Energy and Buildings Policy in Wales: What the Welsh Government Controls

Energy supply, the price cap and supplier licensing are not devolved to Wales. What the Welsh Government does control, and what therefore shapes a Welsh household's energy costs and its scope for self-supply, is building regulations, planning, social and rented housing standards, fuel poverty programmes and a set of Wales-only funding schemes. Nest, delivered under Welsh Government Warm Homes, is the long-standing route to free measures for lower-income households, with an eligibility test that includes an energy performance certificate rating of 54 (E) or less, or 68 (D) or less where a household member has an eligible health condition¹. Green Homes Wales, a Welsh Government initiative managed by the Development Bank of Wales, supports installation of certain energy efficiency measures and low carbon heating systems in domestic properties in Wales².

Welsh homes sit at the centre of the devolved policy effort because of their share of emissions, and the published figures measure that share in more than one way. A Welsh assessment puts new and existing homes at 20% of greenhouse gas emissions³, while a Welsh case study describes homes as responsible for 27% of all energy consumed and 15% of all demand-side greenhouse gas emissions⁴. The two figures count different things, one emissions and one energy consumed, and are not interchangeable. What follows sets out which levers Welsh ministers hold over those homes, which remain with Ofgem and UK ministers, and what the schemes and standards in force actually offer a household in Wales.

On price, the limit of devolution is explicit. The Welsh Government has called for the UK Government to take action to support households where the energy price cap mechanisms do not provide sufficient protection against rising prices⁵, and a proposed Welsh public energy company would not directly set household energy prices⁶. Welsh policy can change the building, the grant and the planning permission. It cannot change the tariff.

What the Welsh Government controls over home energy policy

The devolved settlement leaves supply regulation with Ofgem and UK ministers, and gives Welsh ministers the levers that sit on the building and the household. Welsh Government publishes its own help with home energy bills for people living in Wales¹², and home energy efficiency support in Wales is delivered by the government of Wales rather than by the UK department¹³. That split matters in practice: a household in Wales looking for retrofit funding is directed to Welsh schemes, while the price cap that sets its unit rates is not a Welsh instrument at all.

Where a UK-wide payment is made but the design is left to Wales, the split shows clearly. On heating oil support, it was stated in the House of Commons that it will be for the Welsh Government to design the scheme that it will use to roll that out, possibly through existing schemes or something different¹⁴. Welsh Government has separately reported thousands of Welsh households getting help with oil and LPG heating costs, through Nest Warm Homes, which offers free energy efficiency advice and improvements to low-income Welsh households¹⁵.

Welsh ministers also use planning and generation powers directly. Since the Welsh Government's 2021 moratorium on large energy from waste plants, that moratorium has applied to plants above 10 MW¹⁶. On heat networks, the Welsh Government said it would review the zoning powers in the Energy Bill and consider the benefits of adopting a similar approach in Wales¹⁷, a decision that determines whether Welsh households can be connected to a zoned network in the way heat network regulation sets out elsewhere. A ban on fossil fuels to heat newly built social homes was announced by the Welsh Government¹⁸.

For a household, this is the practical boundary of Welsh energy sovereignty: Wales can require and fund a better building and can decide what may be built where, while the price of the electricity flowing into it is set under the UK framework and the energy price cap.

The Welsh energy framework and the plans that sit inside it

Welsh energy policy is assembled from several documents rather than a single Act. A national energy plan was to be created by 2024, and by 2025 the Welsh Government was to present a vision for energy in Wales to 2050, including detail on renewable energy production and grid development¹⁹. The National Energy Plan for Wales is intended to set out the energy system changes required to achieve net zero by 2050 while delivering a secure and affordable energy system in Wales²⁰. Its inputs include the Future Energy Grids in Wales project, regional energy strategies, the emerging heat strategy and the energy targets¹⁰.

The draft heat strategy for Wales was consulted on with six objectives: an enabling framework supporting a just transition; energy networks shaping the future of heat supply; homes with affordable warmth for all; business supporting the local economy to flourish; industry fostering innovation and investment; and public services leading by example²¹. It supports the decarbonisation of homes, industry and businesses in line with statutory responsibilities by 2050²². A significant technology ruling sits inside the same policy area: off-gas areas will not use hydrogen¹⁶, which narrows the realistic options for rural Welsh homes and aligns with the wider hydrogen heating policy position.

