The government’s Warm Homes Plan is expected to lift ‘half a million families’ out of fuel poverty by the end of the decade.
The plan was launched this morning (21st January), committing £15bn over the next five years to households across the UK. It was first proposed in 2024 and has taken two years for the final details to be published.
Funding will support households to install solar panels, batteries, heat pumps and insulation to cut energy bills and reduce emissions driving the climate crisis.
According to the UK Green Building Council, Britain has one of the least energy-efficient housing stocks in western Europe and almost 29 million homes will need to be retrofitted before 2050, if the UK is to meet its net zero targets.
Under the Warm Homes Plan, families who cannot afford to retrofit their properties will be able to apply for government-backed low and zero-interest loans to fund green upgrades. The announcement follows Labour’s intervention to cut around £150 off energy bills for families this April.
Some of the key measures in the plan include:
- An additional £600m for low-income households to cover the full cost of solar panels and batteries, taking the total funding to £5bn
- Low and zero-interest loans for households regardless of income
- Extending the Boiler Upgrade Scheme for another year to 2029/30, offering grants of £7,500 for air source heat pumps
For households that are able to contribute towards costs, upfront expenses are expected to reach around £5,000, even with government grants.
However, the government estimates that installing solar panels, batteries and a heat pump in the average three-bedroom semi-detached home could save around £500 a year on energy bills.
Although, social charity Nesta and green energy charity MCS Foundation have estimated the annual savings could exceed more than £1,000.
Prime Minister Keir Starmer, said: ‘A warm home shouldn’t be a privilege, it should be a basic guarantee for every family in Britain.
‘Today’s plan marks a turning point. It will help slash energy costs and life up to a million people out of fuel poverty.
‘This is a government bearing down on the cost-of-living crisis. By driving bills down for good and upgrading millions of homes, we’re giving people the security and the fair shot they need to get on in life.’
Energy Secretary Ed Miliband added: ‘It is a scandal that millions of people in our country do not have the security of a home that is warm, affordable and safe.
‘With this investment, we embark on a national project to turn the tide – waging war on fuel poverty and taking another step forward in tackling the affordability crisis for families throughout Britain.’
Low-carbon technology installations will only be available to homeowners or people in social housing, but the Warm Homes Plan includes changes in renters’ rights. From 2030, landlords will be required to ensure rental properties meet a minimum energy efficiency rating of EPC C, up from the current minimum of EPC E.
Currently, EPC ratings are based on estimated running costs rather than the actual energy efficiency, which can result in homes receiving lower scores after heat pump installations.
With this in mind, the government confirmed it will announce reforms to the EPC assessment process later this year.
In a press release the government stated: ‘By updating protections for renters, and supporting landlords to make these upgrades in a fair way over several years, an estimated half a million families will be lifted out of fuel poverty by the end of the decade.’
Industry experts also hoped Labour’s plan would include updated efficiency standards for new-build homes under the Future Homes Standard, but the government said these requirements will be published over the next few months.
Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit, said: ‘Some decisions have been a long time coming, such as minimum standards for private renters and the introduction of the Future Homes Standard for new builds.
‘That timelines are being pushed back is likely to be frustrating for those who are still colder and poorer in shoddy rental homes, but the public overwhelmingly back better standards for new builds, so should be encouraged to see new requirements on the house builders at long last.’
Image: Ticka Kao
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