Skip to content 
News
UK Government to Help 300,000 Homes Save Money and Enjoy Cleaner Heating
- From: Kevin Smith
- Published 6 January 2025
The UK government intends to upgrade as many as 300,000 homes in 2025 as part of ambitious moves to address energy inefficiency and cut household bills through the Warm Homes Plan. It merges funding with regulatory reforms and support for greener technologies. It is a comprehensive push to make heating cleaner and more affordable for households throughout the UK.
The ambitious plan will cut energy bills for both homeowners and tenants. It will also make homes more sustainable and increase the country’s energy independence. This is coming at a time when many families struggle to pay high energy bills, worsened by geopolitical tensions and reliance on imported gas.
A Warmer Future for Homes with Warm Homes Plan
The centerpiece of the plan is to expand the Boiler Upgrade Scheme. Homeowners in England and Wales are now eligible for a grant of up to 7,500 pounds for the installation of a heat pump. It is a low-carbon substitute for traditional gas boilers drawing from either the air or the earth. Heat pumps could save up to £100 off household fuel bills per year when combined with a smart tariff, as against other gas systems.
More has been done to try to make life easier for those installing a heat pump. The requirement for planning applications for air-source heat pumps will be removed in early 2025 in England. It will discard the current restrictive “1-metre rule.” It is expected that this change will significantly help more households to use technology. And tear down the red tape that so far has kept homeowners at bay.
It will also benefit residents in social housing and in low-income households through the Warm Homes: Social Housing Fund and Local Grant Schemes. It offers insulation and heating upgrades that could save up to £200 per year for an average household. This also provides improved insulation and ensures warmer and better living conditions.
UK Government Investing in Cleaner Heating
It said it was committing £295m to the Boiler Upgrade Scheme for the next financial year, while an additional £30m this year would be brought forward to meet demand. This, combined with private co-funding, is part of a wider £3.2bn investment into energy efficiency, which should see up to 300,000 homes transformed by the end of 2026.
The funding will be distributed through various programs, including:
- The Boiler Upgrade Scheme: It will help approximately 39,000 homes switch to low-carbon heating systems.
- Social Housing Fund and Local Grants: More than 69,000 homes are targeted for energy upgrades.
- ECO4 and the Great British Insulation Scheme: It upgraded around 200,000 homes through energy supplier-led schemes.
Building Energy Independence
The announcement also fortifies the government’s commitment to making the UK less dependent on foreign energy markets, focusing on homegrown clean energy in light of an energy crisis driven by an invasion of Ukraine by Russia. Each new turbine installed, every solar panel deployed, and each low-carbon heating system helps the UK step closer to energy independence while tucking away carbon emissions.
Energy Minister Miatta Fahnbulleh described the plan as a crucial step toward a fairer, greener future.
“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,” she said. “But for too long, that has been out of reach for far too many people.”
Supporting Innovation and Jobs
But this is not just about cost-cutting; it’s also a strong boost to the UK’s green economy. More than £5 million was awarded to Ideal Heating, winner of the first Heat Pump Investment Accelerator Competition, driving innovative scaling in the UK’s production of heat pumps.
Manufacturers and industry experts have welcomed these developments. Jason Speedy, the chief operations officer at Ideal Heating, exclaimed how the funding supports the transition to low-carbon heating solutions, aligning with the UK’s net zero targets. “This funding is a vote of confidence in our business,” he noted.
The government has introduced the Clean Heat Market Mechanism, which is expected to begin in April 2025. The reform incentivises manufacturers to increase the supply of heat pumps while making them more accessible to households and bringing down their upfront costs.
Check Eligibility For ASHP Grant!
If you or any of your household is on benefits, you may be eligible for Free ECO4 Grants.
Addressing Fuel Poverty
Another key commitment is to tackle fuel poverty. The government also promised to consult on increasing the minimum standards of energy efficiency in private rented homes before 2030. It is to make their homes warmer and cheaper for tenants to heat up. Such a step can get more than a million households out of conditions of fuel poverty, decently dwelling, and are part of the highly vulnerable residents in the UK.
