Wave 1 of the Social Housing Decarbonisation Fund (SHDF) awarded £179 million to 69 projects, funding announced in February 2022, which is upgrading up to 20,000 social housing properties1. The scheme sits within the government's wider Help to Heat programme, which the Department for Business, Energy and Industrial Strategy described as £12 billion of combined funding1.
The SHDF is a £3.8 billion government manifesto commitment over a 10-year period to improve the energy performance of socially rented homes1. Social housing with an Energy Performance Certificate (EPC) rating of D or lower is eligible to receive SHDF upgrades1. An earlier £62 million SHDF demonstrator project, launched in 2020, is set to improve the energy efficiency of up to 2,000 social homes to at least EPC Band C, supporting over 1,000 jobs1.
The measures installed under the programme include external wall and loft insulation, energy efficient doors and windows, heat pumps and solar panels, with multiple measures often fitted in a single home1. The government said the upgrades would help households save around £400 to £700 a year on their energy bills at current prices, and that funding could support around 19,000 green energy sector jobs1.
The wave 1 funding was announced alongside a second wave. Up to £800 million of SHDF wave 2 grant funding is intended to see around 100,000 social homes receive energy efficiency upgrades, with estimated average energy bill reductions of around £400 a year at current prices1. Grant funding provided by the government has to be matched by those applying, doubling the investment being made under the SHDF scheme to around £1.6 billion1.
"The wave 2 funding builds on the £179 million funding announced through SHDF wave 1 in February 2022, which is upgrading up to 20,000 social housing properties"
The Home Upgrade Grant (HUG) runs alongside the SHDF, with up to £700 million available for local authorities to install energy efficiency measures in around 30,000 properties, and estimated average annual energy bill savings of around £700 at current prices1. HUG targets privately owned off gas-grid homes, both rented and owner-occupied, occupied by people on low incomes, with eligible homes rated EPC Band D to G1.
| Scheme | Funding | Homes | Average bill saving cited |
|---|---|---|---|
| SHDF wave 1 | £179 million | Up to 20,000 social homes | Not stated for wave 1 |
| SHDF wave 2 | Up to £800 million | Around 100,000 social homes | Around £400 a year |
| Home Upgrade Grant | Up to £700 million | Around 30,000 off gas-grid homes | Around £700 a year |
Why it matters for households
For social tenants, the SHDF route to warmer homes runs through their landlord, not through an application by the household itself. Eligibility turns on the property's EPC rating: social housing rated D or lower qualifies for SHDF upgrades1. The measures funded are fabric and heating upgrades, so the effect on a home's energy independence comes from reducing the heat it loses and, where a heat pump or solar panels are installed, changing how it is supplied. The government's own estimate of the saving is around £400 to £700 a year at current prices across the Help to Heat schemes1, though the sources do not give a separate figure for wave 1 properties.
The funding is matched by applicants, so the total investment under the SHDF is around £1.6 billion rather than the grant sum alone1. The sources do not report how wave 1 funding was divided between landlords or regions, nor how many of the 20,000 properties have been completed.
What happens next
The wave 2 competition opened with the September 2022 announcement, with local authorities and social housing providers able to submit bids and deliver upgrades from early 2023 until March 20251. The Home Upgrade Grant is allocated £1.1 billion in total, with delivery taking place from early 2022 to March 20251. The 2021 Spending Review committed £800 million for the SHDF and £950 million for the HUG across three years1.