Press release

Government boosts energy efficiency spending to £1.3 billion with extra funding for green homes

£300 million extra funding for green home upgrades to help lower income households cut emissions and save money on bills

  • £300 million extra funding for green home upgrades, bringing total spending on energy efficiency measures to £1.3 billion
  • new funding delivered through local authorities in England will help lower income households to cut emissions and save money on bills, helping country to build back greener
  • Green Homes Grant voucher scheme to close on 31 March 2021

£300 million of extra funding is to be invested to cut greenhouse gas emissions from the nation’s homes through energy efficiency and low carbon heating schemes.

The funding will focus on delivering energy saving upgrades and low carbon heating to homes through local authorities in England, meaning tens of thousands more low-income households will be able to be upgraded.

Following a review, the Green Homes Grant Voucher Scheme launched last year will close to new applications on 31 March at 5pm. The scheme was designed to provide a short-term economic boost while tackling our contribution to climate change. Applications made before the end of March deadline will be honoured and any vouchers already issued may be extended upon request.

Today’s announcement takes the total government funding for energy efficiency and low carbon heating in 2021/22 to over £1.3 billion, with the remainder of the funding having been pledged through the decarbonisation fund. This is up from the £1 billion announced in the Prime Minister’s Ten Point Plan and exceeds the Government’s manifesto commitment in these early years of the parliament.

Home upgrades can help households save over £300 a year on their energy bills. This announcement is part of the Government’s manifesto commitment to pledge over £9 billion to increase the energy efficiency of homes, schools and hospitals to work to build back greener, which will support around 58,000 jobs.

Business and Energy Secretary Kwasi Kwarteng said:

“Upgrading the country’s homes with energy efficiency measures means we can cut emissions and save people money on their energy bills.

“Today’s funding boost will mean even more households across England are able to access these vital grants through their local authority.

“This latest announcement takes our total energy efficiency spending to over £1.3 billion in the next financial year, giving installers the certainty they need to plan ahead, create new jobs and train the next generation of builders, plumbers and tradespeople.”

The original £500 million Green Homes Grant Local Authority Delivery Scheme is already helping around 50,000 households in England with an annual income of under £30,000 save hundreds of pounds each year on their energy bills by making their homes more energy efficient.

Through the extended scheme, tens of thousands more households on incomes of less than £30,000 will not have to make any financial contribution to energy efficiency improvements to their homes.

Delivered through the Green Homes Grant Local Authority Delivery Scheme and Social Housing Decarbonisation Fund Demonstrator, this will include green home improvements such as deep insulation, heat pumps and solar panels, helping cut over 70,000 tonnes of carbon from the atmosphere each year.

Through the Prime Minister’s Ten Point Plan for a Green Industrial Revolution and the Energy White Paper, the Government has set how it plans to decarbonise the nation’s buildings, including its aim to deploy 600,000 heat pumps a year by 2028, and to get as many homes as possible to Energy Performance Certificate Band C by 2035.

Decarbonising the country’s roughly 30 million buildings is essential if the UK is to meet its commitments to eliminating its contribution to climate change by 2050.

Notes to editors

  • All valid applications received through the Green Homes Grant Voucher Scheme up to 5pm on 31 March 2021 will be processed.

  • To date, more than 96,000 applications have been made through the Green Homes Grant Voucher Scheme and more than 39,000 vouchers have been issued. The government expects to issue vouchers worth a total value of £300 million by the time the scheme closes on 31 March 2021.

  • The over £1.3 billion of funding for green homes retrofit consists of existing, rolling forward and new funding being made available:

1. New Funding £300m To be announced today
2. GHG V/Net Zero Recycled Funding £100m Previously announced in Spending Review 2020
(3a) Previously announced SR20 Funding GHG V £220m Estimated spend for 2021/22
(3b) Previously announced SR20 Funding HUG £150m Already announced
(3c) Previously announced SR20 Funding SHDF Wave 1 £60m Already announced
4. Public Sector Decarbonisation Fund £453m Already announced
Total £1.3bn  
  • Further details of the Local Authority Delivery scheme extension will be announced later this year when it is formally launched for applications from Local Authorities.
  • The additional funding for the Social Housing Decarbonisation Fund, will build on the successful Demonstrator projects launched in 2020. Further details of how Local Authorities and Housing Associations can apply will be announced later this year.
  • In the recent Sustainable Warmth: Protecting Vulnerable Households in England strategy, the government committed £150 million through the Home Upgrade Grant (HUG) scheme to help low-income households in the worst-performing off-gas-grid homes in England become more energy efficient and cheaper to heat with low-carbon energy, contributing to both fuel poverty and net zero targets. Further information on how Local Authorities can access funding will be available this summer in advance of the Home Upgrade Grant scheme commencing delivery in early 2022.
Published 27 March 2021