While the plan is framed around cutting household energy bills and carbon emissions, it also signals important changes for the wider domestic heating market – including off‑grid and oil‑heated homes.
Key points at a glance
- £15bn of funding to 2030 to upgrade up to five million homes and reduce fuel poverty.
- Strong policy focus on electrification, with heat pumps, solar PV and batteries prioritised.
- £5bn fully funded support for low‑income households; additional grants and low‑interest loans for others.
- Heat pump target of 450,000 installations a year by 2030, lower than earlier ambitions.
- Tougher standards for rented homes from 2030, assessed under a new Home Energy model.
- No firm phase‑out date for fossil fuel boilers, and limited detail on pathways for off‑grid oil‑heated homes.
- Implications for fuel distributors remain uncertain, particularly in rural and hard‑to‑treat properties.
What is the Warm Homes Plan?
The Warm Homes Plan brings together a range of grants, loans and regulatory measures aimed at improving the energy performance of existing homes and accelerating the transition to low‑carbon heating. It replaces the Energy Company Obligation (ECO) and consolidates support for insulation, heat pumps, solar panels and battery storage under a single programme.
The government says the plan could help up to one million households out of fuel poverty by 2030, while also supporting the UK’s legally binding climate targets.
Key funding commitments
The headline commitment is £15bn of funding across the current parliament. In England, this includes:
- £5bn for low‑income households, designed to fully fund packages of home upgrades such as insulation, solar PV, batteries and heat pumps.
- £2.7bn to expand heat pump grants, offering £7,500 per installation, with air‑to‑air heat pumps included for the first time.
- £2bn for low‑ and zero‑interest loans, intended to remove upfront cost barriers for households investing in measures such as heat pumps, solar panels and batteries.
- £2.7bn for innovative finance, including green mortgages linked to improved home energy performance.
- £1.1bn for heat networks, particularly in urban and multi‑occupancy buildings.
Separate funding will be allocated to devolved administrations in Scotland, Wales and Northern Ireland, which will determine how their share is delivered.
New standards for rented homes
Alongside funding, the plan introduces tougher minimum energy efficiency standards for rented properties. From 2030, private and social landlords will be expected to meet higher performance thresholds, broadly aligned with EPC band C. Compliance will be assessed using a new Home Energy Model, replacing the current EPC methodology.
Future EPCs will be based on multiple metrics, including energy bills, heating demand and carbon emissions. While exemptions and spending caps are expected for hard‑to‑treat properties, the reforms are likely to encourage wider adoption of low‑carbon heating technologies in the rental sector.
Heat pumps and the future of heating
Heat pumps sit at the centre of the Warm Homes Plan. The government’s target is for around 450,000 heat pumps a year to be installed by 2030, including both new‑build and existing homes. However, the plan does not set a firm end date for fossil fuel boiler sales and acknowledges the challenges of scaling up installations, particularly in older and harder‑to‑treat properties.
Hydrogen is mentioned only cautiously, with the government stating it is not yet a proven option for widespread domestic heating.
What does this mean for the liquid fuel industry?
The Warm Homes Plan reinforces the direction of travel towards electrification, while leaving open questions about how off‑grid and oil‑heated homes will be supported through the transition. Many rural properties face practical and financial barriers to switching to electric heating, and the plan offers limited detail on transitional or alternative solutions.
As funding schemes, standards and assessment methods are developed over the coming years, their impact on off‑grid households and liquid fuel demand will become clearer.
Industry response
Welcoming the publication of the Warm Homes Plan, Paul Rose, CEO of OFTEC, and Ken Cronin, CEO of UKIFDA, commented: “We share the government’s ambition to deliver affordable, low carbon heating solutions to reduce both energy bills and carbon emissions for homes and businesses.
“Our focus remains on the off-grid sector where we continue to work positively with policymakers. The government recognises that there are challenges for these harder to treat properties, particularly upfront cost, and that alternative solutions may be needed.
“We are pleased the government is exploring a renewable liquid fuel solution as part of its Alternative Clean Heating consultation which closes next month. These fuels provide a low cost transition, and immediate carbon reduction, for properties that may struggle with other technologies.
“This isn’t just our view. In the past few weeks we’ve seen nearly 5,000 oil heated households, from Cornwall, Wales to Scotland, respond to this consultation in support of renewable liquid fuels. There is a clear appetite for this approach. Even today, dozens of oil heating users in the village of Kehelland in Cornwall are driving up to London to meet with policymakers to share their experience of using renewable liquid fuels.
“We are fully aligned with the government’s ambition that no household is left behind. That’s why we stand ready to help bolster the Warm Homes Plan to ensure it delivers a fair and inclusive transition for all homes and businesses.”
A more detailed analysis of the Warm Homes Plan and its implications for the fuel distribution sector will appear in the February issue of Fuel Oil News.
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