The Government has introduced new plans to boost energy efficiency upgrades in homes across England. The Local Grant and Social Housing Fund Wave 3 form part of the government’s Warm Homes Plan, which aims to upgrade an estimated 5 million homes over the next five years in an effort to reduce energy bills and tackle fuel poverty.

Warm Homes Plan

The government’s Warm Homes Plan, introduced in its election manifesto, promises to upgrade five million homes over the next 5 years. This is to be achieved through the introduction and renewal of funding schemes and grants and by working with combined authorities, local and devolved governments to boost home improvement measures, such as insulation, solar panels and low carbon heating.

As part of the overarching Warm Homes Plan, the government has announced new and updated funding mechanisms which introduce new targets and provide the backing needed to improve the energy performance of the country’s worst performing homes.

Local Grant (Policy for Local Authorities) – England Only

The Warm Homes: Local Grant is a government-funded scheme which will be delivered by Local Authorities from 1^st April 2025. It will provide grants for energy performance upgrades and low carbon heating to low income households with a D to G rating on their Energy Performance Certificate (EPC).

A ‘non-binding’ target has been set to upgrade these homes to EPC rating of C. Where this is not possible within the cost caps (£15k per home for energy performance upgrades), a ‘value for money’ approach to energy efficiency measures selection will be adopted which could include installing low carbon heating (also cost capped at £15k per home).

Owner occupied and private rented sector households are eligible (as well as some social housing under specific circumstances). However the property cannot be a new build and must be an ‘existing’ domestic building.

Owner occupiers and tenants are not required to make any contributions to the cost of energy efficiency upgrades as part of this grant. Private rented sector landlords can also receive one home fully funded, however additional homes will require a 50% cost contribution.

The total pot for this funding remains unclear. However, as this will look to supersede previous funding through the Local Authority Delivery scheme (LAD), it is expected to be upwards of £500 million. Local Authorities will be asked to express their interest in the funding in the next few months and can work independently or as part of a consortium.

Implications for the Energy Assessment and Retrofit Industry?

All properties which receive improvements must be validated and assessed in line with PAS 2035:2023, with energy efficiency measures installed in accordance with PAS 2030:2023. This means that TrustMark Approved retrofit professionals, such as Retrofit Assessors, Retrofit Coordinators and Retrofit Installers, would need to be involved and work alongside Local Authorities to deliver the right improvement measures.

Social Housing Fund Wave 3 (Policy Guidance for Social Housing Providers) – England Only

The Warm Homes: Social Housing Fund (WH:SHF) Wave 3, formerly known as the Social Housing Decabonisation Fund (SHDF), will provide funding to local authorities and others who own social housing stock to install energy efficiency upgrades and low-carbon heating measures to existing domestic homes in England. The scheme is set to run until 30^th September 2028.

Wave 3 aims to upgrade a significant amount of the social housing stock to meet an EPC rating of C where achievable within the allocated cost cap. Unlike previous waves of the funding, the cost cap is now fixed at £7,500 per home.

Implications for the Energy Assessment and Retrofit Industry?

As with The Warm Homes: Local Grant, all projects will need to adhere to PAS 2035:2023, which means that the services of TrustMark approved retrofit professionals, such as Retrofit Assessors, Retrofit Coordinators and Retrofit Installers will be required.

Further Resources:

Local Grant (Policy for Local Authorities): https://assets.publishing.service.gov.uk/media/66f1573cbd3aced9da489bcf/Warm-Homes-Local-Grant-guidance.pdf

Social Housing Fund Wave 3 (Policy Guidance for Social Housing Providers): https://assets.publishing.service.gov.uk/media/66f4275530536cb92748271a/warm-homes-social-housing-fund-wave-3-scheme-guidance.pdf