Phase 2 of the Home Upgrade Grant (HUG 2) began in April 2023 and runs until March 2025, allocating up to £700m across local authorities in England1. The scheme funds energy efficiency upgrades and clean heating systems for low-income households, delivered by councils rather than claimed directly by householders1.
The grant targets the worst performing homes, specifically those with an Energy Performance Certificate (EPC) rating of D or lower and those with no mains gas central heating1. Its stated aims are to bring homes rated F or G up to D, and homes rated D or E up to C, and to move households out of fuel poverty1. Of the funding, 60% is ringfenced for rural local authorities1.
Eligibility criteria as reported are that a household is low income, is off the gas grid, has an EPC of D, E, F or G, and lives in a participating local authority area1. Meeting these criteria does not guarantee an upgrade1. Measures funded through councils include loft insulation, air source heat pumps and electric radiators1.
Accounts of the funding total differ. One source gives up to £700m1; another states the Home Upgrade Grant provides up to £750m of funding for local authorities in England2. The scheme's start date is also reported inconsistently: one source gives April 20231, while another lists the Home Upgrade Grant as running from September 2023 to March 20253. The number of participating authorities is given as around 453.
"Phase 2 of the Home Upgrade Grant began in April 2023 and will run until March 2025."
Grant amounts per household are not set out in the same terms across accounts. One source states grants of up to £10,000 for home improvements that can include solar panels, dependent on the local council4. Applications for HUG 2 have closed, with successful authorities announced1.
| Item | Detail as reported |
|---|---|
| Phase 2 period | April 2023 to March 20251 |
| Allocation | Up to £700m1; up to £750m2 |
| Rural ringfence | 60% of funding1 |
| EPC target | F or G to D; D or E to C1 |
| Eligible EPC bands | D, E, F or G1 |
| Maximum grant | Up to £10,000, council dependent4 |
Why it matters for households
For homes without a gas connection, the options for cutting running costs are narrower than for homes on mains gas, and the upfront cost of insulation or a heat pump is the main barrier. HUG 2 routes funding through councils, so whether a home can access it depends on where it sits rather than on the household applying directly. The scheme's focus on EPC bands D and below means it is aimed at the leakiest housing stock, where a change of heating system alone would not deliver the full benefit without insulation first. For a household off the gas grid, an upgrade of this kind changes the fuel a home depends on and how much of its heating cost is exposed to delivered fuel prices. The Home Energy Grants and Schemes in the UK: The Full Guide sets out how this scheme sits alongside others, and ECO4 vs the Home Upgrade (HUG2) compares the two routes. Eligibility by benefit is covered in Which Benefits Qualify You for Energy Grants, and delivery by councils in Council and Local Authority Energy Grants.
What happens next
HUG 2 runs until March 20251. Applications have closed and successful authorities have been announced1. No further phase has been reported in these accounts.
Sources4 cited
- Home Upgrade Grant for homes with no gas boiler - Elmhurst Energy, elmhurstenergy.co.uk
- Heat pump grants explained | NIBE, nibe.eu
- Solar Panel Grants & Incentives UK (2026), heatable.co.uk
- Are Photovoltaic Panels Worth It?, ecoflow.com