The government is set to upgrade up to 300,000 homes next year as part of its Warm Homes Plan, aiming to reduce energy bills and deliver cleaner, more efficient heating solutions.
This initiative includes grants for heat pumps, support for low-income households and renters, and significant investment in British manufacturing.
Expanded Heat Pump Grants: Homeowners in England and Wales can now access a £7,500 grant through the Boiler Upgrade Scheme. Heat pumps can save households approximately £100 annually compared to traditional gas boilers when paired with smart tariffs.
Easier Installation Rules: New planning reforms will remove the requirement for heat pumps to be installed at least one meter from property boundaries in England, eliminating a barrier that has deterred 34% of potential users, according to Octopus Energy.
Targeted Support for Vulnerable Groups: Social housing residents, renters, and low-income households will receive funded upgrades, such as insulation and low-carbon heating, through the Warm Homes: Social Housing Fund and the Warm Homes: Local Grant.
The government has announced:
Increased Budget for Heat Pumps: An additional £30 million for the Boiler Upgrade Scheme this year, with nearly double the budget—£295 million—allocated for 2024/25.
Broader Investment in Energy Efficiency: Approximately £3.2 billion is earmarked for home upgrades by 2025/26, benefitting up to 300,000 households and reducing energy bills by as much as £200 annually for some homeowners.
The Warm Homes Plan includes measures to back consumers and foster innovation:
Energy Efficiency Standards: Consultation on raising minimum energy efficiency standards for rented homes by 2030 aims to lift over one million households out of fuel poverty.
New Boiler Standards: Upcoming regulations will enhance efficiency for both gas boilers and heat pumps, potentially saving households £30 annually on running costs.
Boosting British Manufacturing: The Heat Pump Investment Accelerator competition has awarded its first grant of over £5 million to Ideal Heating, kickstarting a UK-based heat pump industry. The government is also working closely with trade unions to ensure high-quality, low-carbon jobs throughout the supply chain.
The Warm Homes Plan aligns with the government’s mission to make Britain a clean energy leader. By harnessing homegrown energy sources—such as wind and solar—and rolling out efficient heating solutions, the plan reduces reliance on international gas markets and safeguards households against energy price volatility.
Miatta Fahnbulleh, Minister for Energy Consumers, emphasized: “The idea at the heart of our Warm Homes Plan is a simple one – all families deserve the security of a home they can afford to heat.
But for too long, that has been out of reach for far too many people who have been left with draughty homes and sky-high bills. That is why we are taking immediate action today to make cleaner heating available to more households.
This follows our plan to lift over one million households out of fuel poverty by consulting on boosting minimum energy efficiency standards for all renters by 2030, delivering warmer homes and cheaper bills”.
By taking bold steps to accelerate the transition to cleaner, affordable heating, the government aims to cut energy bills, tackle fuel poverty, and create new jobs and skills across the UK. This initiative is part of a broader strategy to deliver energy independence and build a more sustainable future for households nationwide.