Charities and campaigning groups have welcomed the move. National Energy Action’s Chief Executive, Adam Scorer, said the plan was most significant for low-income households.
“Warm homes are the foundation of healthier, happier, more productive lives,” he said.
Smoothing the Transition Towards Greener Technologies
The government is removing barriers that complicate heat pump installations to encourage wider adoption of greener technologies. Easier planning rules and more accessible grants will make switching to low-carbon systems easier for households.
Industry leaders such as Greg Jackson, CEO of Octopus Energy, also welcomed the changes. “Removing outdated and unnecessary red tape is an urgent priority,” he said.
Industry Leaders Welcome UK’s Green Heating Reforms
The UK government’s recent reforms, which will further boost the adoption of heat pumps and enhance the Boiler Upgrade Scheme, have been welcomed by stakeholders from both the energy and housing sectors. Key figures praise the changes for tackling the most significant barriers to green heating and accelerating the pace at which the country tackles its net-zero goals.
Centrica CEO Chris O’Shea immediately hailed the removal of the restrictive 1-metre planning rule for heat pumps. He suggested, “It makes installation easier and greatly enhances the Boiler Upgrade Scheme. Heat pumps are central to decarbonising home heating. And through our Hive Heat Pump offer, we aim to help customers save up to £456 annually on energy bills.”
Industry leaders also welcomed the wider effect of these measures in driving innovation and scaling up green technologies. Greg Jackson, chief executive of Octopus Energy, said, “Outdated planning rules have deterred many from adopting heat pumps. Removing such red tape allows cleaner, efficient heating technologies to reach British homes.”
Dhara Vyas, the chief executive of Energy UK, underlined the importance of continued investment: “These reforms reaffirm the government’s commitment to heat decarbonisation. They ensure a route to scale low-carbon technologies and greater energy security.”
Other stakeholders to comment on this move included CEOs of Worcester Bosch, Ideal Heating, and Vaillant Group. They all echoed the fact that the government has taken some really important steps in removing key barriers and increasing funding. It gives clarity to future investors in clean heating solutions.
Major Funding Boost for the Warm Homes Plan
The UK government has promised, in its Autumn 2024 Budget, £3.4 billion for the Warm Homes Plan from 2025 to 2028. It has agreed that, in 2025-2026, £1 billion will be available for the scheme, made up of :
- £374 million for the Warm Homes: Social Housing Fund, co-funded by social housing providers with £600-£700 million.
- £88 million to the Warm Homes: Local Grant Scheme.
- £295 million for the Boiler Upgrade Scheme.
Combined with co-funding and energy supplier-led initiatives under ECO4 and the GBIS, the total investments for 2025-2026 are estimated to reach £3.2 billion.
This funding is to upgrade up to 300,000 homes, compared with around 120,000 in 2023-2024. The upgrades in 2025-2026 will include:
- 60,000 homes through social housing grants and co-funding.
- 9,000 homes via local grant schemes.
- 39,000 homes under the Boiler Upgrade Scheme.
- 200,000 homes via ECO4 and GBIS supplier-led schemes.
The Warm Homes Plan has demonstrated the government’s commitment to energy-efficient housing through the removal of the 1m rule for air-source heat pumps. Thus, supporting a greener future for British homes.
Looking Ahead
The Warm Homes Plan forms a radical step toward the UK’s journey to be sustainable and energy-independent. This policy investment in cleaner heating technology, as well as improving energy efficiency, provides household savings for money. It will also pave the way toward a greener future.
This is all part of plans to reach up to 300,000 homes a year by 2026, building on commitments to support families. It also drives innovative jobs in the green economy. This is exactly the sort of innovation we want for our transition to a net-zero economy. One that can show in an important way how national government, industries, and communities interact.
