Warm Homes Nest scheme launched

The Welsh Government launched its new Warm Homes Nest scheme on 1 April 2024, replacing the previous Nest contract, which had been extended to the end of March 2024¹. The scheme is the Welsh Government's primary mechanism for tackling fuel poverty, targeting low-income owner occupiers and tenants in private rented accommodation³.

The new scheme places a greater focus on low carbon technologies for the home, to support the Welsh Government's ambition to make Wales net zero by 2050⁴. A package of measures, guided by a whole-house retrofit assessment and a medium term improvement plan produced by an independent advisor, might include insulation, efficient heating systems, rooftop solar PV and, where feasible, low carbon heating technologies such as heat pumps³. The Welsh Government said it separated the advice service contract from the delivery contract so that advice under the scheme is independent from installer businesses working on it¹.

"On 1 April 2024 we launched the next iteration of the Warm Homes Programme and ensured there was no gap in provision between the previous and the new Programme."

The previous Nest contract delivered £39.3 million of investment in 2023-24, improving 4,816 homes, providing free energy savings advice to 12,809 households and producing a modelled average bill saving of £595 per year¹. Since 2011, the Welsh Government has invested more than £251 million through the Warm Homes Nest scheme, which has helped more than 82,000 lower income households with installed measures and more than 210,800 who contacted it for free energy efficiency advice¹. The scheme has been given a 7% allocation uplift in the Welsh Government's budget for 2025-26 and is a seven year scheme¹.

Source: Tackling fuel poverty: priority actions update, GOV.WALES¹

In 2024-25, 98.4% of installations surveyed passed first time, and upheld customer complaints accounted for 1.4% of all installations³. The improvements produced an estimated £595 average annual reduction in energy bills, with lifetime carbon savings exceeding 107,000 tonnes³. The average installation package cost approximately £20,000 in the scheme's first two years³. A formal evaluation of the scheme has started and will report in 2027-28³.

Why it matters for households

For a household in Wales on a low income, the scheme is the main route to a funded package of energy efficiency measures, rather than a single measure. Eligibility requires the household to own or privately rent its home, not be a local authority or housing association tenant, receive a means tested benefit or live in a low-income household, and have a home with a low energy efficiency rating⁴. The Welsh Government has said the expansion of eligibility to low-income households who do not receive means tested benefits has improved fairness while remaining focused on those in most need, and that the health eligibility route is valued³.

The scheme's emphasis on low carbon technologies, including heat pumps, changes what a participating home can expect compared with earlier rounds, and the Welsh Government has noted that increased heat pump installations carry additional capital cost that must be taken into account in future budgets³. For a home's energy independence, the practical effect is a shift from bill reduction alone towards reducing reliance on gas for heating, though the Welsh Government has said some eligible customers did not proceed to installation because the 12% bill savings target could not be delivered³.

The scheme sits alongside other support. Green Homes Wales, a pilot launched in autumn 2024, offers households above the Nest or ECO4 income thresholds advice, interest-free finance and vetted retrofit experts; it has received more than 8,000 expressions of interest, leading to 1,700 whole-home assessments and 445 loans at an average of £14,500³. The Boiler Upgrade Scheme continues to operate in Wales, with installations there accounting for approximately 5% of vouchers issued and redeemed between May 2022 and May 2026³.

What happens next

The Welsh Government has said a surge of applications to the Nest scheme followed the announcement that the Energy Company Obligation Phase 4 (ECO4) was coming to an end, and that this surge is likely to continue as more households recognise ECO is heading towards full closure with no GB-wide replacement scheme³. £86 million of consequential funding has been allocated to Wales across four years because of the ECO closure and proposed successor support in England³. The Welsh Government has said it is developing updated fuel poverty estimates relating to October 2024, anticipated for publication early in the autumn¹.

Sources4 cited

1. Tackling fuel poverty: priority actions update HTML | GOV.WALES, gov.wales
2. Warm Homes Nest scheme: annual report 2023 to 2024 HTML | GOV.WALES, gov.wales
3. First 100 Days: Warmer and more energy efficient homes HTML | GOV.WALES, gov.wales
4. Energy Efficiency - Pembrokeshire County Council, pembrokeshire.gov.uk