Funding To Kick Start And Accelerate Domestic Energy Retrofit Projects

It is widely acknowledged that the world is facing a climate emergency. The UK was the first major economy in the world to legally commit to bring all greenhouse gas emissions to net zero by 2050. With homes accounting for around 15%[1] of the UK’s carbon emissions and with approximately 80% of the homes that we will be living in in 2050 having been built, strong policy and initiatives to support the decarbonisation of the UK’s housing stock has never been more important.

Equally important is the ability for a retrofitting market to provide a number of wider social and economic benefits such as tackling fuel poverty (especially given the increasing volatile times for energy costs), improving health and wellbeing and creating a green industry for jobs and skills within the UK.

The Government has recently announced a series of initiatives to fund domestic energy retrofit projects and we have set out a number of examples below. The market awaits further announcements on future waves of funding and the Government’s broader policy in light of COP 26 (the United Nations Summit hosted by the UK in November 2021 to agree how countries will deliver on their greenhouse gas reduction commitments) and the hotly anticipated Heat and Buildings Strategy also due this year (2021).

How can Bevan Brittan help?

Our energy team has market leading expertise in the domestic energy retrofit sector. We have advised Local Authorities, Regional Energy Hubs, Combined Authorities, Registered Providers, Contractors and Technology Companies on a range of projects from whole house (DEEP) retrofit projects to a range of tailored energy efficiency measures.

We provide solutions focused advice across all aspects of the project to ensure that this is successfully delivered including:

• Feasibility and business case planning
• Eligibility considerations and resident interface
• Financing strategy (including grant/loan applications and funding agreements)
• Public law and governance considerations (including compliance with subsidy control)
• Housing management regulation (including landlord and tenant considerations)
• Procurement strategy and advice on project delivery structure
• Property and planning considerations
• All project documentation (from co-ordination, design, construction, operation and guarantees)
• Innovative models including “heat as a service” or “comfort plan” models

With deadlines for some of these schemes fast approaching, it is important for potential applicants to check they meet the relevant eligibility criteria and prepare applications that fulfil the key objectives of the relevant scheme.

More information about the funding arrangements can be found below:   

Public Sector Decarbonisation Scheme: Phase 3 - GOV.UK

Phase 3 of the Public Sector Decarbonisation Scheme supports the Government’s net zero and clean growth goals. The priority is to provide public sector bodies funding for decarbonisation projects where the heating systems are at the end of their working lives and there is an imminent need for replacement, thus working towards delivering carbon emission reductions.

The total amount of funding available for Phase 3 will not be confirmed until after this year’s Spending Review, therefore, applications are submitted at the risk of the applicant. The application window will open at 2pm on 6 October 2021 and will be closed at 2pm on 3 November 2021.

Wave 1 of the Social Housing Decarbonisation Fund – GOV.UK

The Social Housing Decarbonisation Fund supports the Prime Minister’s 10 point plan for a green industrial revolution and makes further progress towards delivering the Government’s commitment to invest in the energy performance of homes. The fund will help deliver warm, energy-efficient homes, reduce carbon emissions, tackle fuel poverty, support green jobs, develop the retrofit sector and improve the comfort, health and well-being of social housing tenants.

The total amount of funding available is £160 million. Applications must be led by a local authority. If you are a private registered provider of social housing (including a housing association), you must apply as part of a consortium with a lead local authority in England. To apply, submit the completed application form and required attachments by 11:59pm on 15 October 2021.

Apply for the Sustainable Warmth competition – GOV.UK

The Sustainable Warmth Competition will award funding to Local Authorities to help them upgrade low-income households with energy efficiency installations and low carbon heating. All local authorities and Local Energy Hubs in England can apply for funding. The competition has two existing schemes:

The Home Upgrade Grant Phase 1 (HUG1)

£150 million has been committed to support low-income households by upgrading the most energy inefficient off gas grid homes. Targeted funding will support the installation of multiple measures in these homes, which can face higher upgrade costs, to substantially improve their energy performance.

Local Authority Delivery Phase 3 (LAD3)

£200 million of new funding is available for projects delivering upgrades to low-income households in the most energy inefficient homes that are on the gas grid. This is in addition to the £500 million already awarded via the LAD scheme which Bevan Brittan have also advised various clients on.

To apply, submit a completed application form by the 7 week extension from 23:59pm on 4 August 2021 to sustainable.warmth@beis.gov.uk.

If you would like to discuss any of the above schemes or would like to plan for future grant funding initiatives please get in touch with any member of our dedicated team of specialists, including Nathan Bradberry, Thomas Graham and Natalie Cernuschi.

[1]               Warmer, greener and cheaper homes as government opens a triple win upgrade for social housing - GOV.UK (www.gov.uk)