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External Wall Insulation
Funding For Domestic Retrofit

INCA have put together a short introduction to the main grant funding streams available in respect of external wall insulation in the domestic retrofit market.

The map below summarises the different schemes and timescales – all of which are explained in a little more detail below:

external wall insulation ewi retrofit funding


Introduction: The Energy Company Obligation (ECO) 4 is the long awaited continuation from previous ECO schemes (1, 2 & 3) which originally started back in 2013. As the name suggests the scheme places a legal obligation on all energy suppliers to deliver to a target of energy efficiency measures to domestic properties across the UK. The main aims of the scheme are two-fold:

  1. To help fight against fuel poverty through energy efficiency
  2. To support Government carbon reduction targets

With this in mind the scheme currently focusses on low income families, the vulnerable and fuel poor consumer groups. It does this through the installation of a range of energy efficiency measures (typically 2 or 3 different measures) specified to improve Energy Performance Certificates (EPCs) for a property by a minimum of 2 EPC bands.

Timescale: ECO4 was originally scheduled to follow on from ECO3 in April 2022. However, as we’ve come to expect, legislation was significantly delayed and did not get finalised until mid July 2022. It’s now started (July 2022) and is scheduled to continue up to March 2026

Criteria: Properties with an EPC of E, F or G + low income / vulnerable / fuel poor consumer groups (72% Private low income & 28% Social housing).

Measures Included: Insulation (external wall insulation, internal wall, cavity, loft, underfloor, solid floor, pitch roof, flat roof, room in roof, windows, draft proofing), renewable heating, district heating, heating controls, first time central heating, electric storage heaters (Private homes only), Solar PV.

Focus: A fabric first approach means that energy efficiency improvements to the walls, floors and roof space have to be addressed first before moving to renewable first time central heating systems and solar PV.

Additional Information: Innovation is encouraged under ECO4 with an uplift in funding levels being available for innovative solutions.

How To Access: Funding is administered through the energy providers and hence these are the initial point of contact.

Social Housing Decarbonisation Fund (SHDF) Wave 2.1

Introduction: The Social Housing Decarbonisation Fund or simply SHDF is a large pot of funding administered by BEIS, the Department for Business, Energy and Industrial Strategy. Under the Wave 2.1 bid stage they invite local authorities, combined authorities and registered social housing providers to apply directly for funding that will be used to improve the energy performance of their social housing stock. The scheme will fund up to 50% of the cost of the measures.

The aim of the scheme is to;

  1. Raise the energy performance of D, E, F and G EPC rated properties to a minimum of Band C
  2. To take homes out of fuel poverty
  3. Support UK Government commitment to Net Zero by 2050.

Timescale: Wave 2 of the SHDF competition launches in August 2022 with bids needing to be submitted by mid October 2022. Projects which are successful will be confirmed in February 2023 and these will be expected to complete by June 2025.

Criteria: Social housing providers only with properties which fall within EPC bands D, E, F and G.

Measures Included: As with ECO4, a full range of energy efficiency measures are included within SHDF including EWI and all other forms of insulation, renewable heating, heating controls and Solar PV.

Focus: Solely energy inefficient social housing stock – maximum EPC rating of Band D (of which there are estimated to be around 1.4 million properties). Whole house, fabric first approach following PAS2035 guidelines.

How To Access: Full information is available on the Government Website: Social Housing Decarbonisation Fund: Wave 2.1 >

Green Homes Grant – Incorporating:

     – Local Authority Delivery (LAD) Schemes: LAD1a, LAD1b, LAD2

     – Homes Upgrade Grant (HUG)

     – Sustainable Warmth Competition (SWC)

Introduction: Not to be confused with the ill-fated scheme to support the green economy as we emerged from Covid lockdown this represents a variety of individual schemes within the Green Homes Grant umbrella – all of which are designed to support private homeowners in England on low (less than £30k) income or on means tested benefits in various ways. The schemes support properties in both on-gas or off-gas areas but must have a low rated EPC of Band E, F or G.

Local Authority Delivery Scheme: LAD 1A and 1B are now closed for applications. Phase 2 has £300m allocated between 5 local net zero hubs. The scheme aims to raise energy performance of low income and energy inefficient homes thus helping to reduce fuel poverty, phase out reliance on fossil fuel heating and progress towards the UK net zero commitment. More Information – Government Website >

Home Upgrade Grant: HUG is available via Local Authorities and aimed to support low income families by upgrading the energy efficiency of properties situated in “off main gas” areas of England. £150m of funding is available to support multiple energy efficiency measures of properties meeting this criteria. More information via your Local Authority.

