In January 2026, the UK government published the Warm Homes Plan — a long-term blueprint for improving the energy efficiency of Britain's homes and accelerating the switch away from fossil fuel heating. Backed by what the government describes as the largest-ever capital allocation to home energy efficiency and heating improvements, the plan sets out how public money will flow to households through a range of grants, obligations and regulatory measures between now and 2030. For homeowners, understanding how the plan is structured — and which parts of it you can actually access — is the first step toward reducing your energy bills and increasing the long-term value of your property.
What Is the Warm Homes Plan?
The Warm Homes Plan is the Labour government's overarching policy framework for decarbonising the UK's housing stock. It does not replace existing schemes outright; instead, it acts as an umbrella strategy that co-ordinates funding across multiple programmes — including the Boiler Upgrade Scheme, the Energy Company Obligation (ECO4), the Great British Insulation Scheme, and a new scheme called the Warm Homes: Local Grant — under a single set of ambitions. The central goal is to bring as many homes as possible up to an EPC rating of C or above while simultaneously supporting the installation of low-carbon heating systems such as heat pumps. The government has committed £15 billion over the current Spending Review period to achieve this, targeting a meaningful reduction in household energy costs and supporting an estimated 180,000 jobs in the clean energy sector by 2030.
The Warm Homes: Local Grant — the New Route to Funding
One of the most significant additions under the Warm Homes Plan umbrella is the Warm Homes: Local Grant (WH:LG). This scheme channels funding through local authorities in England, allowing councils to identify lower-income households in properties with poor energy performance and direct grant support toward them. It replaces the previous Home Upgrade Grant. If you own your home and your property sits at EPC band D or below, and your household income falls below the qualifying threshold set by your local authority, you may be eligible for fully-funded or heavily subsidised improvements — which can include insulation, heat pumps, solar panels, and other energy-saving measures. Because delivery is managed locally, the availability and precise terms vary by area. Contacting your local council or checking the government's Find a Scheme tool is the most reliable way to confirm whether the scheme is running in your area.
The Boiler Upgrade Scheme: Still Open to All Homeowners
Unlike means-tested routes, the Boiler Upgrade Scheme (BUS) is available to any homeowner in England or Wales who wants to replace a fossil fuel heating system with a low-carbon alternative, regardless of income. The current grant levels are:
- £7,500 toward an air source heat pump
- £7,500 toward a ground source heat pump
- £5,000 toward a biomass boiler (subject to location and fuel availability criteria)
- £2,500 toward an air-to-air heat pump
The grant is paid directly to an MCS-certified installer, who deducts it from the total cost they charge you. This means you never handle the grant money yourself — the process is administratively straightforward once you have found an eligible installer. One grant per property applies, and you cannot use the scheme if your property already has a low-carbon heating system in place. Because the installer must be MCS-certified to apply for the voucher on your behalf, using the Renovation Register to find a qualified local installer is a practical starting point.
ECO4 and the Great British Insulation Scheme: Targeting Lower-Income Households
For homeowners who receive qualifying benefits — including Universal Credit, Pension Guarantee Credit, income-based Jobseeker's Allowance, or certain other means-tested payments — the Energy Company Obligation (ECO4) can fund insulation and, in some cases, heating upgrades at no cost to the household. Your property must be rated D, E, F, or G on its Energy Performance Certificate to qualify as an owner-occupier. Separately, the Great British Insulation Scheme targets properties rated D or below (or E, F, or G in some circumstances) and offers a single insulation measure — such as loft or cavity wall insulation — to eligible households. Both schemes are delivered by energy suppliers rather than directly by the government, which means you apply through your energy company or a registered managing agent rather than a government portal.
VAT Relief: A Saving That Applies to Most Homeowners
One benefit of the Warm Homes Plan era that applies broadly — not just to lower-income households — is the zero rate of VAT on qualifying energy-saving materials. Since April 2022, the installation of insulation, heat pumps, solar panels (both photovoltaic and thermal), wind turbines, micro-combined heat and power systems, and certain other measures in residential properties has attracted 0% VAT rather than the standard 20%. On a heat pump installation, the VAT saving alone is meaningful, and it scales with the size of the job. This relief runs until 2027 under current legislation, though the government has indicated it intends to maintain it in line with its clean energy commitments.
What Technologies Does the Plan Prioritise?
The Warm Homes Plan is technology-open in principle but heat-pump-led in practice. The government's modelling assumes heat pumps will be the dominant low-carbon heating technology in existing homes through to 2030, supplemented by heat networks in denser urban areas. Solar PV is treated as a complementary measure — particularly valuable when paired with a heat pump and battery storage — because it reduces the cost of running an electrified heating system. The plan explicitly models a typical household combining a heat pump, 4 kW of solar panels, and a 4 kWh battery as potentially saving around £550 per year on energy costs compared with a fossil fuel baseline, though actual savings depend heavily on your current tariff, household size, and usage patterns.
- Air source heat pumps: the most commonly installed low-carbon heating option in existing UK homes
- Ground source heat pumps: higher upfront cost but higher efficiency, particularly suited to rural properties with suitable land
- Solar PV: strongly encouraged as a paired measure to reduce the running cost of heat pumps
- Battery storage: amplifies solar savings and enables off-peak electricity use
- Insulation: treated as a prerequisite — improving your EPC rating before installing a heat pump typically reduces the system size needed and lowers running costs
The Role of the Smart Export Guarantee
Homeowners who install solar PV can also benefit from the Smart Export Guarantee (SEG), which requires licensed electricity suppliers with more than 150,000 customers to offer a tariff for the electricity you export back to the grid. Export rates vary by supplier and tariff — typically in a range from around 1p to 20p or more per kilowatt-hour at the time of writing — so it is worth comparing offers before signing up. The SEG does not provide an upfront grant; rather, it generates ongoing income from surplus generation, which contributes to the overall financial case for a solar installation. Combined with the Boiler Upgrade Scheme for your heating and 0% VAT on installation, the SEG means that a homeowner investing in solar and a heat pump today has access to a meaningful package of overlapping financial benefits.
How to Check Your Eligibility
The UK's grant landscape is layered — different schemes have different eligibility rules, different delivery routes, and different geographies — which can make it difficult to know where to start. A useful sequence is: first, obtain your property's current EPC rating (available free at the national EPC register); second, check whether you claim any of the qualifying benefits for ECO4 or the Warm Homes Local Grant; and third, contact your local authority to ask whether the Warm Homes: Local Grant is running in your area. If you are not eligible for means-tested support, the Boiler Upgrade Scheme remains the most accessible route to a significant grant contribution toward a heat pump.
Whatever route is relevant to your situation, the quality of your installer matters as much as the funding you receive. MCS certification is the industry standard for the installation of heat pumps, solar panels, battery storage, and biomass boilers in the UK — and for Boiler Upgrade Scheme vouchers, MCS certification is a legal requirement. Getting a no-obligation assessment from an MCS-certified installer through the Renovation Register is a practical, low-risk way to understand what improvements are appropriate for your home, which grants you can access, and what the realistic costs and savings look like before you commit to anything.
