Social Housing Decarbonisation Fund began delivery

The Social Housing Decarbonisation Fund (SHDF) began delivery in March 2022, according to the Household Energy Efficiency Statistical Release published on 30 March 2023¹. The scheme launched in 2022 alongside Sustainable Warmth, which combines Local Authority Delivery phase 3 (LAD3) and Home Upgrade Grant phase 1 (HUG1)¹.

Delivery under SHDF was small in its first year. To the end of December 2022, 2,300 measures were delivered through the fund, against 6,900 through Sustainable Warmth and 35,100 through LAD1 and LAD2¹. Across all government support schemes, around 204,100 measures were installed during 2022, a decrease of 55 per cent compared with 2021¹.

The wider picture was dominated by the Energy Company Obligation, which accounted for 78 per cent of all measures installed in 2022¹. ECO delivered 159,700 measures that year, down 59 per cent on 2021, as the scheme transitioned between phases: ECO3 closed at the end of March 2022 and ECO4 commenced in April 2022, although the ECO4 Order did not come into force until July 2022¹. Installations between 1 April and 30 June 2022 could be counted as either ECO3 Interim Delivery or ECO4 Early Delivery¹.

"Sustainable Warmth (LAD3 and HUG1) and the Social Housing Decarbonisation Fund (SHDF) schemes both launched in 2022."

From 2013 to the end of 2022, around 3.7 million energy efficiency measures were installed in 2.6 million properties through the various government support schemes¹. Insulation levels at the end of 2022 were estimated at 14.8 million properties with cavity wall insulation, 71 per cent of properties with a cavity wall; 17.0 million with loft insulation, 67 per cent of properties with a loft; and 805,000 with solid wall insulation, nine per cent of properties with solid walls¹.

Source: Household Energy Efficiency Statistical Release, 30 March 2023¹

Why it matters for households

For social housing tenants, SHDF is the route by which their landlord can fund upgrades such as insulation and heating improvements without the cost falling on the household. In its first year the fund reached a small number of homes relative to the wider programme, so any tenant waiting on works funded through it was, on these figures, part of a modest first wave¹.

The 2022 figures also show how much of the overall delivery ran through ECO, the supplier-funded obligation, rather than through grant schemes aimed at social housing and low-income households. ECO's 59 per cent fall in 2022 coincided with the changeover to ECO4, and the release notes that carbon and bill savings for ECO have not been updated with ECO4 data because the Ofgem ECO4 register is still undergoing development¹.

For a household, the practical effect of a measure such as cavity wall or loft insulation is a reduction in heat lost through the building fabric, which changes how much energy is needed to keep a home warm. The release records that cavity wall insulation accounted for around 41 per cent of the provisional estimated lifetime carbon savings across ECO and Green Deal schemes to the end of March 2022, and 43 per cent of the estimated lifetime energy savings¹. Under ECO Affordable Warmth, around 1.86 million measures installed to the end of 2021 were estimated to deliver £18.6 billion in notional lifetime bill savings, with a further 90,500 measures installed between January and March 2022 carrying an estimated £659 million in lifetime bill savings¹.

What happens next

The release does not set out delivery targets or timetables for SHDF beyond the 2022 figures. It states that ECO4 benefits monitoring information will be available in a subsequent quarterly release, and that information on innovation measures installed under ECO4 is currently unavailable but will be published in a subsequent release¹.

Sources1 cited

1. Household Energy Efficiency Statistical Release, assets.publishing.service.gov.uk