Sustainable Warmth Competition: SWC is a competition being launched to bring together two fuel poverty schemes (LAD and HUG) detailed above into a single funding opportunity for Local Authorities. The Government aims to use this competition t save households money, reduce fuel poverty, cut carbon and support the aims of the Prime Minister’s 10 Point plan for a Green Industrial Revolution. Funding is available to upgrade homes both on and off-gas grid, and is comprised of: Local Authority Delivery (LAD) Phase 3 (£200m available funding) and Home Upgrade Grant (HUG) Phase 1 (£150m available funding). Currently closed for applications but may get extended. Full details are available on the Governement Website >

Timescale: Schemes are scheduled to close in March 2023 – rumours of possible extension to run into 2025

Criteria: Private homeowners with income of less than £30,000 or on specific means tested benefits living in a property rated with an EPC of E, F or G. HUG only applies to properties in “off mains gas” grid areas.

Measures Included: External wall insulation and all other forms of insulation (internal wall, cavity, loft, underfloor, solid floor, pitch roof, flat roof, room in roof, windows, draft proofing), Solar PV, Low temperature renewable heating (Air Source Heat Pumps) and in homes where low temperature heat pumps + high temperature heat pumps, solid biomass, and high retention electric storage heaters where appropriate.

Focus: Low income families living in low energy performance homes in England.

Energy Efficient Scotland – Area Based Schemes (EES-ABS)

Introduction: The Scottish Government is committed to reducing fuel poverty and improving the energy efficiency of housing in Scotland. The Home Energy Efficiency Programmes for Scotland (HEEPS) Launched in April 2013 It now goes under the name of Energy Efficient Scotland (EES).

Scottish Government grants for fuel poverty and energy efficiency programmes are administered through Area Based Schemes (EES: ABS) which are delivered by local authorities targeting fuel poor areas. They do so by providing a range of insulation measures whilst focussing on harder to treat properties requiring more expensive interventions such as solid / external wall insulation which can be as much as £20k per property and also be topped up with a highly competitive loan.

Timescale: HEEPS (now EES) opened in 2013. Currently no close date to the scheme has been announced.

Criteria: Each Local Authority has its own property based eligibility criteria. Council tax codes and means based assessment are also taken into account.

Measures Included: Insulation (external wall insulation, internal wall, cavity, loft, underfloor, solid floor, pitch roof, flat roof, room in roof, windows, draft proofing),  heating, Solar PV & battery storage, energy efficiency.

How To Access: More information can be obtained vis the Scottish Government Website >

Social Housing Net Zero Heat Fund (SHNZHF) Scotland Only

Introduction: The Social Housing Net Zero Heat (SHNZHF) fund is a Scottish fund aimed at reducing fuel poverty and providing an outcomes and results-driven infrastructure investment programme. As such, projects are required to meet a strict criteria that must meet at least one of the 5 following funding invitation priority “themes”:

  1. the potential to deliver a significant reduction of greenhouse gas emissions (MtCO₂e) and energy consumption
  2. the ability to secure other sources of funding/finance that make a minimum of 50% contribution towards the cost of final delivery costs of the project
  3. the potential to have a positive and significant social impact on Scotland
  4. the ability to deliver zero emissions heating systems and energy efficiency measures that can provide savings for social housing tenants
  5. the provision of a clearly set out case for the requirement of and value added from grant support

There are a number of application windows to submit any bids but projects must be fully designed and specified before any application can be submitted. The Fund will contribute up to 50% of the capex (up to £10m) for the project although a further interest free loan is available.

Timescale: Scheme opened in February 2022 and closes in March 2024. Installation of measures required by March 2027.

Criteria: Social housing providers with projects that will be delivered in Scotland. Strict project criteria dependent on the appropriate “Theme”..

Measures Included: Zero emissions heating solutions are included under Theme 1, Fabric First Energy Efficiency only Projects are included under Theme 2.

How To Access: Full information is available on the Scottish Government Website: Social Housing Net Zero Heat Fund >

Green Heat Network Fund (GHNF) England Only

Introduction: The Green Heat Network Fund (GHNF) is a three-year, £288m capital grant fund. The fund is to Support the development of low and zero carbon (LZC) heat (and cooling) networks. It is a core element of the Government’s Heat Network Transformation Programme (HNTP).The aim is to continue to develop and grow the heat network market and the GHNF also looks to address some of the challenges of decarbonising the UK’s heat sector. The heat network must provide a minimum end customer demand of 2GWh/year. For rural (off-gas-grid) networks, a minimum number of 100 dwellings must be connected. The fund will contribute towards up to 50% of the construction Capex.

Timescale: Scheme opened in March 2022 and runs to March 2025.

Criteria: Open to organisations in the public, private, and third sectors in England only

Measures Included: Feasibility studies, building of energy centres, network distribution & of heat network pipework. Energy efficient construction can include external wall insulation.

How To Access: Full information is available on the Government Website: Green Heat Network Fund >


INCA are grateful to E-ON Energy for their presentation to the membership – the context of which was used to put much of this general introduction to EWI funding streams in domestic retrofit together.

For further information or ECO4 funding enquiries please contact E.ON direct: socialhousingsolutions@eonenergy.com

EWI Retrofit & PAS2035