The Warm Homes Plan (WHP) was designed to support the upgrading of 5 million homes by 2030 with both clean heating and energy efficiency measures. As part of this, the plan included £5 billion of financial investment for home upgrades, benefiting low-income consumers.
We also saw significant measures to accelerate progress towards creating warmer, more efficient homes and buildings across the UK, including a commitment to stronger consumer protections, and higher energy efficiency standards for landlords alongside Energy Performance Certificate (EPC) reform.
Support for low-income households
A key part of our mission at the SEA is to ensure that no one is left behind in the energy transition, and that a transition to a more sustainable future places equal importance on lifting people out of fuel poverty.
Over £4.4 billion of WHP funding will be delivered through the Warm Homes: Social Housing Fund and Warm Homes: Local Grant programmes with a focus on area-based delivery. The programmes will upgrade the UK’s social housing stock to EPC band C, through measures such as insulation and low carbon heating systems.
Other low-income households will receive support for upgrading their homes through an additional £600 million, while all UK homeowners will still be eligible for a £7,500 grant from the Boiler Upgrade Scheme (BUS). The BUS has also had its funding increased to £2.7 billion to 2030.
Last year, we were also delighted to see the Government make positive steps towards acknowledging the importance of alternative technologies within a future energy mix, considering the UK’s diverse building stock. This manifested in the form of a new call for evidence aimed at understanding the role of alternative clean heating solutions within properties not suitable for a heat pump or heat network connection.
Additionally, the BUS will soon be expanded to include air-to-air heat pumps and heat batteries, providing improved consumer choice, cheaper solutions for certain households, and technologies that will help to reduce energy bills through demand-side flexibility and storage. We hope that, with the aforementioned call for evidence, this will be expanded further to include other heating technologies shortly.
Consumer finance and fabric efficiency
One of the biggest changes from the WHP is a new £5 billion public investment vehicle, the Warm Homes Fund, aimed at accelerating home upgrades through government-backed loans and financing. £1.7 billion has been allocated for low- and zero-interest consumer loans, backed by £300 million capital support to help consumers with the cost of solar panels, batteries, heat pumps and other technologies yet to be specified.
Earlier last year, we launched our Energy Efficiency Incentive (EEI). The policy initiative sought to direct the industry away from an over-reliance on subsidy-based incentives. It introduced a new proposal for unlocking investment in energy efficiency, rewarding in-use performance of efficiency measures, while providing stable, long-term policy to scale delivery further than public grants alone can.
We are delighted to see the Government recognise the importance of long-term solutions that reduce the cost of delivery for the taxpayer. However, we were disappointed to see that the new loan model does not cover fabric efficiency measures. More generally, the WHP lacks clarity on the role of insulation measures, and these measures can be costly for consumers.
The delivery of high-quality fabric efficiency measures is key to reducing fuel poverty, which costs the NHS over £1.4 billion annually[1]. We remain committed to our fabric first approach to retrofit and stand ready to work with the Government to expand the scope of their new loan scheme.
Health and wellbeing (regulation)
The SEA believes that regulation is just as important to raise standards and accelerate the development of energy efficient homes as grant subsidy programmes. Regulation is particularly important within the housing sector to drive effective outcomes for consumers, creating homes that are as warm and healthy as they are energy efficient.
The WHP provided some strengthening of the regulations placed on landlords to help reduce fuel poverty and, critically, address the repercussions this has on health and well-being. However, the Future Homes and Buildings Standard (FHBS) which will ensure new buildings are fabric efficient, use low carbon heating, and are ‘zero carbon ready’ has still not been published. Figures from the Energy & Climate Intelligence Unit[2] highlight how the delay to the standard has resulted in new build homes paying an extra £5 billion in energy bills between 2017 and 2025, and we hope that the Government lays out its plans for the new build sector as soon as possible.
The plan confirmed that the Decent Homes Standard (DHS), which currently applies to the social housing sector, will also be extended to the private rented sector between 2035 and 2037. The regulation requires social housing landlords to ensure that their tenants are living in safe and decent homes.
For the private rental sector, 1.6 million homes will have their homes upgraded to EPC Band C by 2030, through the introduction of new Minimum Energy Efficiency Standards (MEES). This will cover both fabric efficiency and smart energy/low carbon heating solutions.
We are also delighted to see that the WHP accompanied the release of a consultation on the new Home Energy Model (HEM) which will replace the current methodology for assessing home energy performance. This means that EPC ratings will be more accurate and better consider the benefits of modern low carbon technologies and fabric efficiency measures, rather than simply cost per m2. In parallel, the proposed introduction of SMETERs* provides the foundation for our EEI and will allow us to calculate a measured Heat Transfer Coefficient, offering a more accurate picture of the building’s energy performance.
Other important inclusions
The WHP also provided additional reassurance that the Government is taking consumer protections seriously as it seeks to decarbonise heating while creating more efficient homes and buildings. Simpler protections for consumers, fewer overlapping organisations and responsibilities, and improvements to the landscape for consumers to seek redress and financial protection will go far to providing consumers with greater confidence in new technologies and solutions.
We are also encouraged by plans to back up these ambitious new plans with a strong green workforce, with plans to increase the energy efficiency and clean energy workforce by 180,000 full time equivalent employees by 2030.
Conclusion
The WHP set out a clear roadmap for creating warmer, more energy efficient homes and buildings across the UK. It’s a positive step forward for the sector and will particularly help those living in social housing and those on low incomes.
However, there are still many unanswered questions for wider industry. Not least, while we expected further details on MEES for the Non-Domestic sector, it remained absent from the Plan. While we await further key announcements, such as the implementation date for the FHBS and the Warm Homes Fund call for evidence in the Spring, we look forward to continuing to work with the Government to plug policy gaps through our holistic positioning.
*Smart Meter Enabled Thermal Efficiency Ratings
[1] BRE report finds poor housing is costing NHS £1.4bn a year
[2] Energy & Climate Intelligence Unit | Families in new builds saddled…