The Welsh Government has allocated an additional £5 million to the Nest scheme, bringing total funding for the demand-led scheme to £37 million this financial year. The announcement was made by Siân Gwenllian MS, Cabinet Minister for Local Government, Housing and Planning, in a written statement published on 16 July 20261.
The £5 million forms part of a wider £17 million injection into housing retrofit schemes, drawn from existing budget within the minister's portfolio1. Alongside the Nest allocation, the Optimised Retrofit Programme receives an additional £8 million, bringing its total budget to £106.75 million this financial year. A further £4 million is made available to fund alternative and novel delivery models, working with local partners across Wales1.
The statement follows a review of the existing Warm Homes Programme, which the minister committed to in the First 100 Days Plan. A report on that review was published on the same day1.
"£5 million is allocated to the Nest scheme, taking the total funding for the demand-led scheme to £37 million this financial year."
The minister described the Nest scheme as having been "proven to deliver quality installations and outstanding benefits to households" and as "a lifeline for many low-income households living in cold, damp homes"1. The Optimised Retrofit Programme, which funds improvements to social housing stock, is in its final year; the statement says insights from it will inform future policy1.
| Scheme | Additional funding | Total this financial year |
|---|---|---|
| Nest | £5 million | £37 million |
| Optimised Retrofit Programme | £8 million | £106.75 million |
| Alternative and novel delivery models | £4 million | Not stated |
The £4 million for alternative delivery models will fund pilots that complement Tai Clyd Caerdydd, an area-based project in the Splott, Adamsdown and Fairwater areas of Cardiff, delivered in partnership with Cardiff Council. The previous government committed £3 million to that project1. Details of the new pilot schemes have not yet been set out1.
Why it matters for households
Nest is the Welsh Government's demand-led scheme, meaning funding responds to applications from eligible households rather than being allocated to fixed areas in advance. The increase to £37 million raises the ceiling on what the scheme can spend this year on home energy grants for low-income homes in Wales.
For households in cold, damp or hard-to-heat properties, the practical effect is on the volume of work the scheme can support: insulation, heating upgrades and similar measures that reduce how much energy a home needs to stay warm. That reduction in demand is the core of household energy independence, since a home that loses less heat depends less on whatever price the market sets.
The £8 million for the Optimised Retrofit Programme applies to social housing rather than owner-occupied homes, so its reach is through landlords and housing associations. The £4 million for novel delivery models is aimed at testing approaches, including neighbourhood-level working across tenures, and no scheme details have been published1.
The statement also notes that further work will review cost-effectiveness and where Welsh Government funding and wider policies should be targeted, and will look at maximising the benefit to Wales of UK Government funding streams1. How that interacts with schemes such as the Boiler Upgrade Scheme has not been reported.
What happens next
Tai Clyd Caerdydd will open for applications in September 2026, when eligible residents will be contacted with further details1. Details of the alternative and novel delivery model schemes will be set out in due course1. The review's findings will feed into work informing the next emissions reduction plan, which the statement says will start immediately1.