The Department for Energy Security and Net Zero first published guidance for the Home Upgrade Grant Phase 2 on 29 September 20221. The scheme provides funding for local authorities to improve the energy performance and heating systems of off gas grid homes in England1. The publication page now states that Phase 2 is closed to applications1.
Up to £630 million of grant funding was made available for successful local authorities to deliver HUG 2 from April 2023 until March 2025, released in the financial years 2023 to 2024 and 2024 to 20251. The Heat and buildings strategy announced £950 million to be allocated to the home upgrade grant from April 2022 to March 20251.
Households had to meet three tests to be eligible: low income, off the gas grid, and an Energy Performance Certificate rating between D and G1. Measures could include home insulation with an air source heat pump if suitable, with upgrades tailored to individual homes1. Homeowners on a low income did not contribute to the cost of upgrades1. Private landlords had to contribute at least a third of the total cost, and social landlords at least half1. All upgrades needed to be within the relevant cost caps1.
"Up to £630 million of grant funding is available for successful local authorities to help them deliver HUG 2 from April 2023 until March 2025."
Local authorities had to apply for the funding by 27 January 20231. Applications were assessed by BEIS at two deadlines, 18 November 2022 and 27 January 2023, across three stages: an outline application, a delivery assurance check, and a batch application stage repeated through the delivery window, with funding released in batches subject to need1. Successful local authorities were announced on 22 March 20231.
| Item | Detail |
|---|---|
| Funding available | Up to £630 million1 |
| Delivery window | April 2023 to March 20251 |
| Application deadline | 27 January 20231 |
| Eligibility | Low income, off gas grid, EPC D to G1 |
| Landlord contribution | Private at least one third; social at least half1 |
Why it matters for households
HUG 2 was routed through councils rather than paid directly to households, so a home's access depended on whether its local authority had bid successfully and held funding1. For off gas grid homes, which often rely on more expensive fuels for heating, the scheme targeted both the building fabric and the heating system, with insulation and a heat pump cited as a possible package1. Owner occupiers on low incomes faced no contribution, while renters' upgrades depended on their landlord paying a share1. The scheme is now closed to applications, and the publication does not set out a successor arrangement for households that missed it1. The wider context is covered in the site's guide to home energy grants and schemes in the UK and to grants, schemes and household energy independence.
What happens next
The publication page has been updated repeatedly since first publication, most recently on 30 April 2025, when an updated local authority data collection template was added1. Earlier updates included moving battery storage and solar PV to grade A in the Measure Grading table and introducing an exemption to the private rented sector four property cap for charities, on 6 November 20231. No reopening of Phase 2 to applications has been reported1.