New research published on 21 June by Newcastle University and partners found that the Warm Homes Fund (WHF) cut average annual energy running costs for the households it helped from £2,011 to £1,089, a saving of £922 per household1. The total energy bill savings generated by the project were £10.8 million1.
The WHF delivered energy efficiency measures to fuel-poor households from September 2017 and will run until July 20241. It was funded by National Grid and administered by Affordable Warmth Solutions (AWS), with the research carried out by a consortium of Newcastle University, National Energy Action (NEA) and Energy Audit Company, supported by academics at the University of Bristol1. Measures included first-time gas central heating, air source heat pumps, and energy and health-related advice and support1.
Before improvements, 6,428 homes (41%) had annual running costs above £2,000; after intervention, the number of homes with running costs over £2,000 fell by more than 90% to 4601. The share of households able to keep their whole home warm in cold weather rose from 18% to 76%1. The average SAP rating of the dwellings rose from approximately 51, corresponding to band E, to 68, one point below band C1.
Around 5,500 homes (35%) remained in fuel poverty under the government's Low Income Low Energy Efficiency (LILEE) metric after improvements, but the average fuel poverty gap fell from £699 to £1211. Post-intervention, 48% of households reported better physical health and 39% reported better mental health1.
"The report published by Newcastle University and its partners provides robust evidence that improving the energy efficiency of homes can provide immediate and tangible, positive outcomes for customers."
The evaluation also reported wider economic effects. From an initial £150 million investment, an additional £200 million of demand was stimulated, producing a total economic demand stimulus of £350 million, meaning that for every £1 invested a further £1.34 was stimulated in the wider economy1. Savings to the NHS were estimated at nearly £2.5 million a year, and wider societal benefits at almost £42 million annually1. Wales had the largest range of cost savings and the highest median net cost saving per year, with comparatively high savings also in Orkney and North East Scotland1.
Why it matters for households
The findings give a measured picture of what insulation and heating improvements can do to a home's running costs. For the households involved, the average annual saving of £922 came from installing a new heating system, and the evaluation notes this was calculated using a fuel price figure from before the energy crisis began in October 20211. The research also shows the limits of retrofit: more than a third of homes remained in fuel poverty on the LILEE measure even after improvements, though the average gap between their bills and the level needed to escape fuel poverty narrowed sharply1. The report describes a blueprint for future programme design, which bears on how grant schemes are structured and targeted.
What happens next
The WHF will run until July 20241. A detailed blueprint for the future design and delivery of fuel poverty and energy efficiency programmes has also been published alongside the evaluation1.