Government Funding Overview/History
The Government is committed to increase the adoption of low-carbon technologies as part of its Net Zero drive. It also aims to tackle fuel poverty & reduce energy bills.
Several key energy efficiency grants have been available across the UK in recent years including the, Great British Insulation Scheme (GBIS), Green Homes Grant & Energy, Boiler Upgrade Scheme (BUS) & Energy Company Obligation grants (ECO 1-4)
Issues with previous schemes
The legacy schemes have generated bad publicity with the Eco 4 scheme being the most widely known. Various investigations have found widespread botched installation (mainly for External Wall Insulation), contractor fraud and aggressive sales tactics.
These previous schemes were funded by levies on consumer energy bills and installations were done by Trust Mark accredited installers. However, even though these companies were accredited, many installations were substandard due to weak government oversight & issues with the accreditation system.
As mentioned, External Wall Insulation failure rates under the previous schemes were high. This was in part due to an under skilled workforce lacking the necessary expertise to complete these jobs to the required standard. Another reason was that the previous schemes generally focused on a ‘Fabric First’ approach which meant that insulation measures (such as improving the physical structure of your home, like the walls, roof, and floors) were prioritized before any heating system upgrades (such as heat pumps or boilers) were considered. As a result, many contractors aggressively pushed external wall insulation.
NEW SCHEME
The new Warm Homes Plan will replace the legacy schemes and rectifies this issue with a shift away from ‘Fabric First’. The new ‘Fabric Fifth’ approach prioritizes technology-driven, low-carbon solutions like heat pumps, rooftop solar PV, smart controls, and battery storage alongside basic draught-proofing, rather than forcing extensive structural insulation first.
The full details of this scheme have not yet been finalised
The government launched its plan for the Warm Homes Plan (WHP) in January 2026. The full details of this scheme have not yet been finalised and the grants under this plan are being rolled out in phases & the scheme is expected to be fully operation in 2027.
Once fully operational the plan will provide funding for Low-Income Homeowners & Private Tenants as well as funding upgrades to social housing. Additionally, there will be a push towards renewables for all households & the plan includes a universal offer that makes low- and zero-interest financing available for all homeowners wishing to install heat pumps, solar panels, and battery storage
The previous schemes were managed by energy companies (and levies through energy bills) whereas the new scheme is funded by general taxation and will be delivered by local authorities (who will only work with a handful or trusted installers).