The Minister for Climate Change set out proposals on 8 November 2022 to improve the energy efficiency of all Welsh homes, according to a Welsh Government report published on 13 June 20231. The intention is to continue a fabric first, worst first and low carbon approach, delivering measures to the least thermally efficient low-income households in Wales1.
The report states the work will be achieved in two parts. Part 1 covers procuring a replacement demand led service to ensure continuity for those least able to pay and to respond to the cost of living crisis. Part 2 covers the development of a whole housing stock approach to decarbonisation, providing a long-term strategy for energy efficiency, fuel poverty and decarbonisation for the sector1.
"The intention set out is to continue to take a fabric first, worst first and low carbon approach, delivering measures to improve the energy efficiency of the least thermally efficient low-income households in Wales."
The proposals follow delivery under the Warm Homes Programme, made up of the Welsh Government's Nest and Arbed schemes, which the report says have been improving the energy efficiency of homes since 20091. Between April 2018 and April 2021, Nest installed measures in 18,047 homes, the majority of which received a new central heating system, primarily gas boilers1. Between October 2018 and November 2021, Arbed installed measures in 4,453 homes, of which 2,599 (58%) received a new heating system, 2,834 (64%) received solar panels and 718 (16%) received loft insulation1. At the time, 95% of the main heating systems installed by Nest and 98% by Arbed were fossil fuel based1.
The report also records earlier findings and recommendations. It says that even before the pandemic there were substantial delays and around £7.5 million of EU grant funding had not been used1. It states that reliance on means tested benefits as a measure of low income for the Nest and Arbed schemes potentially excludes people living on lower incomes who nonetheless experience difficulty meeting the cost of their home energy needs1. Among the recommendations, it says the Welsh Government should remove the single application cap and design a more intelligent means of limiting costs than the current arbitrary grant cap, and that the next iteration should look to cover the cost of enabling works such as redecoration, especially for the lowest income families1. It adds there should be an increased focus on the Private Rented Sector, with the possibility that landlords contribute towards the costs of installation1.
| Scheme | Period | Homes receiving measures | Main measures |
|---|---|---|---|
| Nest | April 2018 to April 2021 | 18,047 | Majority new central heating, primarily gas boilers |
| Arbed | October 2018 to November 2021 | 4,453 | 2,599 (58%) new heating; 2,834 (64%) solar panels; 718 (16%) loft insulation |
Why it matters for households
The proposals concern the shape of support for improving Welsh homes, and the report sets out what earlier schemes delivered. For a household, the measures described are physical changes to the home: heating systems, solar panels and insulation1. The report notes that most heating systems installed under Nest and Arbed were fossil fuel based, and that the higher costs of low carbon alternatives such as heat pumps would mean fewer households being helped if these measures are used more widely, unless there is a significant funding increase or costs fall substantially1. It also records that the evidence does not show whether the people in improved homes have been lifted out of fuel poverty1. How Welsh homes are heated, and the energy and buildings policy in Wales, set the context for what any replacement scheme can change. The report also notes the introduction of solar PV and battery storage solutions as potential low carbon measures1.
What happens next
The report says it informs the development of the next Warm Homes Programme and provides a single body of evidence to support the design of the replacement scheme or schemes, alongside the public consultation and learning from the Optimised Retrofit Programme1. It states that an accompanying policy statement will set out the Welsh Government's response to the themes identified1. No dates for the procurement of the Part 1 service or for the Part 2 strategy are given in the report1.