The government has launched a £1.5bn funding tranche for local authorities and social housing landlords to introduce energy efficiency measures in up to 130,000 homes. The move comes as local authorities warned that poorly insulated homes will leak £12.7bn of energy during the next two years, with a third of that bill incurred by the government.
The £1.5bn will be available through the Home Upgrade Grant (HUG), which is releasing up to the £700m originally announced in February. The remaining £800m will be allocated under the Social Housing Decarbonisation Fund.
Under HUG, which is targeted at people who are most at risk of poor health due to poorly heated homes, local authorities invite households to book in to replace their heating systems, as well as install wall and roof insulation. To apply for HUG, homes should not be connected to the gas grid and should have an EPC rating of D or lower.
The Social Housing Decarbonisation Fund is aimed at social housing landlords who are looking to raise properties to EPC band C or higher. Funding can be used to fit insulation, replace windows and install heat pumps and solar panels. Landlords are required to match the funding provided under the scheme.
Meanwhile, the Local Government Association (LGA) is warning that badly insulated homes are likely to cost families £8.6bn in wasted energy during the next two years, with the remaining £4.1bn paid by the government under the Energy Price Guarantee. Homes with an EPC rating of D or lower will see an average of £488 of heat per year escape through poorly insulated doors, windows, roofs and walls.
While families in inefficient homes will lose a total of £8.6bn in energy waste during the two-year scheme, the costs incurred by the government under its intervention could increase if energy prices rise as projected next year.
The LGA says the most wasteful homes in England are older and more likely to be occupied by the aged and people on lower incomes; more than 60% of the over 65s live in the least energy efficient homes. Owner-occupied and private rented homes are almost twice as likely to be rated EPC D or below than social homes.
The LGA is calling for the government to renew its partnership with councils to redouble efforts to improve draughtproofing, insulate and retrofit all homes, and accelerate the shift to renewable energy, as well as give residents energy saving advice.
“Investment now will save households and taxpayers money further down the line, ease the cost-of-living crisis, reduce health crisis for people in cold and damp homes, and mean families have added security and flexibility within their budgets,” said the LGA’s environment spokesperson David Renard. “Alongside a transition to renewable energy, a retrofit renaissance could be the centrepiece of renewed efforts to drive economic growth, create more jobs and increase productivity, and deliver net-zero to protect our environment now and for the future.”
