The Warm Homes Plan 2026
- cnasir9
- Jan 29
- 6 min read
Ambition without the basics?
The Warm Homes Plan 2026 is billed as the UK government's most ambitious housing retrofit programme to date. With £15 billion pledged to cut energy bills, tackle fuel poverty and upgrade five million homes by 2030, the intent is hard to fault. Here, Lily Regardsoe probes deeper.
A winter of extremes
This winter (2025-2026) has been brutal across much of the Northern Hemisphere.
Millions lost power in the United States as a winter storm swept across two-thirds of the country from Canada—the coldest spell in decades. In Ukraine, communities face another winter with bombed heating and electricity systems, a weaponisation of cold itself. Here in the UK, those living in substandard homes might seem fortunate by comparison. But cold is cold, and a home that cannot keep the cold out is not truly a home.
Which is why the UK government's Warm Homes Plan—a £15 billion commitment to upgrade five million homes by 2030—deserves recognition. It's an asserted effort to tackle fuel poverty and transform our leaky, inefficient housing stock.
The scale is welcome.
The intent is hard to fault.
New research from the UK Energy Research Centre's Review of Energy Policy—an annual compendium bringing research findings to bear on UK energy policy—shows that electricity bill rises between 2021 and 2025 for a typical household weren't driven by the increasing cost of electricity generation, but by the high cost of keeping standby gas to supplement intermittent renewable electricity. The Warm Homes plan aims to address this cost by enhancing energy security through locally generated renewable energy and improved efficiency.
But will ambition alone keep homes warm? Beneath the promising headlines lies a familiar question: are we learning from past mistakes, or are we about to repeat them?
Improvements in heating and reductions in heating costs are desperately needed. Under the Decent Homes Standard, a dwelling must provide a reasonable degree of thermal comfort to be considered decent.
Yet in 2023, 3.8 million dwellings (15%) failed the Decent Homes Standard. Behind the scale and optimism sits a familiar problem, and a resounding question needs to be asked:
Does the new Warm Homes Plan prioritise technology over fundamentals, risking a repeat of past policy failures?
At its core, the plan encourages households to remove gas boilers and install air-source heat pumps, solar PV and batteries.
Technology first, fundamentals second
Yet basic sums reveal, even with grants, this remains prohibitively expensive for most. While low-income families can receive free home upgrades, non-low-income households face typical setup costs around £15,000 even after the boiler upgrade scheme refund, delivering bill savings of roughly £500 a year.
Payback periods could extend to decades, longer than the lifespan of much of the technology and longer than most households can realistically plan for.
The Warm Homes Plan is full of ambition and there's a lot to like, but you can't build a national retrofit strategy on wishful thinking and we need to bring customers on that journey without discriminating against certain groups.
Retail energy expert, former CEO of So Energy and ESB
The complexity of managing these systems correctly may mean public uptake falls well short of government targets.
The insulation gap
The bigger problem with the scheme is the expansion of the Boiler Upgrade Scheme and a new Warm Homes Agency may simplify installations, but they don't address a more basic flaw: insulation has been sidelined.
According to the English Housing Survey in 2024, 9% of homes still have the lowest energy efficiency rating (bands E to G).
Whilst 89% of homes now have double glazing, only 53% of dwellings have cavity or solid wall insulation and only 40% of dwellings have loft insulation (over 200mm thickness). Heat pumps work well in insulated homes. In leaky, poorly performing buildings, they are expensive to install and, because the home is so poorly insulated, inefficient to operate, potentially increasing energy bills. In some cases, electrical circuit upgrades alone can push costs to £25,000 or more.
Without first reducing heat loss, clean heating risks becoming a luxury rather than a solution, particularly for lower-income households, who may face higher running costs and deeper energy poverty. Whilst deploying these technologies could deliver significant savings for the average customer, these savings will be missed if we skip the first step of upgrading poorly performing buildings.
A pattern we've seen before
This shift away from insulation also threatens the wider retrofit ecosystem. The UK has been here before. In 2012-2013, abrupt policy changes resulted in the loss of approximately 10,000 insulation jobs. Skilled workers left the sector, and when insulation was needed again, the capacity was gone. The Warm Homes Plan risks repeating this mistake by prioritising the least effective, most expensive energy-saving measure we have.
Written from a retail perspective
There's also a sense that the plan is written from an energy retail perspective. Electricity prices in the UK remain far higher than gas - often around four times more per kWh - not primarily because of policy levies, but because of how power is generated and backed up. While renewable energy is far cheaper to produce, its intermittency requires costly standby generation and storage, which drives up prices.
In the price breakdown, standby gas is what makes electricity so expensive. At the same time, competitive government auctions have driven wind prices to levels comparable to those of gas and nuclear, undermining claims of cheap power. By encouraging flexible assets such as heat pumps, batteries and EVs, suppliers stand to benefit from shifting demand throughout the day, even as households absorb the upfront costs.
Who benefits—and who doesn't
To its credit, the £5 billion earmarked for free upgrades for low-income households (households with an income of £36,000 or less) is genuinely positive. In some cases, these households can apply for loft insulation grants, but most won't be eligible if they are not low-income, not on qualifying benefits, or not in a qualifying postcode.
Whilst renters may apply if they meet the low-income and low EPC rating requirements, the landlord will have the final say on whether improvements are made. Meanwhile, social housing tenants aren't eligible for the grant. Without proper sequencing - measuring thermal performance first, insulating second, and only then installing clean heat- the promised benefits may never materialise.
Walk before you run
If the Warm Homes Plan is to succeed, it needs to refocus on the basics. Walk before you run. Insulation isn't glamorous, but it's the foundation of affordable, low-carbon heating. Without it, the plan risks becoming a costly exercise in installing the right technology in the wrong homes.
Monica Collings OBE concludes,
We've been here before: big promises, shiny technologies and a complete blind spot for the basics. Heat pumps, solar and batteries all have a role to play, but customers need choices, and installing them in cold, leaky homes is like pouring money into a sieve... and the UK has the leakiest housing stock in Europe. Insulation isn't optional; it's the foundation.
Skip it, and you turn clean heat into an expensive hobby for the few, not a solution for the many. If the government wants this plan to succeed, it needs to look at energy efficiency alongside energy demand reduction - the two things sit hand in hand.
Otherwise, we'll repeat the same cycle: inflated expectations, low public uptake and another exodus of skilled workers from a sector that desperately needs stability. I think the ambition is welcome. But without the basics in place, it's just another glossy policy destined to underdeliver.
The Warm Homes Plan represents significant progress. Compared with many countries, the UK is taking bold steps to scale up the rollout of green energy to households. The £15 billion commitment, the focus on fuel poverty and the ambition to transform five million homes by 2030 all deserve recognition.
But progress isn't just about scale—it's about sequence. The questions raised here are intended to help make this work. If we're going to invest billions in transforming how Britain heats its homes, we need to ensure that investment delivers lasting comfort, genuine savings and real progress toward net zero.
Source
Lily Regardsoe is the host of Green Executives' Renewables Report, where she brings together sector leaders to share strategies, innovations and real-world solutions that are shaping a smoother path to net zero.
