Home insulation grant scheme UK: what is government energy saving plan, who can apply, what will grant cover?

Energy Secretary Grant Shapps said it’ll allow ‘thousands more’ to fund improvements, like loft insulation. But Labour said it was ‘far too little, too late’

The government has announced a £1 billion energy efficiency scheme in a bid to get UK households to cut their energy usage.

It comes as the country grapples with the major challenges presented by the cost of living crisis and high energy bills. With potential blackouts meaning some could be stuck without heating at some points this winter, we could be on course for the biggest energy crisis since the 1970s over the coming months.

The Russia-Ukraine war and its political impact has compromised energy supplies around the world. On these shores, it has brought about significant hikes to energy bills as a result of the UK’s heavy reliance on gas for its electricity generation and domestic heating.

The government has set up several schemes to limit the impact of price rises, most notably through the energy bills grant scheme and the energy price guarantee. But electricity is still 66% more expensive and gas is 130% dearer compared to 2021. At the same time, the National Grid and experts have warned supplies may have to be limited at peak times.

Energy and environmental campaigners have argued the government could help to limit energy bill rises for households, whilst also lowering demand, by subsidising home insulation - calls the Rishi Sunak administration now appears to have listened to. But how will its new scheme work - and who will be eligible to apply? Here’s what you need to know.

Funding for loft insulation grants could be coming as soon as April 2023 (image: Adobe)

What is Eco+ insulation grants scheme?

Energy Secretary Grant Shapps announced on Monday (28 November), that an insulation grants scheme will be launched in spring 2023.

Known as Eco+, the support could see hundreds of thousands of households get loft and cavity wall insulation between next year and March 2026. While specifics about how much funding households will get are not yet known, reporting by The Times suggests up to £15,000 per home will be made available.

The newspaper also said the scheme would target middle earners who could afford to front up some of the cost of improvements. However, the government has said that 80% of the funding will apply to the country’s least energy efficient homes (with an EPC rating of ‘D’ or less) and those in lower council tax bands.

The UK government has created a plan for how energy needs will be met if the country experiences blackouts this winter. Credit: Getty Images

It means 10 Downing Street and several other mixed-use government properties could be in line to receive the funding, as a NationalWorld investigation found their energy certificates were rated as being an ‘E’.

The other 20% will be targeted at the UK’s most vulnerable households, including those in fuel poverty or who are on means-tested benefits. Essentially, it means the scheme is an extended version of the existing ECO4 scheme, which supports those in social housing and households with low incomes.

Shapps said it would “enable thousands more to insulate their homes” and save them an average of £310 off their annual energy bills. The cabinet minister added that it would also “[create] jobs across the country”.

The Energy Saving Trust - an independent organisation which advises on ways to cut emissions - says loft insulation for a typical semi-detached household  costs around £640 to install and can shave around £355 a year off heating bills. Meanwhile, cavity wall insulation can cost £1,000 for a semi-detached property and would lead to an annual saving of £395 on bills.

Although it has been calling for an insulation scheme for several months, Labour criticised the new policy as being a “reheated announcement with no new resources” that would be “far too little, too late”.

Shadow climate change secretary Ed Miliband said: “This [announcement] will help only a tiny fraction of the millions of people facing a cost-of-living emergency this winter. Labour’s warm homes plan would insulate up to two million homes a year, saving pensioners and families up to £1,000 off their energy bills.

“Rishi Sunak wants to crawl towards warmer homes and cheaper bills for our country. Labour will sprint for it – because that’s what the bills crisis demands.”

Meanwhile, Greenpeace UK energy campaigner Georgia Whitaker warned the funding would not stretch far enough given the environmental group estimates seven million homes are in fuel poverty and 19 million homes are poorly insulated.

“At least £6 billion is needed by the end of this Parliament for a nationwide insulation programme that will not only help reduce our emissions but will also reduce the terrible levels of fuel poverty in the UK,” she said.

How can I apply for insulation grants scheme?

At present, there are no details on how to apply for the insulation scheme. NationalWorld will update this piece as soon as further information becomes available.

What else has government said about insulation?

Some form of scheme to better insulate British homes has been in the offing since the autumn statement, when Jeremy Hunt announced an extra £6.6 billion in funding for energy efficiency.

The Chancellor pledged this would roll out between 2025 and 2028 alongside a target to reduce the overall energy consumption of buildings and industry by 15% by 2030. The money is set to be handed out by a taskforce that will focus on insulation and boiler upgrades.

But Greenpeace described the announcement as paying “lip service” to insulation because of the time delay. The environmental group’s UK political campaigner Ami McCarthy said: “A promise of more money in three years’ time helps no one.

“The government should launch a nationwide warm homes programme now that can save households £10bn a year on energy bills and lift people out of fuel poverty. The sooner we get going the sooner we’ll reap the rewards of more affordable bills, more energy security and a more stable climate.”

Ms McCarthy was echoed by Luke Murphy, head of the fair transition unit and associate director for the energy, climate, housing, and infrastructure team at the IPPR think tank. He described plans to introduce more support from 2025 as “beyond ridiculous” as energy bill hikes “are hitting households now and costing the taxpayer billions”.