At the end of September 2022, the UK government announced additional funding for Phase 2 of the Home Upgrade Grant (HUG) scheme. Worth up to £700 million, it will
operate in tandem with the previously announced Social Housing Decarbonisation Fund (SHDF) Wave 2 funding, which will have a value of up to £800 million. The total of available energy efficiency funding has therefore now been raised to £1.5 billion.
Through the funding, government intends to help around 130,000 English households to reduce their energy bills through the installation of energy efficiency measures. Taking a fabric-first approach, the supported schemes will put an emphasis on measures such as loft and wall insulation, replacement glazing and doors.
Installations of heat pumps and solar panels will also be eligible, though the priority is to make buildings themselves thermally efficient. Multiple-measure projects will be encouraged in order to achieve economies of scale and to improve overall energy efficiency.
The HUG scheme will operate between 2023 and 2025, and will build on the £218 million spent in Phase 1. It will be specifically targeted at low-income households and energy inefficient homes that are not connected to the gas supply grid. Funded works should seek to raise such homes to a minimum Energy Efficiency Rating of band D by 2025, and to band C by 2030.
Wave 2 of the SHDF will also begin in 2023. The resulting works are expected to improve properties to a minimum rating of band C, and to yield average annual savings of £400 per household at current prices. Local authorities, combined authorities and registered providers of social housing can apply for the funding directly.
The Home Upgrade Hub website offers guidance for local authorities that are considering submitting a bid under HUG. Backed by the Department for Business, Energy & Industrial Strategy (BEIS), it notes that to stand the best chance of securing funding, applicants are strongly encouraged to submit applications in the first assessment round. The deadlines for the two rounds are 18 November 2022 and 27 January 2023 respectively.
