Published on 21 January, The Government’s much-anticipated Warm Homes Plan (WHP) sets out plans for funding home energy upgrades between now and 2030. If delivered, it will play a big role in reducing fuel poverty and in tackling the climate emergency – but there is much more still to do, and the community energy sector will have a big role to play in that.

The WHP presents a stark picture of the impacts of fuel poverty and climate change: these include the £900 million spent each year by the NHS on dealing with the effects of cold and damp housing, while in London, home heating has recently overtaken transport as the main source of nitrous oxide emissions.

From Insulation to Solar and Batteries

To help tackle this, the Plan sets an ambitious target to upgrade 5 million homes by 2030, including £5 billion of grant and loan funding for lower income households and social renters. The detail of this support is less promising than the headline, we think the £5bn would be better directly targeted and be fully grant, not loan-based. While previous schemes like the Energy Company Obligation (ECO) focused on fabric measures such as insulation, the new Plan switches emphasis and funding to clean technology, in particular rooftop solar and batteries.

The plan highlights that these technologies to date have been much more accessible to better-off homeowners – and so promises capital funding for installations for fuel poor households, as well as working more closely with councils, housing associations and landlords to support upgrades in the social and private rented sectors.

Insulation is still “a cornerstone of energy efficiency”, and the Plan points out that funding remains available for fabric measures under the Warm Homes: Local Grant and Warm Homes: Social Housing Funds, for private and socially rented households.

However, the WHP is especially lukewarm about solid wall insulation, commenting that installations have a high level of non-compliance with regulations and that the government will only prioritise fabric measures “that deliver strong value for money”. This means that the Plan is clearly not, and is not intended to be, a like-for-like replacement for ECO and other past schemes in its approach.

Warm Homes Fund

Other key funding to be delivered via the Plan includes £5bn from a new Warm Homes Fund. This is intended to support the home upgrade supply chain, with loans and investments to bring down costs and scale up deployment of solar, batteries, heat pumps and related technologies.

The plan also confirms that private rented households will benefit from new minimum energy efficiency standards by 2030 – these standards may not be effective in London where many privately rented homes need expensive retrofit to meet the new guidelines. Meanwhile the Future Homes Standard will ensure that all new homes are fitted with solar panels and clean heating mechanisms as standard from this year.

Warm Homes Agency

A new Warm Homes Agency will be responsible for delivering the Plan. This new Agency is intended to consolidate responsibility for delivering home upgrades, supporting households with information, support, and a more robust consumer protection scheme. The Agency will also support installers in developing capacity to install these technologies and to transition from fossil fuel-based systems.

The final round of ECO was unfortunately a serious failure, with most insulation works not meeting basic standards and often requiring remedial work. A previously announced Government review of standards, oversight and protections for energy efficiency and microgeneration installations indicates that the need for reform is understood.

The review would do well to draw on Selce’s own experience from its Future Fit Homes programme, and in particular the view we have set out before that Retrofit Coordinators should be independent of commercial companies. We have also highlighted that ECO and the similar Great British Insulation Scheme rarely ever saw solar installations in London because of the cost premium associated with installations in the capital, and the system brought forward through the Plan will need to address this.

There is a bigger concern, which is that ECO is being abruptly wound down with no interim funding for new retrofit while this plan is rolled out. This creates a serious gap in support for vulnerable households which must be tackled urgently.

Community Energy’s Role

More broadly, there is a welcome recognition of the role of community energy in supporting the delivery of the Plan and wider climate and energy efficiency aspirations.

Although full details are awaited in the forthcoming Local Power Plan, the WHP states that “investment could support local energy cooperatives or community-led home upgrade schemes” and highlights community energy’s role in supporting local area electrification and clean technologies. This includes a mention for Selce’s Energy Cafes, which support those experiencing fuel poverty in our area.

We are pleased by this recognition but the plan could do more to set out how in-person energy advice will be supported, which is needed by vulnerable and digitally excluded households.

We also welcome the Plan’s focus on place and the need for effective coordination between local authorities, distribution network operators (DNOs), housing providers, community energy groups and others to support upgrades across local areas and to integrate activity where possible. Our sector clearly has the experience and know-how to support this approach, and we look forward to engaging with local partners to deliver it.

It is also positive to see a renewed commitment to support for upgrades for all households. This includes a renewal of the Boiler Upgrade Scheme – providing upfront subsidy for heat pump installation to all eligible households – until 2030; and support for new zero and low interest loans for home upgrades through the Warm Homes Fund, with more details to follow.

Overall, the Plan’s ambitions are to be welcomed, but at this stage it is only a framework – and there is much to do quickly to deliver these ambitions by 2030. Selce and the community energy sector will play our part – but it’s important that these ambitions remain the highest priority for government as they move to implementation, and that they draw on the knowledge and resources of groups like ours.