Home Upgrade Grant: Phase 2

The Home Upgrade Grant (HUG) will provide energy efficiency upgrades and low carbon heating via local authority funding, to households in England that:

• are low income
• are off the gas grid
• have an an Energy Performance Certificate (EPC) between D and G

Up to £700 million of funding will be made available to local authorities to help them deliver HUG 2 until March 2025. Funding will be released to successful local authorities in the financial years 2023 to 2024 and 2024 to 2025.

Local authorities are delivering the first phase of the Home Upgrade Grant as part of the sustainable warmth competition until March 2023.

How it works

Local authorities apply for the funding.

If successful they will use the funding to install energy efficiency measures and low carbon heating to eligible homes in their area. Measures could include for example home insulation with an air source heat pump if suitable. Upgrades should be tailored to individual homes so that the most appropriate measures are installed.

Homeowners on a low income do not contribute to the cost of upgrades.

For those renting their home:

• private landlords must contribute at least a third of the total cost of the upgrade
• social landlords must contribute at least half of the total cost

All upgrades need to be within the relevant cost caps to be eligible.

How to apply

Local authorities should apply for HUG 2 by the deadline: 27 January 2023.

BEIS will assess applications at 2 deadlines:

• 18 November 2022
• 27 January 2023

There are 3 stages during the application process.

Outline application stage

Local authorities will be asked about:

• the size of their project
• commercial and delivery assurance
• how they plan to target and verify low income households

Delivery assurance check

Local authorities will be asked to provide evidence on their resourcing and procurement progress to show they have contractors in place to begin delivery and can also revise project delivery forecasts and project plans.

Batch application stage

Local authorities will be asked to submit:

• housing stock data on homes surveyed
• the mix of energy efficiency measures and clean heat measures they intend to install
• the upgrade costs for the batch of homes, including the cost of measures to be installed

This final step is repeated throughout the delivery window, with funding released in batches subject to need.

Local authorities that submit applications to the earliest assessment round will benefit from several extra months for project mobilisation. BEIS will work with those authorities to facilitate early delivery, including funding for mobilisation in the latter part of this financial year, February and March 2023, where possible.

Early applicants will also benefit from opportunities to revise their applications and resubmit to a later assessment round if initially unsuccessful.

We cannot guarantee that funding will still be available for the second application deadline, it may all have been allocated in earlier rounds, so we encourage local authorities to apply to the first assessment round if possible.

Next steps

We have published the full competition guidance and application form. We will publish a draft memorandum of understanding (MOU) in October 2022, and clarification questions to help local authorities prepare and finalise their applications.

Contact us

If you have any enquiries about the Home Upgrade Grant, please email HUG.project@beis.gov.uk.

Background

The 2021 fuel poverty strategy sets out the government’s plan to improve the energy efficiency in people’s homes and reducing energy bills for fuel poor households.

The Heat and buildings strategy announced £950 million to be allocated to the home upgrade grant from April 2022 to March 2025.