Government Launches Warm Homes Plan

The Government has launched a £15 billion Warm Homes Plan to help up to 5 million households to upgrade their homes with energy saving technology and materials of their choice.

Homeowners

Under the Warm Homes Plan, homeowners will be able to apply for government-backed, low and zero interest loans to cover the cost of energy-saving installations. Information on how loans can be applied for are scheduled to be announced by government “later this year”.

Rooftop solar will be included ‘by default’ on new homes, under the Future Homes Standard (once again confirmed by Energy Secretary Ed Miliband as due to be implemented early this year).

The new plan measures are expected to triple the number of homes with solar panels on their rooftops by 2030.

For those who want to get a heat pump under the Warm Homes Plan, a £7,500 universal grant will cover some of the cost of installation, estimated at an average total of £18,000. It will also include the first ever offer for “air-to-air heat pumps” that can also cool homes in the summer.

In addition to solar panels (Photovoltaic and thermal) and heat pumps (ground source, air source (including air-to-air)), home upgrades available under government schemes will include home and heat batteries, smart controls, insulation (wall, floor, and roof) and draught proofing.

Low Income Support

The scheme will also target £5 billion for those on low incomes and in fuel poverty and for social housing. Support will cover the full cost of installing whatever technologies are the most suitable.

For example, families could receive fully funded installations of solar panels and a battery, to the full average cost (currently £9,000-£12,000).

For social housing residents, this could mean upgrades to entire streets at the same time.

Alongside reducing fuel bills, the Plan is designed to mitigate and adapt to climate change. Buildings are currently responsible for over a fifth of the UK’s territorial greenhouse gas emissions.

Rules for Landlords

New rules will be introduced to ensure landlords invest in upgrades over the coming years. It is estimated half a million families will be lifted out of fuel poverty by the end of the decade, partly addressing the 1.6 million children that live in private accommodation suffering from cold, damp, or mould.

The £15 billion government investment plan includes allocations for devolved governments in Scotland, Wales and Northern Ireland.

Warm Homes Agency

The creation of a Warm Homes Agency will see existing Ofgem staff transfer to the new organisation which will cover energy efficiency schemes for homes and other buildings. It will bring together schemes currently split across government, Ofgem and elsewhere, in the hope of creating a clearer, more efficient system.

“The new Warm Homes Agency must get up and running quickly to coordinate programmes and consumer protections, with procurement routes that give SMEs a fair chance to win work,” said Brian Berry, Chief Executive of the Federation of Master Builders. “If the plan is to succeed, the Government must give industry a genuinely stable pipeline: multi‑year funding, a clear timetable, and certainty over future standards and regulations. Consistency will be essential if small builders are to invest in skills.”

Broadly Welcomed

The Warm Homes Plan has been broadly welcomed by banks, utilities, fuel poverty groups and the renewables industry.

Angus McCarey, CEO of Uswitch, said: “We know many households are willing to take action to reduce their energy bills while keeping homes warm. More consumers need to feel confident that the technology is straight-forward to get in place, and, critically, makes sense financially.”

Gemma Grimes, Director of Policy and Delivery at Solar Energy UK, said: “Installing solar panels can slash hundreds of pounds off household energy bills each year, especially when combined with a battery energy storage system and a heat pump. With the loans and grants provided through the Warm Homes Plan, a huge proportion of the UK population will share the benefits. Almost two million smaller-scale installations have been made already, on homes and businesses – the industry stands ready and able to build millions more by 2030.”

MCS data shows that more households than ever are installing renewable energy systems. 2025 was another record year for heat pumps, batteries, and solar panels.

“Government grants and incentives have played a significant role in boosting this growth”, Garry Felgate, CEO of The MCS Foundation, said. “The introduction of Government-backed low-interest loans will provide further momentum by reducing upfront costs for more households. It will also serve to accelerate progress towards installing the 1.5 million heat pumps a year by 2035 that we need to meet climate targets. “

Green Home Finance

Over the next year, the Green Home Finance Strategic Partnership will work collaboratively with financial institutions, energy providers, consumer groups, and government to develop implementable solutions that will drive homeowner demand and remove barriers to innovation in green home financing.

More Jobs

Rhian-Mari Thomas, Green Finance Institute CEO, said: “This collaboration will turn ambition into action, creating jobs and making home energy upgrades a reality for everyone across the UK.”

The new WHP is expected to create 180,000 additional jobs in energy efficiency and clean heating by 2030.

Daniel Redfern, Head of Marketing Communications at Marley, said: “The roofing sector will be central to the successful delivery of the Warm Homes Plan, with solar panels acknowledged to be a primary technology solution. However, it’s now important that there is an increased focus on upskilling the existing workforce as well as attracting new talent into the industry to ensure we have the workforce in place to implement the plan at scale, both on retrofit projects and new builds.”

It is hoped that the current UK gas boiler industries will move to clean tech, with an aim to manufacture in the UK at least 70% of heat pumps installed in the UK. It includes trebling the Government’s investment in the heat pump supply chain to £90m.

>>Read more reaction to the Warm Homes Plan