Ownership is a distinct Welsh strand. The target is for at least 1.5GW of renewable energy capacity to be locally owned by 2035, excluding heat pumps¹⁰, expressed elsewhere as an aspiration of 1.5 GW of local ownership of renewable electricity and heat capacity in Wales by 2035¹⁹. The Welsh Government has pledged to expand renewable energy generation by public bodies and community groups in Wales by over 100 MW by 2026²³, and has a policy for all new energy projects to have at least an element of local ownership¹⁹. The Welsh Government Energy Service supports renewable energy projects in Wales from the concept stage through to financial close and completion²⁰.

Progress is tracked through the Energy Generation in Wales reports, which are intended to provide a clear and transparent picture of Wales's relationship with energy and act as a consistent measure against Welsh Government energy and climate change targets²⁴.

Warm Homes and Nest: who qualifies and what is funded

Welsh Government Warm Homes, which includes the Nest scheme, supports people in Wales living on a lower income who receive a means tested benefit or live with a respiratory, circulatory or mental health condition²⁵. Eligible households can get free energy advice and a suite of home energy efficiency improvements²⁶, described in a later statement as a bespoke package of measures to insulate and decarbonise their home²⁷. The scheme also acts as an emergency route: it is designed to help households facing an immediate risk to their health and wellbeing due to a lack of essential heating or hot water, and can fund replacement of a boiler or electric storage heaters to ensure a safe and reliable heating system⁷.

The property test is numerical. Nest requires that the home has an EPC rating of 54 (E) or less, or 68 (D) or less where someone in the household has an eligible health condition¹. Broader guidance describes the scheme as offering free energy upgrades for houses with a poor EPC rating²⁸. How that rating is produced is covered under EPC regulations and reform.

A demand-led successor has been consulted on, building on free energy efficiency measures and in-home advice for eligible households²⁹. The new Warm Homes Programme will take over from Nest as the Welsh Government's primary mechanism to tackle fuel poverty³⁰. Its intention is to take a fabric, worst and low carbon first approach, delivering measures to improve the energy efficiency of the least thermally efficient low-income households in Wales⁹, focused on households least able to pay for improvements themselves in the owner occupier, private rented and housing co-operative sectors⁹. The long-term ambition is to improve the energy efficiency of Welsh homes, ensuring only the energy needed is used, keeping homes comfortably warm at an affordable cost⁹.

Local authorities sit in the delivery chain. One Welsh council's private sector housing renewal policy expects capital funding for energy efficiency and fuel poverty reduction measures to come through Welsh Government Warm Homes funding and schemes available through utility companies³¹, so a household may meet the scheme through its council rather than directly.

Green Homes Wales: loan support beyond the means test

Green Homes Wales is a Welsh Government initiative managed by the Development Bank of Wales². The scheme supports the installation, in domestic properties located in Wales, of certain types of energy efficiency improvement measure and low carbon heating system³², and is intended to help households across Wales implement energy and carbon-saving measures which can lower both energy consumption and energy bills³³. Ventilation systems are eligible for loan funding support where insulation is being installed, or where additionally recommended by the Retrofit Coordinator², which reflects the ventilation duty that attaches to fabric work and the role set out in the PAS retrofit standards.

The distinction matters for a household planning work. Nest is grant-funded and means tested; Green Homes Wales is a loan scheme available for eligible measures in Welsh domestic property. A loan leaves the household with a repayment obligation, so the independence gained from lower bills is set against a fixed financial commitment.

Fuel poverty and the risk in switching fuels

The Welsh aim is that by 2035 no more than 5% of all Welsh households live in fuel poverty and no households are in persistent or severe fuel poverty⁹. Measured against that, the starting point is difficult. Modelled estimates for Wales record 22% of households in social housing and 23% of dwellings with central heating as fuel poor³⁴. A parliamentary briefing records 53% of households using electricity for heating in fuel poverty³⁵. A Welsh housing decarbonisation study states that almost a quarter of Welsh households experience fuel poverty³⁶, while the Climate Change Committee's Wales work cites 14% of Welsh households in 2021³⁷. The documents use different definitions and dates, and the figures should not be read as a trend.

Modelled estimates for Wales are produced using the Building Research Establishment Domestic Energy Model, BREDEM 2012 version 1.1³⁴. Definitions differ across the UK, as fuel poverty policy sets out.

