Government’s Warm Homes Plan Announced
The UK government has announced an ambitious plan to upgrade up to 300,000 homes next year, aiming to lower energy bills and deliver warmer, cleaner, and more efficient heating solutions for households across the country.
Key Highlights of the Warm Homes Plan
Boiler Upgrade Scheme
The Department for Energy Security and Net Zero (DESNZ) has announced an additional £30 million in funding for the Boiler Upgrade Scheme (BUS) for the 2024/25 financial year. This increase brings the total budget for the scheme to £180 million, further bolstering support for households transitioning to energy-efficient heating systems.
Performance Highlights for 2024/25
- Voucher Success: By the end of September 2024, 34,438 vouchers had been redeemed through the Boiler Upgrade Scheme, equating to approximately £218.1 million distributed since its launch. This milestone marks a significant achievement for the initiative.
- Record-Breaking October: October 2024 saw the highest number of vouchers issued and redeemed since the scheme began. DESNZ hopes this positive momentum will continue throughout the financial year.
Over-Allocation Permission for 2024/25
To ensure the scheme’s availability for the remainder of the financial year, DESNZ has granted Ofgem the authority to over-allocate vouchers up to a total of £250 million. This measure provides certainty that funding will remain accessible to eligible households as demand grows.
Budget for 2025/26 and Beyond
- For the 2025/26 financial year, the BUS is allocated a committed budget of £295 million, following the conclusion of the first phase of the Spending Review on 30 October 2024.
- Budgets for the 2026/27 and 2027/28 financial years will be determined during the second phase of the multi-year Spending Review, set to conclude in Spring 2025.
Simplifying Planning Rules
The plan includes removing planning restrictions allowing more people to install air source heat pumps without the need to apply for planning permission. Research from Octopus Energy reveals that 34% of potential heat pump adopters are discouraged by the planning process, making this reform a game-changer.
The changes, which are being made by Ministry of Housing, Communities & Local Government (MHCLG) early next year, will amend the existing permitted development right to:
- Remove the 1m boundary rule, enabling heat pumps to be installed within 1m of the property boundary.
- Increase the size limit of the heat pump for dwellinghouses from 0.6m3 to 1.5m3.
- Double the number of heat pumps permitted, from one to two for detached dwelling houses.
- Support the rollout of air-to-air heat pumps that can also provide a cooling function.
Supporting Vulnerable Households
Social housing residents, low-income families, and renters will benefit from funded energy efficiency upgrades, including insulation and low-carbon heating, through initiatives such as the Warm Homes: Social Housing Fund and the Warm Homes: Local Grant.
Managing approximately £3.2 billion in investment from the government, social housing providers, and supplier obligations during 2025-2026, this initiative will deliver measures aimed at reducing energy bills and providing cleaner heating solutions for up to 300,000 households, creating warmer, more energy-efficient homes.
Investing in British Manufacturing
The plan prioritises domestic manufacturing, ensuring the UK is positioned as a leader in clean energy innovation and production.
Starting 1 April 2025, the government will introduce a reformed Clean Heat Market Mechanism, designed to give manufacturers the time needed to scale up supply chains. These changes aim to make heat pumps an even more attractive option for households, driving sales growth while avoiding penalties for those purchasing new gas boilers. Additionally, government support will be available for every heat pump installation required under the mechanism in the 2025/26 financial year.
To support the industry, the government is investing over £5 million in Ideal Heating, marking the first award from the Heat Pump Investment Accelerator Competition. This funding kickstarts the development of a homegrown heat pump industry, enhancing the UK’s energy security and creating hundreds of low-carbon jobs.
How The Investment Looks
With approximately £3.2 billion in investment planned for 2025-2026, up to 300,000 homes are expected to be upgraded through a combination of grant funding, co-funding, and supplier-led schemes. The projected upgrades include:
- Up to 60,000 homes upgraded through the Warm Homes: Social Housing Fund, supported by £374 million in grant funding for Wave 3 and an additional £600–700 million in co-funding from social housing providers across Waves 2 and 3.
- Up to 9,000 homes upgraded under the Warm Homes: Local Grant scheme, backed by £88 million in grant funding.
- Up to 39,000 homes improved through the Boiler Upgrade Scheme, with a funding allocation of £295 million.
- Up to 200,000 homes upgraded via supplier-led initiatives such as ECO4 and the Great British Insulation Scheme (GBIS). These figures are based on Ofgem’s delivery statistics, with adjustments to reflect expected growth in GBIS delivery due to recent trends.
Supporting the Clean Energy Mission
The Warm Homes Plan aligns with the government’s broader goal to make the UK a clean energy superpower. Every new wind turbine, solar panel, and energy infrastructure project contributes to reducing dependence on imported energy and achieving energy independence. By investing in greener, more efficient homes, the Warm Homes Plan not only lowers household bills but also accelerates the transition to a sustainable, energy-independent future for the UK.
How Radiant Renewables Can Help
As experts in sustainable building solutions, Radiant Renewables is well-positioned to help homeowners, housing providers, and businesses take full advantage of these government initiatives.
From heat pump installations and home insulation to comprehensive energy efficiency solutions, we can guide you through grant applications and provide tailored services to upgrade your property, reduce energy costs, and contribute to a greener future.
01400 250572 | info@radiant-renewables.co.uk
