The government has announced a £15 billion programme to upgrade homes across the country, aiming to reduce energy bills, improve energy efficiency and tackle fuel poverty over the next decade.
The Warm Homes Plan, unveiled today (21st January), is described by ministers as the largest home upgrade scheme in British history. The government says it could support improvements in up to five million homes by 2030, potentially lifting around one million households out of fuel poverty.
The plan combines targeted support for low-income households with a broader offer available to all homeowners and new protections for renters. It follows measures announced in the Spring Budget, which the government predict will reduce energy bills by an average of £150 for households from April. Around six million households are also expected to receive a £150 Warm Home Discount, bringing total average support to £300.
Upgrading homes is one of the most effective ways to reduce long-term energy costs, however, home insulation installations fell by more than 90% between 2010 and 2024 and many of those that were installed under various schemes were found to be extremely problematic. The National Audit Office last year revealed that 98% of the 23,000 homes that had external wall insulation installed were likely to suffer from damp and mould withour remedial work.
Under the Warm Homes Plan, £5 billion has been allocated to fully funded upgrades for low-income families. Depending on suitability, households could receive free insulation, solar panels, batteries or heat pumps. The government estimates that fully funded solar and battery installations typically cost between £9,000 and £12,000. Social housing upgrades may be delivered at a neighbourhood level, with entire streets improved at the same time.
For other households, the plan introduces government-backed low- and zero-interest loans to support the installation of solar panels, batteries and heat pumps. A £7,500 grant for heat pumps will remain available, alongside a new offer for air-to-air heat pumps, which can also provide cooling in warmer months. Ministers say the measures could triple the number of homes with rooftop solar by 2030.
The plan also includes new rules intended to strengthen protections for renters. The government estimates that 1.6 million children currently live in private rented homes affected by cold, damp or mould. Updated standards would require landlords to improve energy efficiency over several years, with financial support available to help fund the upgrades. The government estimates these measures could lift around 500,000 renting households out of fuel poverty by the end of the decade.
The programme is backed by £15 billion of public investment, including funding for devolved governments in Scotland, Wales and Northern Ireland. It also links to the Future Homes Standard, due to be introduced in early 2026, which will require new homes to be built with lower running costs and solar panels installed as standard.
The government’s press release was accompanied by no less that 28 enthusiastic quotes from across industry but there has ben some disquiet that there is no phaseout date for gas boilers, while Russell Dean, Deputy Divisional Manager at Mitsubishi Electric points out: ‘We know that these measures will be welcomed by homeowners – our own research found that 69% of homeowners in the UK agree that more funding should be made available for this type of switch.
‘However, the disproportionate cost of electricity still remains a roadblock for the uptake of renewable heating in the UK; in fact, a third (33%) of homeowners said it was the main reason they wouldn’t make the switch to a heat pump in 2025, and 15% would need to see a heat pump bring their energy bills down by £500 per year to consider one.
‘There is a clear solution to this, which the government must also consider. Reducing the price of electricity versus the volatility of gas and oil prices will be key to bringing down electricity prices and making heat pumps more affordable to. Not addressing this is the biggest opportunity missed for the residential sector, and the biggest challenge to increasing the uptake of more heat pumps now.
‘Whilst the plan offers much for households and domestic properties, support for businesses and commercial buildings remains extremely limited. The commercial sector continues to be held back by little to no governmental, regulatory, or legislative incentive to decarbonise. The lack of commercial focus signifies a missed opportunity to tackle the UK’s approximately 2 million non-domestic buildings, and any genuinely transformative action plan must address this.’
Photo: Watt A Lot
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