The Cabinet Minister for Local Government, Housing and Planning, Siân Gwenllian MS, published a report on the review of the Warm Homes Programme on 16 July 2026 and set out her immediate response to its findings1. The review was a commitment in the Welsh Government's First 100 Days Plan1. The additional funding comes from existing budget within her portfolio1.
The £17 million is split across three areas. £5 million goes to Nest and the Warm Homes Programme in Wales, taking total funding for the demand-led scheme to £37 million this financial year1. A further £8 million goes to the Optimised Retrofit Programme, bringing its total budget to £106.75 million this financial year1. The remaining £4 million funds alternative and novel delivery models with local partners, with details to be set out in due course1.
"I am using existing budget within my portfolio to inject a further £17 million of funding into housing retrofit schemes."
The report sets out the current condition of homes in Wales. It states that 45.9% of homes assessed between 2015 and 2024 received an Energy Efficiency Rating of A, B or C, with social homes at 73.2%, private rented homes at 37.3% and owner-occupied homes at 32.4%2. It estimates 25% of households, or 340,000, were in fuel poverty as of October 2024, with a further 16% at risk2. Among households in homes rated F or G, 58% were in fuel poverty, against 15% in homes rated A to C2.
On Nest, the report says the scheme launched its latest iteration on 1 April 2024 and that in 2024-25 improvements produced an estimated £595 average annual reduction in energy bills, with 98.4% of installations surveyed passing first time2. The average installation package has cost approximately £20,000 over its first two years2. A formal evaluation has started and will report in 2027-282. The report also notes a surge in applications since the announcement that the Energy Company Obligation Phase 4 was ending2.
The Optimised Retrofit Programme is in its final year in its current form1. The report says it has allocated £480 million since 2020, enabling over 42,000 energy efficiency upgrades, and that an independent evaluation found it "delivers strong value for money across all packages and scenarios tested"2. The Green Homes Wales pilot, launched in autumn 2024, has received more than 8,000 expressions of interest, leading to 1,700 whole-home assessments and 445 loans at an average of £14,5002.
Why it matters for households
The funding increases the budgets of schemes that households on low incomes can access, but it does not change who is eligible. Home Energy Grants in Wales are delivered through Nest for low-income owner occupiers and private renters, and through the Optimised Retrofit Programme for social housing landlords rather than tenants directly2. The report notes that some eligible customers who entered Nest did not proceed to installation because the 12% bill savings target could not be delivered2.
The wider context is a gap left by the closure of ECO4, which the report says brought Wales approximately 12% of all installations under the scheme and investment estimated at over £100 million per annum, alongside what it calls well-documented quality issues and ongoing problems with remediation works2. £86 million of consequential funding has been allocated to Wales across four years because of the ECO closure and proposed successor support in England2. The report states there will be no GB-wide replacement scheme2.
For a household, the practical effect is that the main routes to funded insulation, heating and solar remain the devolved schemes and the UK-wide Boiler Upgrade Scheme, which the report says is expected to continue in Wales until at least 2030 and accounts for approximately 5% of vouchers issued and redeemed between May 2022 and May 20262. The report also points to UK Government responsibility for rebalancing electricity and gas prices and for minimum energy efficiency standards in the private rented sector, recently increased to a rating of C by 20302.
What happens next
Tai Clyd Caerdydd, a pilot area-based project in the Splott, Adamsdown and Fairwater areas of Cardiff, will open for applications in September 2026, when eligible residents will be contacted with further details1. The project is delivered in partnership with Cardiff Council, with £3 million committed by the previous government1. The Welsh Government says it will review evidence on cost-effectiveness to inform the next emissions reduction plan and will look to maximise the benefit to Wales of UK Government funding streams1. Details of the alternative delivery models funded by the £4 million have not been reported1.