On 21 January 2026, the Department for Energy Security and Net Zero published the Warm Homes Plan, setting out a major national programme for residential energy upgrades. The plan provides a comprehensive framework covering insulation improvements, heat pumps, heat networks, rooftop solar, energy efficiency measures, and wider decarbonisation initiatives. It builds on the groundwork laid by the Heat Networks (Market Framework) (Great Britain) Regulations 2025, also in January 2026, which established key consumer protections and regulatory foundations for the heat network sector, which to date has been substantially unregulated.
The Government has committed £15 billion of direct investment to the Warm Homes Plan, forming part of a wider £38 billion investment package over the course of this parliament. A further £1.5 billion has been earmarked for Scotland, Wales and Northern Ireland. This represents one of the most significant interventions in the UK’s domestic energy market to date, aimed at decarbonising homes, reducing household energy bills, accelerating clean heat technologies and delivering stronger protections for consumers.
The Government’s ambition is substantial: upgrading five million homes under the Warm Homes Plan and cutting average annual energy bills by up to £1,000, with the aim of lifting one million households out of fuel poverty by 2030.
The Warm Homes Plan also envisages a change to the EPC scheme in order to assist with achieving its aims. Some of these changes have already begun, with the release of the consultation on private rental energy standards, the final evaluation of domestic PRS energy efficiency regulations and the new Home Energy Model EPC methodology. This will form the subject of a further article which we'll publish in due course.
Key funding streams
The plan sets out five core schemes through which funding will be delivered:
- £5 billion for energy efficiency upgrades for households on lower incomes, including insulation, rooftop solar, battery storage and low carbon heating such as heat pumps.
- £2 billion for low cost loans to support wider take up of home energy improvements.
- £2.7 billion for the enhanced boiler upgrade scheme.
- £1.1 billion for the heat networks scheme.
- £2.7 billion allocated to innovative financing through the Warm Homes Fund.
Establishment of the Warm Homes Agency
A new Warm Homes Agency has been established as the executive body responsible for delivering the plan and overseeing related government schemes. It'll also, in time, act as the national heat network zoning authority, enabling a coordinated nationwide approach to deployment, planning and regulation. The agency will have a number of roles including taking on the roles of Salix, which is to close.
Heat networks: A growing opportunity
Heat networks form a central pillar of the Warm Homes Plan. The Government has set ambitious targets for heat networks to meet 7% of national heat demand by 2035, rising to 20% by 2050. Significant public funding will be available to support zoning, construction and deployment.
For developers, local authorities, investors, landowners and operators, the encouragement of new projects supported by the strengthened regulatory framework and long term funding presents a substantial commercial opportunity. Confidence in the market is expected to grow as the pipeline of projects expands, paving the way for large scale, strategic heat network developments nationwide.
How we can help
This is an exciting and transformative period for the UK’s heat network sector. The scale of Government investment, combined with increasing regulatory clarity, means organisations across the supply chain will be looking to position themselves to take advantage of new opportunities.
If you'd like to discuss what the Warm Homes Plan means for your organisation, the opportunities it may open up, or how to navigate the evolving regulatory landscape, please get in touch with our team.
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