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Energy Efficiency and Clean Heat Capital Funding

Volume 742: debated on Monday 18 December 2023

In the 2022 autumn statement, the Chancellor announced that new Government funding worth £6 billion will be made available from 2025 to 2028 to support households, businesses and the public sector drive improvements in energy efficiency and clean heating to bring down bills and emissions.

I can today announce to the House how this money is being allocated between the following schemes.

Nearly £2.5 billion of this funding will be allocated to mass market support for the electrification of heat and energy efficiency. This includes the boiler upgrade scheme (BUS), a new £400 million energy efficiency grant, and a new local authority led retrofit scheme.

Breakdown of the £6,050 millionschemes and total amount allocated for period 2025-28

Universal heat pump insulation support: boiler upgrade scheme—£1,545 million

Heat pump innovation accelerator competition—£15 million

Universal support with measure to help reduce energy bills and make more homes heat pump ready: energy efficiency grant—£400 million

Local Authority led support for low-income households to retrofit homes: local authority retrofit scheme—£500 million

Support installing low-carbon heating and energy efficiency in social housing—which requires match funding from social housing landlords: social housing decarbonisation fund (SHDF)—£1,255 million

Heat network infrastructure: green heat network fund (GHNF); heat network efficiency scheme (HNES)—£530 million

Support public sector organisations (e.g. schools, hospitals) with the capital cost of installing low-carbon heating by covering the difference between a replacement fossil fuel system and a low-carbon alternative: public sector decarbonisation scheme (PSDS)—£1,170 million

Industrial energy transformation fund (IETF)—£225 million

Support to drive industrial energy efficiency and decarbonisation (detail to be announced later subject to further policy development)—£410 million