The UK Government published the Carbon Budget and Growth Delivery Plan (CBGDP) in October 2025, setting out its policies and proposals to meet statutory emissions reductions targets up to Carbon Budget 6, covering 2033 to 20371. The Department for Energy Security and Net Zero (DESNZ) published a heat and buildings investor factsheet on 23 June 2026 as the first in a series promised in the UK net zero transition investor prospectus1. The factsheet is 19 pages and is also available in a web accessible version1.
The factsheet states that it is intended to summarise and prioritise current policy for investors and does not include previously unannounced policy1. It supports the launch in January 2026 of the Warm Homes Plan2. The Climate Change Committee, in its Progress in reducing emissions 2026 report to Parliament laid on 24 June 2026, said the CBGDP projects slower emissions reductions for surface transport and buildings than the previous government's plan, reflecting slow prior progress and areas of reduced policy ambition, including the decarbonisation of public sector buildings and reduced support for low-income homes to electrify heating and install insulation3.
The factsheet sets out grant levels and scheme timings for home heating. The Boiler Upgrade Scheme has £2.7bn in funding to 2030, covering £7,500 towards the cost and installation of ground and air source heat pumps, including water source heat pumps, £2,500 grants for air-to-air heat pumps and £5,000 off the cost and installation of a biomass boiler2. A £2,500 grant for heat batteries will be available once legislation and product standards are in place2. From July 2026, air-to-water heat pumps and ground source heat pumps replacing oil or LPG systems will receive a grant level of £9,000 for the 2026/27 financial year2.
| Measure | Detail |
|---|---|
| Boiler Upgrade Scheme | £2.7bn to 2030; £7,500 for ground and air source heat pumps; £2,500 for air-to-air; £5,000 for biomass |
| Oil or LPG replacement | £9,000 grant for air-to-water and ground source heat pumps from July 2026, 2026/27 financial year |
| Clean Heat Market Mechanism | Manufacturers required to meet 6% of sales with heat pumps or acquire credits from 1 April 2026 |
| Warm Homes skills programme | Up to 9,000 subsidised training places for installers and retrofit professionals |
| Heat Pump Investment Accelerator | £90m for UK-based manufacturing; Round 2 open 21 April to 5 August 2026 |
The Future Homes Standard requires new homes to have low-carbon heating, such as heat pumps or heat networks, and high levels of energy efficiency, with gas boilers unable to meet the required performance standard and solar panels included for the majority of new homes2. The full technical specification was published on 24 March 2026, with standards coming into force on 24 March 2027 followed by a one-year transitional period2. The Climate Change Committee noted that in March 2026 the government announced regulations had been put in place to implement the Future Homes Standard and Future Buildings Standard3.
On heat networks, a new regulatory regime was introduced as of January 2026 to provide heat network consumers with equivalent protections to those in gas and electricity markets, including designating Ofgem as the sector regulator2. The government said it will support at least 10 of the largest English towns and cities to establish their heat network zones soon after heat network zoning regulations go live later in 20262.
"The factsheets are intended to summarise and prioritise current policy for investors, they do not include previously unannounced policy."
Why it matters for households
The CBGDP is the framework that determines which home energy policies are funded and when, so its contents shape what support is available for changing how a home is heated. The factsheet confirms grant levels for heat pumps and other measures, and sets out the dates on which schemes open and close2. For a household considering a heat pump, the grant level depends on the technology and, from July 2026, on whether it replaces an oil or LPG system2.
The Climate Change Committee's assessment is that the plan projects slower emissions reductions for buildings than the previous plan, and that the growth in heat pump installations in existing homes slowed significantly last year3. It also states that the government's plan for electrification lacks ambition and that the slow pace of electrification leaves the UK exposed to geopolitical shocks3. The Committee reports that around three-quarters of a typical household's driving and home energy bills come from the direct use of fossil fuels in cars and gas boilers, and that following recent fossil fuel price increases, bills rose almost four times more for a typical household with a gas boiler and a petrol car than for one with a heat pump and an EV, and ten times more for a rural household with an oil boiler and a diesel car3.
The Committee states that a typical household with a gas boiler and petrol car would save around £1,210 a year by installing solar panels and switching to a time-of-use tariff, a heat pump and an EV, and that a rural household with an oil boiler and a diesel car could save around £1,880 a year even without solar or time-of-use tariffs3. It adds that not all homes are suitable for solar panels or time-of-use tariffs, and that many would not currently save from switching to a heat pump alone3. It also states that installing low-cost insulation measures such as draught proofing and insulating hot water tanks can help reduce household bills and emissions3.
The Future Homes Standard affects the energy performance of new homes rather than existing ones, requiring low-carbon heating and high energy efficiency, with standards coming into force on 24 March 2027 after a one-year transitional period2. The Future Homes Standard applies to new build, while the Carbon Budgets, Net Zero Targets and the Climate Change Committee framework sets the statutory targets the CBGDP is designed to meet. The wider UK home energy regulation and policy landscape includes the schemes listed in the factsheet.
What happens next
The Clean Heat Market Mechanism requires manufacturers to meet a target of 6% of sales with heat pumps or acquire credits from 1 April 20262. Round 2 of the Heat Pump Investment Accelerator Competition opened on 21 April 2026 and runs to 5 August 2026, with funding to be provided from April 2027 through to March 20302. The Future Homes Standard comes into force on 24 March 2027, followed by a one-year transitional period, with higher risk buildings above 18 metres subject to longer transitional arrangements2. Heat network zoning regulations are expected to go live later in 20262. The Climate Change Committee's report was laid before Parliament on 24 June 20263.