes still on heating oil or LPG. The announcement frames it as supporting the energy bills agenda. What it doesn't do is commit to a commencement date. Industry reporting points at July 2026, but Ofgem has not confirmed when applications will be assessed at the £9,000 level, and the V5 guidance text as published still references the £7,500 figure.
Practical implication for the pipeline: if you're quoting an oil or LPG household today, quote on £7,500. Flag the uplift as a "subject to government commencement" tailwind in conversation. If you want to bank the £9,000 yourself by timing the voucher application, the rules let you apply up to 120 days after commissioning - but you're carrying voucher-timing risk on your own balance sheet, and Ofgem has not signalled when the higher level switches on.
Don't write 'now £9,000' on quotes for oil/LPG until Ofgem confirms
The £9,000 figure is announced, not commenced. Putting it on a quote today is a marketing accuracy problem and a customer expectation problem. Wait for Ofgem to publish the V5 guidance update reflecting the £9,000 tier and the date applications will be assessed at the new level. Until then, £7,500 is the only figure that's safe on a quote.
The cash-flow shape under V5 looks like this:
The gap between step 4 (customer pays balance) and step 7 (Ofgem pays grant) is yours to fund. On a 20-installs-a-month operation at £7,500 per voucher, that's £150,000 of working capital tied up at any one time if redemption sits in the 2-3 weeks post-install range. Compress that to the 48 hours post-commissioning that a tight commissioning workflow can deliver, and the working capital exposure drops by roughly two thirds.
This isn't new arithmetic for any installer who quoted net under V4 - that was always the practical norm to make the price visible to the customer. What V5 does is make it the only legal option. The V4 alternative - quoting full price and letting the customer absorb the redemption gap - is gone. So the install-to-redemption time is now an operational metric for every BUS installer, not just the ones who already quoted net.
| Monthly installs | Working capital tied up at 2-3 wk redemption | At 48-hour redemption | The difference, monthly |
|---|---|---|---|
| 5 | £37,500 | £12,500 | £25,000 freed |
| 10 | £75,000 | £25,000 | £50,000 freed |
| 15 | £112,500 | £37,500 | £75,000 freed |
| 20 | £150,000 | £50,000 | £100,000 freed |
| 25 | £187,500 | £62,500 | £125,000 freed |
The working-capital lift from getting commissioning + MID + redemption submission tight is the single biggest operational return in the BUS business model. Under V5 it's not optional - the redemption gap is yours by regulation - so the case for compressing it is no longer "we'd prefer to", it's "we have no other lever".
Under V4, if a voucher was rejected or revoked after install (property turned out ineligible, declaration false, audit finding), you had a workaround: collect full price upfront and refund the grant on redemption. If the grant fell over, the customer had already paid you. Under V5 that route is closed - the customer's contractual obligation is the net figure.
That puts a contract clause front and centre. Your customer T&Cs need to spell out that where a voucher is rejected, revoked, or not paid for reasons on the customer's side (false declaration, ineligibility they didn't disclose, withdrawing consent for Ofgem to process the application), the customer is liable for the full grant amount on top of what they've already paid you. This is the single biggest financial risk V5 introduces, and it lives in your contract, not your software.
The clause is straightforward to draft but it has to be explicit. Standard "scope of work + payment terms" wording doesn't catch it. If your T&Cs were written before V5, they probably don't catch it either - V4 didn't need the language because you could collect upfront and refund. Have your conveyancer or business solicitor add a specific paragraph; the cost of the legal review is small compared to a single voucher rejection on a £7,500 install.
What to brief your solicitor
The clause needs to do four things:
This is a one-time legal task that protects every BUS install you do from 28 April 2026 onwards.
V5 is specific about the maths being on the document. The pattern that holds up to a para 8.09 audit:
Quote (pre-install):
Invoice (post-install):
Both documents need to be reproducible. If Ofgem asks for the V5 audit pack on a sample install in 2027, the answer needs to be "here are the system-generated quote and invoice from that customer's record, both showing the V5 maths". If the documents only exist in someone's email outbox, that's a finding waiting to happen.
The simplest way to land this is to set up the quote and invoice templates once, route them through one document-generation pipeline, and feed the grant amount in as a structured value rather than a free-text field. That gets you template-level consistency, and it gets you a verifiable record per install.
The voucher lifecycle is a sequence that's been valid since V1 - V5 just makes the steps more cash-flow-load-bearing. The stages worth carrying on the project record:
The portal interactions at steps 1, 2, 5, 6, and 7 are still manual - V5 doesn't change that, and there's no Payaca-to-Ofgem API integration. What having the stages on your project record does is give you visibility into where your live BUS jobs are stuck. If 5 jobs are stuck at "MID registered" with no submission for redemption, that's an admin priority on Monday morning. If 8 jobs are stuck at "voucher application submitted" with no Ofgem issue back, that's a different problem (probably documentation gaps in the applications) requiring a different fix.
Working with UK heat pump installers in onboarding this April and May, the BUS grant deduction question keeps coming up. McInnes Group, a new heat-pump install business currently moving through Payaca onboarding, has the shape that's most common: business scaling against the new V5 rules, needing the project pipeline and the commissioning forms to carry the BUS workflow alongside the MCS workflow. Eaasy Heat - a Growth-tier customer on Payaca since April - was on the same beat at their first onboarding session: MCS compliance and heat-pump commissioning forms in scope from the first conversation.
The thing that surfaces in those rooms isn't the regulatory complexity - installers already know what V5 says. It's where the discount lands on the customer-facing document, what happens to the cash flow if MID slips, and how the contract clause closes off the V4 workaround. The installers running this tightly aren't doing anything regulators didn't already write down. They've made the V5 maths a property of the template rather than a property of the admin team, and they've made MID registration the trigger for redemption submission rather than a separate task.
If you're a UK heat pump installer running 15+ jobs a month and haven't worked through V5 yet, the operational fix is shorter than you'd expect. Three things this month:
None of this is V5-specific software. It's contract, template, and workflow discipline applied to a regulation that now has audit teeth. The full commissioning playbook covering MIS 3005 detail, the MCS Installation Database, DNO notification under the ENA HP/EV form, Part L/F and homeowner handover lives in Heat pump commissioning under BUS V5: a 2026 compliance playbook - and the operational read on the broader market sits in The Warm Homes Plan: what installers need to know.
Sources: SI 2026/390; BUS Installer Guidance V5 draft (Ofgem, 27 March 2026); Summary of Updates in the BUS Installer Guidance V5; BUS budget increase, 1 April 2026 approval; £9,000 oil/LPG uplift announcement, 21 April 2026.
Related reading: Heat pump commissioning under BUS V5: a 2026 compliance playbook | Heat pump installer economics: what actually drives margin | The Warm Homes Plan: what installers need to know | Heat pump installer solutions
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