England's Energy Efficiency Policies

Energy Company Obligation (ECO)

Introduced in 2013, ECO is an obligation on larger energy suppliers to supply fuel poor consumers across Great Britain with energy efficiency and heating measures – with the next phase, ECO4 (2022 to 2026), valued at £1 billion per year. ECO4 will target the poorest performing homes in Bands D, E, F and G and there will be a clear move towards a multiple measure approach. Proposals indicate that there will be a focus on hard-to-treat properties, including those with solid walls. The Solid Wall Minimum Requirement has increased to 22,000 under ECO4.

Home Upgrade Grant (HUG)

The £150 million HUG fund will provide funding for energy efficiency and low-carbon heating measures to vulnerable households and low-income families living in the poorest quality off-gas-grid homes (EPC band D-G) in England. Similarly to ECO, HUG aims to substantially improve the performance of these homes, making strides towards the 2030 FPEER C target – aided by a further £950 million investment over 2022/23 to 2024/25. The first phase of HUG is being delivered by Local Authorities via the Sustainable Warmth Competition.

Local Authority Delivery Scheme (LAD)

Supporting low-income households in England, the £500 million LAD scheme will benefit eligible households with energy efficiency and low-carbon heating improvements with up to £10,000. The third phase, LAD3, will now provide £200 million to new projects delivering low-income households in the most inefficient on-gas-grid homes with low-carbon heating improvement. As with phase 1 of HUG, the third phase of LAD is being delivered via the Sustainable Warmth Competition.

Social Housing Decarbonisation Fund (SHDF)

With wave 1 (2021 to 2023) providing £160 million total funding and a further £800 million investment to be made over 2022/23 to 2024/24, SHDF is an energy performance delivery scheme that will upgrade social housing stock with energy efficiency and low carbon heating measures and uplift their EPC ratings to band C or above.

Decent Homes Standard (DHS) Review

In place since 2000, the DHS’s purpose has been to ensure all housing stock meets a set of criteria detailing the sufficiency of a property’s infrastructure across a range of areas including facilities and comforts and its ability to provide a reasonable level of thermal comfort.

The Department for Levelling up, Housing and Communities (DLUHC) has committed to reviewing the DHS in a recent Social Housing White Paper. DLUHC will consider how the standard can support better energy efficiency and social housing decarbonisation measures and explore opportunities to improve the energy performance of owner-occupied homes.

Green Homes Grant (GHG)

The GHG voucher scheme has supported the installation of energy efficiency and low-carbon heating solutions for owner-occupiers, park homeowners, and landlords across England and Wales. It provided up to two thirds the cost of an installation, up to the cost of £5,000, and the entire cost of an installation up to £10,000 for low-income households. Whilst the GHG was welcomed by the industry, flaws in the delivery of the scheme led to its closure to new applications in March 2021. This has left a policy gap in terms of support for energy efficiency improvements for owner-occupied households.

Energy Savings Opportunity Scheme (ESOS)

The ESOS program is a mandatory assessment program aimed at large UK businesses and requires auditing of total energy consumption and subsequent energy efficiency opportunities every four years. Practicable and cost-effective energy efficiency measures, like building fabric, lighting, and heating, are disseminated from the scheme, aiding in reducing energy wastage from inefficient infrastructure or processes.

EPC Targets

The Government has several statutory and non-statutory targets to improve the energy performance of homes across England. Key targets include:

  • A statutory target to improve as many English fuel poor homes as practicable to a minimum EPC of band C by 2030, with interim targets for EPC E by 2020 and EPC D by 2025.
  • A target to upgrade as many homes in England as possible to EPC band C by 2035, with a target for privately rented homes to be upgraded by 2030.

Linked to the above targets, the Government has proposed policies to support improvements to improve the EPC rating of PRS and owner-occupied homes.

PRS Regulations

  • From 2020 all privately rented homes in England and Wales must have a minimum EPC rating of band E.
  • Under government proposals, new tenancies will be required to meet a minimum band C from 2025, with the requirement extended to all tenancies in 2028.
  • The Government has proposed a requirement for all privately rented non-domestic buildings to meet EPC band B as a minimum by 2030, where cost-effective.

Improving Home Energy Performance Through Lenders

The Government is considering the introduction of a requirement on lenders to disclose the average energy performance of their property portfolios, with the potential for the introduction of a target-based approach to encourage improvements. This is part of a shift to encourage the growth of green finance products to support energy performance improvements.

Building Regulations


Future Homes Standard (FHS)

The FHS was proposed by Government in 2019 and will require new build homes to be zero carbon andfuture-proofed with low carbon heating and world-leading levels of energy efficiency. To support the delivery of the FHS in 2025, an interim uplift will be introduced in June 2022 that will see a 31% reduction in CO2 emissions compared to current standards.

Future Buildings Standard (FBS)

Building on the FHS, the FBS is a realisation pathway for highly efficient non-domestic buildings which are zero carbon and future-proofed with low carbon technology. An interim uplift to non-domestic buildings is intended to deliver a 27% carbon saving effect on existing standards and this will be followed by the full t FBS which will come into effect from 2025 onwards.