The Department for Business, Energy and Industrial Strategy updated the Sustainable Warmth Competition guidance on 7 October 2022, adding clarification on delivery and timescales, grant funding, eligible homes, funding and eligible costs, and a new definitions section1. The competition itself remains closed to applications, having launched in June 2021 and closed in August 20211.
The Sustainable Warmth Competition awards funding to local authorities to upgrade energy inefficient homes of low income households in England1. It covers two schemes: Local Authority Delivery Phase 3 (LAD3), with £287 million to support low-income households heated by mains gas, and Home Upgrade Grant Phase 1 (HUG1), with £152 million to support low-income households off the gas grid1. The Home Upgrade Grant is the off-gas element of this funding.
The focus is on upgrading the worst insulated owner occupier and private rented homes with energy efficiency installations and low carbon heating1. Projects upgrading homes with an Energy Performance Certificate (EPC) rating of E, F or G are prioritised, while upgrades to properties rated D are allowed but limited1.
Funding rules differ by tenure. Low-income households who own their home can get upgrades fully funded within the relevant cost caps and do not have to contribute1. Where a household is low-income and renting, the landlord must contribute at least a third of the total cost of upgrading the property within the relevant cost caps1.
"Update to provide further clarification on delivery and timescales, grant funding, eligible homes, funding and eligible costs and there is now a new definitions section."
| Scheme | Funding | Households |
|---|---|---|
| Local Authority Delivery Phase 3 (LAD3) | £287 million | Low-income households heated by mains gas |
| Home Upgrade Grant Phase 1 (HUG1) | £152 million | Low-income households off the gas grid |
Why it matters for households
The Sustainable Warmth Competition is closed, so no household can apply to it directly; funding was allocated to successful local authorities, and delivery runs through them1. For a household in an inefficient home, the practical route to this money is through a participating council rather than a direct application. The scheme's split between mains gas and off-gas homes reflects the different upgrade paths available: Boiler Upgrade Scheme grants and other support sit alongside this local authority funding for homes seeking to move away from gas or other fossil heating. The tenure rules matter for anyone renting: owner occupiers in low-income households face no contribution within the cost caps, while private renters' landlords must meet at least a third of the cost1. The EPC prioritisation means the least efficient homes, rated E, F or G, are first in line, with D-rated homes limited1. The updated definitions section is intended to remove ambiguity in how these terms are applied.
What happens next
Projects must be completed by 31 March 20231. The competition is closed to applications, and no further application window has been reported1. Enquiries can be directed to Sustainable.Warmth@beis.gov.uk1.