The Department for Energy Security and Net Zero updated the delivery guidance for Phase 2 of the Home Upgrade Grant (HUG 2) on 6 November 2023. The change affects how local authorities in England grade measures when delivering the grant, and who can take part as a landlord1.
In the Measure Grading table, battery storage and solar PV have been moved to grade A. The department also introduced an exemption to the private rented sector 4-property cap for charities1.
"We have updated the delivery guidance for local authorities: in the Measure Grading table, battery storage and solar PV have been moved to A. We have also introduced an exemption to the private rented sector 4-property cap for charities."
HUG 2 provides energy efficiency upgrades and low carbon heating through local authority funding to households in England that are low income, off the gas grid, and have an Energy Performance Certificate between D and G1. Up to £630 million of grant funding is 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.
Measures could include, for example, home insulation with an air source heat pump if suitable, with upgrades tailored to individual homes1. Homeowners on a low income do not contribute to the cost of upgrades. Private landlords must contribute at least a third of the total cost of the upgrade, and social landlords at least half. All upgrades need to be within the relevant cost caps to be eligible1.
| Landlord or occupant | Contribution to upgrade cost |
|---|---|
| Low income homeowner | No contribution |
| Private landlord | At least one third of total cost |
| Social landlord | At least half of total cost |
Phase 2 of the Home Upgrade Grant is now closed to applications. Local authorities had to apply for the funding by 27 January 2023, and BEIS assessed applications at two deadlines, 18 November 2022 and 27 January 20231. The page states that eligible homeowners, tenants and private landlords were able to check whether their local authority had funding and contact them for next steps1.
Why it matters for households
The grading change affects which measures local authorities can install under HUG 2, and battery storage and solar PV now sit at the top grade in the table. For an off gas grid home, that combination can matter for energy independence: solar PV generates electricity on site and battery storage holds it for use when the sun is not shining, reducing reliance on imported power and on delivered fuels. The charity exemption widens who can take part on the landlord side, since charities letting homes were previously caught by the four-property cap in the private rented sector. Landlords weighing upgrades can read more on funding energy upgrades as a landlord.
The grant itself is closed to new applications, so the immediate effect is on delivery of already funded projects rather than on new household applications. The page does not report how many charities or landlords are affected by the exemption, or how many homes have received battery storage or solar PV under HUG 2.
What happens next
The published update history records later changes to the guidance and its supporting documents, including a 2024 update to the delivery guidance for local authorities and an addendum to the Memorandum of Understanding added on 28 March 2024, and an updated local authority data collection template added on 30 April 20251. No further changes to the Measure Grading table or the charity exemption have been reported1.