This is why the fabric first sequencing is not presentational. The Welsh Government said it would prioritise low carbon heat as part of the next iteration of the Warm Homes Programme to support households in fuel poverty in owner-occupied and private rented homes¹⁷, but paired with fabric improvement rather than ahead of it. For a household, the independence gained by leaving the gas grid is real only if the fabric can be heated at electricity prices.

New homes: staged clean energy standards

Welsh Government proposed the introduction of tough new standards on new homes, to be implemented in stages over five years, covering energy efficiency, low carbon heating and energy generation such as photovoltaic panels, heat pumps or district heat networks³⁸. The associated Part L work used the basis of introducing a world-leading performance standard incorporating low-carbon heat in new homes by 2025³. A ban on fossil fuels to heat newly built social homes followed¹⁸.

The Part L review consultation set four metrics for new homes: a primary energy target, a CO2 emission target, minimum fabric standards and a householder affordability rating³⁹. The fourth is distinctively Welsh and directly addresses the fuel poverty risk above. Notional specification and policy changes under Part L in Wales included improved fabric, PV, wastewater heat recovery, air tightness tests for all new homes, removing the fuel factors, and self-regulating devices in all new homes³.

Social housing carries the sharpest targets. The Welsh Government committed to building 20,000 high quality, low carbon homes for rent over the next five years⁴⁰, repeated as 20,000 low carbon social homes for rent over five years¹⁸. The draft heat strategy proposed that all new social housing must have an energy pathway in place to achieve EPC A by 2033, or by a later date the Welsh Government has authorised¹⁷. The Welsh Housing Quality Standard 2023 underpins the commitment to decarbonise housing in Wales to meet legally binding climate targets in 2050⁴¹, and Welsh strategy has long required all housing owned by local authorities to meet the Welsh Housing Quality Standard⁴². Those obligations are compared across the nations in housing quality standards for social and rented homes. Welsh strategy also commits to support new technology like smart meters in family homes⁴².

Welsh Building Regulations: ventilation and energy documents

Building regulations are made for Wales separately, and the approved documents differ from the English set described in Building Regulations in England. The Building Regulations etc. (amendment) (Wales) Regulations 2022 cover energy efficiency, ventilation and overheating⁴³. Approved Document F, Ventilation, Volume 1: Dwellings is the 2022 edition in Wales⁴³, setting standards for ventilation in new dwellings⁴⁴. Approved Document O, 2022 edition (Wales), sets standards for reducing overheating risk in new residential buildings⁴⁵. Approved Document L Volume 1: Dwellings gives practical guidance on ways of complying with the energy efficiency requirements of the Building Regulations 2010⁴⁶, and the 2026 edition gives guidance for building work carried out in Wales⁴⁷. Approved Document L2B was also approved and issued by Welsh Ministers for the purpose of providing practical guidance⁴⁸.

The energy efficiency requirements apply to the erection or extension of, and any work to or in connection with, a building that is a roofed construction having walls, uses energy to condition the indoor climate, and does not fall within an excluded category⁴⁹.

Notification duties are specific. For new dwellings, the building control body must be notified once the work is complete of the as-built target primary energy rate, dwelling primary energy rate, target emission rate, dwelling emission rate, target energy use intensity, dwelling energy use intensity, fabric performance values and a list of specifications⁴⁷. Not later than five days after the work has been completed, the person carrying out the work must give the local authority the as-built notice or a certificate from an accredited energy assessor⁴⁷. Where a system for on-site generation of electricity is installed, sufficient information about the system and its operation and maintenance requirements must be provided to the owner not later than five days after completion⁴⁶. In Wales, regulation 25A requires that, not later than the beginning of the day before the day on which the work starts, the building control authority is given notice that the analysis has been undertaken, is documented and the documentation is available for verification, for work that is not higher-risk building work⁴⁹.

Ventilation when energy work is done to an existing home

The rule that catches retrofit is short. Under the 2022 Welsh amendment regulations, where Part L work is carried out, the ventilation in the building must comply with the standard set out in Part F of Schedule 1 or it must be no worse than before⁴³. Insulating or airtightening a home therefore brings a ventilation duty with it, and this is why Green Homes Wales makes ventilation systems eligible for funding where insulation is being installed or where the Retrofit Coordinator recommends it².

Welsh guidance is explicit that intermittent extract fans should be fitted in all wet rooms⁵⁰. An illustrative natural ventilation package for an existing dwelling comprises 12 background ventilators of 5000mm2 slot type in the head of the window, one 15 l/s intermittent fan in the bathroom, one 30 l/s intermittent fan in the utility room, and reconfiguration of the existing kitchen canopy to duct to outside³.

