• The UK government’s Warm Homes Plan will upgrade up to 300,000 homes in 2025, lowering energy bills.
  • A £3.2 billion investment will fund heat pumps, insulation, and low-carbon heating, with grants for homeowners.
  • The plan will lift 1 million households out of fuel poverty, create clean energy jobs, and boost manufacturing.

The UK government introduces the Warm Homes Plan, helping thousands of households embrace green heating in 2025

Much of the UK was surprised by the first snow of the year just this week. Now, the UK government is enacting a major plan to cut energy bills and make homes warmer and more efficient. The Warm Homes Plan is going to upgrade up to 300,000 homes in 2025. This will include all types of homes, from private houses to social housing and rented properties. The goal is to reduce energy bills, tackle fuel poverty, and support the environment. This news comes just weeks after the UK’s heat pump industry called on the government for action.

A key part of the plan is expanding the Boiler Upgrade Scheme. The government will increase the budget to help more homeowners switch to heat pumps, which are more energy-efficient than traditional boilers. Homeowners in England and Wales can get a £7,500 grant for installation. There will also be simplified planning rules, making it easier to install heat pumps in England.

In addition to heat pumps, the government will provide energy-efficient upgrades like insulation and low-carbon heating. This will help low-income households, social housing residents, and renters. The government is investing £3.2 billion to support these efforts in 2025-2026.

Charlotte Lee, Chief Executive of the Heat Pump Association, celebrated the announcement:

“The package of measures announced by the Government today demonstrates their commitment to accelerating the decarbonisation of heat in the UK.

We welcome the clarity provided on the long-anticipated Clean Heat Market Mechanism and the confirmation of additional funds for the BUS, both of which enable the sector to invest with confidence. The changes to the Permitted Development Rights will help to streamline the heat pump installation process for installers and consumers and support an accelerated deployment of heat pumps over the coming years.”

A spokesperson for the Ground Source Heat Pump Association (GSHPA), shared the support:

“Policy certainty and stability are critical for continued investment in the UK’s heat pump sector and its ability to support green growth. The government’s recent announcements are major steps in the right direction, providing much-needed clarity and funding commitments that enable businesses to make informed investment decisions.”

The government is also introducing new energy efficiency standards. These will apply to rented homes and heating systems, like boilers and heat pumps. The aim is to reduce household costs and improve comfort.

The plan is expected to lift over 1 million households out of fuel poverty. It will also create new jobs in the clean energy sector. The government is supporting British manufacturing by funding UK heat pump manufacturers.

These changes will help save families £100-200 a year on their energy bills and make homes more energy-efficient for the future. 

While this new plan is a huge step forward for many UK homes, there is still work to be done to ensure the heating transition is equitable.

Charlotte Lee continues:

“Whilst these are all very pleasing developments, the sector remains steadfast in its call for action to address the UK’s high electricity-to-gas price ratio. Changing such is vital to unlocking the widescale growth in electrified heat needed to meet UK carbon emission reduction targets and we hope to see a commitment to tackling this in the coming months.”

Meanwhile, the GSHPA is concerned that there is no clear timeline for the Future Homes Standard. That’s a key policy to reduce reliance on gas and promote heat pumps in UK homes. They urge the government to implement the standard quickly to speed up the transition to more sustainable and affordable heating solutions. Doing so would benefit both the environment and household budgets. 

Sustainable heating is the way forward, not just for the planet, but for the pocket too. The Warm Homes Plan is a fantastic start towards green, equitable heating. We’re excited to see what impact it will have across 2025, and how much more the government is willing to do to help the transition.