21 January 2026
|
Families across the country will see lower energy bills as a result of the government’s comprehensive plan to upgrade the nation’s homes.
The government has announced the ‘Warm Homes Plan’ will deliver £15 billion of public investment, roll out upgrades to up to 5 million homes that could save them hundreds on energy bills and help to lift up to a million families out of fuel poverty by 2030.
Upgrading homes is one of the best ways to bring down bills for good, and this plan is a vital next step in addressing the long-term issue of energy affordability for the country. Home insulation installations fell by more than 90% between 2010 and 2024, and millions of households have paid higher energy bills as a result.
The British people are currently showing record demand for home clean energy products like solar panels and heat pumps. The cost of these products continues to fall, but they are still out of reach for too many - and this plan will help bring these costs down so working people can benefit.
The ’Warm Homes Plan’ targets help at low-income families, alongside a universal offer, to ensure that working families can feel the benefits of products that can cut their bills.
Alongside this, the plan will support consumer choice for all households, so people can choose the technologies that work for them as and when they want. Homeowners will be able to apply for government-backed, low and zero interest loans to install solar panels - unleashing a “rooftop revolution”.
These loans will also be available for batteries and heat pumps, making it easier than ever for every home to access clean energy technologies that can lower bills. Low-income households and those in fuel poverty could receive support that would cover the full cost of having solar panels put on their rooftop, or insulation installed, alongside new rules to ensure landlords invest in upgrades to cut bills for renters and social tenants.
The 3 pillars of the programme are:
Direct support for low-income families:
- Low-income households will receive free of charge packages of upgrades, depending on what technologies are most suitable for their homes- backed by £5 billion of public investment
- For example, families could receive fully funded installations of solar panels and a battery, to the full average cost (currently £9,000-£12,000)
- For social housing residents, this could mean upgrades to entire streets at the same time, lowering bills and improving warmth and comfort for whole neighbourhoods
An offer for everyone:
- The government-backed, zero and low interest loans programme to get solar panels onto the nation’s rooftops and new rules that mean every new home will come with solar panels by default
- This plan will triple the number of homes with solar panels on their rooftops by 2030
- Making it easier for anyone who wants to get a heat pump, with a £7,500 universal grant for heat pumps, and the first ever offer for ‘air-to-air heat pumps’ that can also cool homes in the summer
Talking about the announcement Russell Dean, Deputy Divisional Manager at Mitsubishi Electric, said: “We are pleased to see the Warm Homes Plan outlined today, as this level of support to make renewable heating options more affordable and accessible has been long called for. The plan to offer interest-free loans for heat pumps is a welcome step to further reduce upfront costs, and the continuation of the Boiler Upgrade Scheme shows that the government is serious about making heat pumps a realistic option for more of us.
“We know that these measures will be welcomed by homeowners – our own research found that 69% of homeowners in the UK agree that more funding should be made available for this type of switch. However, the disproportionate cost of electricity still remains a roadblock for the uptake of renewable heating in the UK. Reducing the price of electricity versus the volatility of gas and oil prices will be key to bringing down electricity prices and making heat pumps more affordable to.
“We also welcome the government’s aim to ensure that at least 70% of heat pumps installed in the UK are made here.
“As the UK’s largest manufacturer of heat pumps, we support this aim and we are doing everything we can to unblock householders’ adoption of heat pumps. There needs to be growth in the market. The publication of the long-awaited Future Homes Standard will give impetus and drive momentum to grow the market to reach that 70% target and the installation of 450,000 heat pumps per annum.
“Whilst the plan offers much for households and domestic properties, support for businesses and commercial buildings remains extremely limited. The commercial sector continues to be held back by little to no governmental, regulatory, or legislative incentive to decarbonise. The lack of commercial focus signifies a missed opportunity to tackle the UK’s circa 2 million non-domestic buildings, and any genuinely transformative action plan must address this."
Tom Pakenham, Director at Hive, said: “Warm, energy-efficient homes cut bills and reduce carbon, so it’s right that the Warm Homes Plan puts upgrades front and centre. We know eco-tech works - early adopters are already seeing the benefits and our customers are saving both money and energy with more than half a billion pounds saved thanks to Hive’s market-leading smart thermostat. But the switch has to make financial sense and more grants and accessible support for low-carbon upgrades will help remove the upfront barrier and make sustainable living more affordable for homeowners across the UK.”
“From smart thermostats to flexible finance and grants to solar subscriptions, there are more ways to get started, and more technologies available than many realise. At Hive, we want everyone to know their power, to cut bills today and build the greener energy future we all need.”
Garry Felgate, CEO of The MCS Foundation, said: “The ‘Warm Homes Plan’ reaffirms the government’s commitment to clean heat and energy, and the additional funding to help more households access affordable energy in their homes is extremely welcome.
“MCS data shows that more households than ever are installing renewable energy systems, with 2025 yet another record year for heat pumps, batteries, and solar panels. Government grants and incentives have played a significant role in boosting this growth, and the introduction of government-backed low-interest loans will provide further momentum by reducing upfront costs for more households. It will also serve to accelerate progress towards installing the 1.5 million heat pumps a year by 2035 that we need to meet climate targets.
“All households can gain financial savings from renewable energy, and the support for low-income households is especially welcome. Tackling fuel poverty and increasing the uptake of renewables go hand-in-hand, and today’s ‘Warm Homes Plan’ shows that the government recognises this.”