Background ventilator sizes in Welsh guidance:

For a household, ventilation is the point where an efficiency gain can turn into a moisture or air quality problem if it is skipped, and the regulations treat it as part of the same job rather than an optional extra.

Permitted development for home energy measures in Wales

Permitted development in Wales is governed by Welsh orders amending the Town and Country Planning (General Permitted Development) Order 1995. The Town and Country Planning (General Permitted Development) (Amendment) (Wales) Order 2019, 2019 No. 330 (W. 80), includes provision for minor operations: recharging electric vehicles, a schedule on installation of devolved associated lines and a schedule substituting Part 24⁵¹. It is available only in its original format as originally made⁵¹. An earlier Welsh amendment order, 2013 No. 1776 (W. 177), also applies in Wales⁵².

For solar, permitted development rights are applicable in Wales for installations where capacity does not exceed 50kW for the generation of electricity or 45kW for the production of heat¹¹. Guidance on solar panels and permitted development notes that in many cases, even in conservation areas, homes can have solar panels without requiring planning permission from the council under permitted development⁵³; that guidance is from an English authority and the Welsh orders govern in Wales. Conservation area and listed building consents are dealt with separately, in listed buildings and conservation areas, and rights can be withdrawn by an Article 4 direction.

Heat pumps are the acknowledged gap. The draft heat strategy states that the current permitted development rights related to heat pumps are a barrier to heat pump installation rollout⁵⁴. For a Welsh household, that is a live constraint on the most direct route off gas, and it sits alongside the wider position set out in permitted development rights for home energy equipment. At the larger scale, Welsh work on renewables has suggested a size threshold for permitted development for renewable energy developments, for example 5MW¹⁹.

Planning policy: renewables, fossil fuels and local benefit

Welsh planning policy is being used to pull in two directions at once: opening ground for renewables and closing it to fossil heat. The Welsh Government said it would consult on introducing planning policy that restricts fossil fuel heating in new developments, with a firm date communicated as a ban¹⁷. On the supply side, a recommendation to Welsh Government was to provide support to local authorities, including ministerial directive and updated guidance, to develop a local planning policy environment to support delivery of more renewables¹⁹.

The renewable electricity ambition is framed as continuing to keep pace with consumption after 2035¹⁰, with the stated aim to maximise local ownership, retaining economic and social benefits in Wales¹⁰. Welsh domestic heat demand assumptions in the official generation statistics draw on Energy Use in Wales, 2021¹⁶. Welsh statistics for total domestic energy use are not consistent between documents: one gives 15.7 TWh for heat and another 6.7 TWh, and the point is unresolved, so neither figure should be treated as settled.

How Wales differs from England and Scotland

The clearest differences are structural rather than rhetorical. Wales writes its own approved documents, and Approved Document F Volume 1 in Wales is the 2022 edition with Welsh ventilator sizes⁴³, while England's approved documents and competent person exemptions run separately: in England a building control body does not need to be notified for certain services or fittings if the owner employs an installer registered with a relevant competent person scheme designated in the regulations, including fuel-burning appliances or replacement windows⁵⁵. Scotland operates a building warrant system entirely, described in Scottish building standards, and Scottish new build heat rules are covered in the New Build Heat Standard.

On funding, Wales runs Nest and Green Homes Wales rather than the English scheme set, and UK-wide guidance points households in Wales to the Welsh Government rather than to a UK portal¹³. Targets differ too: Wales aims at no more than 5% fuel poverty by 2035⁹, at EPC A pathways for new social housing by 2033¹⁷, and at 1.5GW of locally owned renewable capacity by 2035 excluding heat pumps¹⁰. A Welsh case study frames the decarbonisation programme as requiring Welsh homes to have reduced carbon demand by 80% by 2050⁴. The comparable English trajectory is set out under the Future Homes Standard, and the wider budget framework under carbon budgets and net zero targets. A parallel account of the Scottish settlement is given in energy and buildings policy in Scotland.

What does not differ is where the bill comes from. A Welsh household can be taken to a higher fabric standard, given a funded heating system and granted permission more easily, and still buys its electricity from a supplier licensed and price-capped under UK rules. Welsh policy raises the floor under the building; the rest is covered in UK home energy regulation and policy.