£1.8bn to tackle energy inefficient homes and buildings

The government has announced the allocation of £1.8 billion of funding for home heating decarbonisation and energy efficiency upgrades.

The Department for Energy Security and Net Zero has said that more than 115,000 homes will receive upgrades following the announcement of the latest waves of the Social Housing Decarbonisation Fund (SHDF) and Home Upgrade Grants (HUG).

The biggest chunk of £778 million will be provided via the most recent wave of the SHDF, which targets upgrades for housing association and council homes that do not meet the EPC (Energy Performance Certificate) Band C standard.

The government said that social landlords will supplement the SHDF cash with £1.1 billion worth of match funding for energy efficiency upgrades and installing heat pumps.

The second biggest sum (£630 million) has been earmarked for phase 2 of the HUG, which provides energy efficiency upgrades and low carbon heating for low income households living in off-gas grid properties below EPC Band C. The HUGs are distributed via local authorities.

The remainder of the £1.8 billion is accounted for by £409 million for the Public Sector Decarbonisation Scheme, which provides low carbon heating upgrades for public buildings, like schools and hospitals.

The cash allocated today was first earmarked for energy efficiency and heating decarbonisation in the government’s Heat and Buildings Strategy, which was published in 2021.

However campaigners have expressed concern that even after today’s announcement, the government is still falling short of its 2019 general election manifesto commitment of £6.6 billion for energy efficiency during the current Parliament.

Juliet Phillips, senior policy advisor- clean economy at environmental thinktank E3G, said: “The UK’s programmes that support warmer social housing and public buildings can build the foundations for a retrofit mass-market. We welcome the latest funding allocations from the government but note that there remains a considerable green homes investment gap that needs addressing before the UK can get on track for net zero – as well as fulfilling the Conservatives 2019 manifesto pledges. E3G’s recent analysis found that around a third of what was promised by 2025 is yet to be allocated.”

According to this analysis, published by E3G in February, the government is £2.2 billion short of honouring its 2019 pledge.

But Adam Scorer, chief executive of National Energy Action said the SHDF and HUG allocations will help progress on the government’s legal fuel poverty targets.

Emma Pinchbeck, chief executive of Energy UK, added: “Improving the energy efficiency of Britain’s draughty homes and buildings is the best way to cut energy bills permanently, while also boosting the UK’s energy security and reducing carbon emissions.

“Today’s announcement will rightly prioritise those who need support the most like low-income households, social housing and public buildings. Industry will work with government to build on these vital schemes and to remove any barriers that prevent households and businesses from saving money on their bills by reducing heat loss and conserving energy.”