Charlotte Lee, Chief Executive of the Heat Pump Association UK, said: “Today’s publication, and the funding confirmed to deliver the ‘Warm Homes Plan’, send a strong signal to both industry and consumers that the shift to clean, electrified heat remains important for this government. Heat pumps are a proven, scalable solution that can lower energy bills, improve comfort, and reduce carbon emissions for homes and buildings across the UK. We will continue to work with government and industry partners to support the sector and translate this plan into real progress on the ground.”
"The launch of the Warm Homes Plan is potentially a key moment for energy affordability across Britain and underlines this Government’s commitment to cleaner energy,” says Neil Sawers, Commercial Technical Manager at Grant UK.
“The Plan’s three-pillar approach is welcome; direct support for low-income families, an offer of universal access to clean energy financing and meaningful protections for renters. Heat pumps are central to the new Warm Homes Plan and we are pleased about the continued focus on this proven and clean home heating solution.
“We will continue to work with industry as the Plan develops and we look forward to seeing the new Warm Homes Agency, which will be key to the Plan’s successful delivery, take shape.”
Country Land and Business Association (CLA)'s President Gavin Lane said: “Rural landlords are committed to improving the energy efficiency of the UK’s housing stock, and we are pleased that a number of CLA proposals have been adopted to help meet this ambition.
“This announcement provides certainty and reassurance, particularly to those who are already making upgrades that they will not be penalised in future for taking early action.
“Adopting a single implementation date of 2030 recognises that the sector needs time to prepare, and we welcome the chance to engage further on the needs of the rural and heritage sector.”
Responding EUA Chief Executive Mike Foster said: “New, highly insulated homes provide the ideal environment for modern low‑carbon technologies such as heat pumps and heat networks. As the government advances its ambitious housebuilding programme, we expect to see significant growth in heat pump installations in new‑build properties.
“Our experience of more than a decade of subsidising heat pumps in existing homes shows that uptake is likely to remain limited until installation becomes more affordable and running costs decrease.
“Where we see real potential for lowering energy bills and cutting carbon emissions is in hybrid heating technologies. Aligning solutions with the realities of the UK’s diverse housing stock is the most pragmatic path forward. Hybrid systems also support the transition to a future decarbonised gas network, helping the UK meet its clean power goals in a way that remains affordable for households.”
Daikin’s Head of Residential Products, Hamid Salimi, said: “The Warm Homes Plan will accelerate progress towards net zero. It will make it cheaper to install and run low carbon heating, making heat pumps even more attractive, particularly when they are paired with solar PV and battery technologies. The ability to apply for a low or zero interest loan on-top of the Boiler Upgrade Scheme (BUS) grant is particularly welcome, as it will encourage more householders to invest in this technology. As hotter climate conditions become an increasing issue in the UK, we welcome BUS funding being extended to air-to-air heat pumps that can cool as well as heat homes.
"We also welcome the plan’s fully funded upgrades for low income households, helping ensure the shift to cleaner heating is fair and accessible for all.
“We would, however, urge the government to take early and decisive steps to reduce the price of electricity. This remains a barrier to the electrification of domestic, commercial and industrial heating.”
Paul Smith, Managing Director, NIBE Energy Systems Limited said: “The Warm Homes Plan provides much-needed clarity and long-term direction for the acceleration of heat pumps in UK homes, backed by record public investment. It sends a strong signal that clean heating is central to the future of housing in Britain.
“Crucially, the plan places a clear emphasis on upgrading homes, cutting energy bills and helping lift households out of fuel poverty. That focus on affordability and comfort is vital in ensuring the transition to clean heating delivers real, everyday benefits for the people who need them most.
“We, at NIBE, particularly welcome the ambition to scale heat pump deployment and improve the quality of the UK’s housing stock, giving homeowners and landlords greater certainty, better support and a clearer pathway to warmer homes and lower running costs.
“The continued expansion of the Boiler Upgrade Scheme (BUS), alongside new zero- and low-interest finance, is an important step in making the upfront cost of installation less prohibitive and opening clean heating to many more households. Increased funding will also support the adoption of a broader range of heat pump technologies, helping ensure different homes can access the right solutions.
“For the industry, this plan underlines the importance of capability, quality and readiness at scale. Delivering hundreds of thousands of installations each year will require proven technology, strong manufacturing, and well-supported installer networks to ensure systems perform as intended. At NIBE, we see this as a pivotal moment for the sector and are committed to supporting the delivery of high-quality heat pump solutions that provide long-term comfort, reliability and value for UK households.”
“I do hope you can use Paul's comments in any relevant articles you are writing around policy and this pivotal new plan for the future of clean heating. Happy to organise some time to chat with Paul also if you would like.”
Henrik Hansen, Managing Director of Vaillant UK and Ireland, commenting on the announcement said: “Vaillant welcomes the £15 billion Warm Homes Plan as an important step forward, providing long‑term certainty for the market and a clear signal on the UK’s transition to low‑carbon heating.
“The ambition for 70% of heat pumps sold in the UK to be manufactured domestically, alongside continued support through the Boiler Upgrade Scheme and further investment in installer skills via the Heat Training Grant, gives industry the confidence to plan, invest and scale with purpose. This rounded approach, including investment in the broader supply chain, from manufacturing to installation, not only strengthens the domestic manufacturing base but also fosters a robust ecosystem for skilled jobs and growth.
“Together, we can deliver the UK’s clean heating ambition but achieving this requires a strong and sustained collaboration between Government and industry. There are many consultations still to come, and we look forward to seeing the full detail take shape.”
To read the story in full visit: www.gov.uk/government/news/families-to-save-in-biggest-home-upgrade-plan-in-british-history
