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Energy Efficiency Support on the Way

27.12.2023

The December 18 Press Release by the UK government indicates that more energy efficiency support is on the way. The UK government has allocated £6 billion to improve energy efficiency in homes, with a focus on low-income and social households. This includes insulation for about 500,000 homes and grants for heat pumps, boosted by an additional £1.5 billion following the success of a scheme increasing heat pump grants to £7,500. Energy Secretary Claire Coutinho emphasises the goal of reducing energy bills and improving living standards. Chancellor Jeremy Hunt highlights the investment’s role in enhancing energy security and reducing reliance on international gas prices. The initiative supports green jobs and includes several specific schemes.

The financial breakdown

Overall, the Government is committing to spend £12.6 billion by 2028, broken down into several initiatives. The recently released Future Homes and Building Standards provides some background information about the schemes and energy efficiency measures. However, the 18th December press release provides the following breakdowns:

  • the Boiler Upgrade Scheme, allocated a further £1.5 billion, to support families in England and Wales move away from gas to energy efficient, low-carbon heat pumps
  • a new £400 million energy efficiency grant, launching in 2025, for households in England to make changes such as bigger radiators or better insulation
  • a new local authority retrofit scheme, allocated £500 million to support up to 60,000 low-income and cold homes, including those off the gas grid, with measures such as insulation
  • the Social Housing Decarbonisation Fund, allocated £1.25 billion to support up to 140,000 social homes to be insulated or retrofitted, improving energy performance and lowering bills
  • the Green Heat Network Fund, allocated £485 million to help up to 60,000 homes and buildings access affordable, low carbon heating through new heat networks, reducing our use of fossil fuels and providing more reliable heating
  • the Heat Network Efficiency Scheme, allocated £45 million to improve around 100 existing heat networks, in a move that will reduce bills and improve reliability
  • the Industrial Energy Transformation Fund, allocated £225 million, will continue to help businesses transition to a low-carbon future

Businesses, heavy industries and public sector organisations such as schools and hospitals will also benefit from the Public Sector Decarbonisation scheme and wider industrial energy efficiency and decarbonisation support, through to 2028.

Scheme Allocation Years of funding in the next spending review period
Boiler Upgrade Scheme £1.545bn 2025/2026 – 2027/2028
Heat Pump Investment Accelerator £15m 2025/2026
£400m energy efficiency grant £400m 2025/2026 – 2027/2028
Local authority retrofit scheme £500m 2025/2026 – 2027/2028
Social Housing Decarbonisation Fund £1.253bn 2025/2026 – 2027/2028
Heat Network Transformation Programme (including: Green Heat Network Fund, Heat Network Efficiency Scheme) £530m 2025/2026 – 2027/2028
Public Sector Decarbonisation Scheme £1.17bn 2025/2026 – 2027/2028
Industrial Energy Transformation Fund (IETF) £225m 2025/2026 – 2027/2028
Industrial Energy Efficiency and decarbonisation (further details to be announced in due course) £410m 2025/2026 – 2027/2028
  • further detail on the design of the £400 million energy efficiency grant will be announced in due course, including the naming of the scheme
  • the Great British Insulation Scheme and Energy Company Obligation (ECO) are set to help up to 700,000 families install improvements such as insulation by March 2026
  • eligibility information for the Great British Insulation Scheme and ECO
  • the new local authority retrofit scheme will be open to households on low incomes. It is planned to open in 2025
  • £220 million of the funding for the Heat Networks Transformation Programme (HNTP) was already announced in March 2023
  • the Heat Network Zoning Consultation runs until 26 February 2024
  • £185 million of the funding for the Industrial Energy Transformation Fund (IETF) was announced as Phase 3 on 22 November. The rest of IETF funding is being delivered through Phase 2
  • the total funding for the Heat Pump Investment Accelerator Competition remains at £30 million but £15 million of this is in 2024/2025
  • the Future Homes and Buildings Standard consultation runs until 6 March 2024

Source: Gov.uk

Which of these grants can you use for EWI?

External wall insulation is well known to be one of the most impactful energy efficiency measures. Independent regulators like Ofgem and the Energy Savings Trust indicate that EWI systems can save up to £800 a year on energy bills. Therefore, it’s crucial to consider which of the UK government’s grants are applicable for the provision of EWI:

  1. Great British Insulation Scheme (GBIS): This is a new government scheme, previously known as ECO+, designed to help people insulate their homes and make them more energy-efficient. It targets households living in the least energy-efficient homes (those with an Energy Performance Certificate rating of D or below) and in the lower Council Tax bands (A-D in England, A-E in Scotland and Wales). The scheme offers support for a range of insulation types, including external wall insulation, and may cover the cost in full or require a contribution depending on the property and measure​​​​​.
  2. Home Upgrade Grant (HUG): This grant is available for low-income households living in off-gas grid homes in England. It covers at least 60% of the costs of insulation and offers grants to landlords as well. To be eligible, you must live in England, be disconnected from the gas grid, qualify as a low-income household, and have an Energy Performance Certificate (EPC) between D and G​​​.
  3. Energy Company Obligation (ECO) Scheme: This scheme obligates energy suppliers to help households reduce their heating bills through the installation of energy efficiency measures, including external wall insulation. The ECO+ scheme is an extension of this, focusing on lower-cost insulation measures.
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