Labour has announced its Warm Homes Plan. Here’s what it means for energy bills and the climate crisis

Prime minister Keir Starmer has promised Labour’s £15 billion Warm Homes Plan will “slash energy bills and lift up to a million people out of fuel poverty” as the long-awaited plan was unveiled on Tuesday (20 January).

The government plan is aiming to make it easier for millions of families to get solar panels, batteries, heat pumps and insulation to cut energy bills and reduce emissions driving the climate crisis.

The UK has one of the oldest and leakiest housing stocks in western Europe and almost 29 million homes will need to be retrofitted before 2050, according to the UK Green Building Council, if the country is to deliver on net-zero promises.

The Warm Homes Plan will allow families who cannot afford to retrofit their homes to apply for government-backed, low and zero interest loans to install solar panels, batteries and heat pumps in what the government has billed as a “rooftop revolution”.

The government has said the plan will help lift up to one million families out of fuel poverty and tackle long-term energy costs, following Labour’s intervention to take an average of £150 of costs off energy bills for all families this April.

Prime minister Keir Starmer said: “A warm home shouldn’t be a privilege, it should be a basic guarantee for every family in Britain. 

“Today’s plan marks a turning point. It will help to slash energy costs and lift up to a million people out of fuel poverty. 

“This is a government bearing down on the cost-of-living crisis. By driving bills down for good and upgrading millions of homes, we’re giving people the security and the fair shot they need to get on in life.” 

What is in the government’s Warm Homes Plan?

The Warm Homes Plan will deliver £15 billion of public investment, rollout upgrades to up to five million homes which ministers claim could triple the number of homes with solar panels, helping Brits save on energy bills and lift up to a million families out of fuel poverty by 2030.  

The investment, which includes allocations for devolved governments in Scotland, Wales and Northern Ireland, will see new homes built with solar panels as standard alongside the Future Homes Standard which is set to be implemented in early 2026.  

Ministers have also said the plan covers all type of households, with upgrades currently often out of reach for some low-income families and more difficult for households living in flats.

Meanwhile, social housing residents could see upgrades to “entire streets at the same time”, the plan said.

Homeowners will be able to apply for government-backed, low and zero interest loans to install solar panels, batteries and heat pumps. The government said more detail on how consumers can access the loans will be laid out later this year, following further engagement with the finance sector and consumer groups.

Low-income households and those in fuel poverty could receive support that would cover the full cost of having solar panels put on their rooftop, or insulation installed.

Low-income families will be able to receive ‘free of charge packages’ of upgrades to homes backed by £5bn in public investment. That could see fully funded installations of solar panels and a battery worth between £9,000 and £12,000 for some families.

There will be a universal £7,500 grant for heat pumps while the plan also includes protections for renters and 1.6 million children living in damp and mouldy private homes.

The plan will also introduce a new Warm Homes Agency to improve people’s experience of home upgrades. The new agency will bring together existing functions from across the regulator Ofgem and other government arms-lengths bodies to help navigate the current complex system of carrying out works and dealing with faulty installations.

Labour also claims the plan will create 180,000 additional high-quality, future=proofed jobs. Ministers are committing £90 million to the heat pump supply chain in a bid to ensure at least 70% of pumps installed in the UK are made in this country.

Energy secretary Ed Miliband said: “It is a scandal that millions of people in our country do not have the security of a home that is warm, affordable and safe.  

“With this investment, we embark on a national project to turn the tide – waging war on fuel poverty and taking another step forward in tackling the affordability crisis for families throughout Britain.”

What has been the reaction to the Warm Homes Plan?

Energy providers, green groups and banks have praised the Warm Homes Plan.

Greg Jackson, founder of Octopus Energy, said the plan is a “really important step forward”. He added: “Electrifying homes is the best way to cut bills for good and escape the yoyo of fossil fuel costs.”

Energy UK, UK Finance and the Trades Union Congress (TUC) praised the government for offering long-term certainty on jobs

Kate Bell, TUC assistant general secretary, and co-chair of the Warm Homes Taskforce, said: “If delivered right, this programme of investment can deliver quality jobs in every corner of the country and bring down bills.” 

There was also praise for measures to reduce the need to import gas – rising energy bills in recent years have been attributed to the war in Ukraine and called into question the UK’s energy security.

Tessa Khan, executive director of Uplift, said the plan “will reduce our exposure to price shocks and mean we are not at the mercy of bad actors like Putin or the whims of Trump” if it is properly implemented.

Simon McWhirter, CEO of the UK Green Building Council (UKGBC), said the plan was necessary to address the changing climate.

“UKGBC has long issued a clarion call for a long-term national strategy to tackle the challenge of retrofitting all our homes and commercial buildings at scale, and we are pleased to have worked alongside industry and government to help shape its development,” said McWhirter.

“By harnessing abundant solar energy and heat pump technology to both heat and cool buildings, the plan will help future-proof against rising bills and our rapidly warming climate.” 

Read more:

• Neighbours band together to tackle energy bills and show how climate action starts at home
• This 1930s three-bedroom semi-detached family home will see tenants save big on energy bills
• Energy bills to remain ‘stubbornly high’ in January: ‘Winter cruelly exposes the cost of a cold home’

But can Labour deliver?

While the Warm Homes Plan attracted plenty of praise, questions remain on whether it can be delivered.

The chief concern is whether the UK has skills and staff to carry out works amid previous botched government schemes.

Last year the National Audit Office found 98% of homes with external wall insulation installed under the government’s ECO4 scheme require work to correct major issues that will cause problems such as damp and mould.

Jonathan Bean, Fuel Poverty Action spokesperson, told Big Issue: “Millions of people need warmer homes and lower bills, and we would love to believe that this plan will work.  

“However the massive shortage of skills and poor quality control means that there is a huge risk of bad work being done yet again. The current scheme Eco4 has failure rates of up to 98%, with victims ignored by the government for years, and people left in cold, damp, mouldy homes.

“We urgently need a big investment in skills training, better protections for residents, and a fairer deal for those who don’t have private outside space for heat pumps and solar panels.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, said the Warm Homes Plan has the potential to save lives, cut NHS costs and permanently slash energy bills for those in fuel poverty.

But Francis said consumers need a warm homes guarantee, particularly if they are taking out loans to cover the cost of installing green measures.

“Above all, any use of public funds must come with a warm homes guarantee, built around quality advice on the right installations to deliver, enhanced consumer protections and a promise that every upgraded home will see bills come down,” said Francis.

Bean also said families need guarantees. He added: “We fear that cowboy solar firms will do bad installs that don’t deliver the promised savings and leave people in debt.”

The Fuel Poverty Action spokesperson also raised concerns that the plan would not help people living in conversion flats, who already experience significant fuel poverty.

Bean also raised concerns that the universal heat pump offer would mean “millionaires in detached houses will be given £7,500 they do not need”.

Questions on whether the plan is delivered remain. Francis said: ”If delivery matches ambition then this could be the biggest breakthrough in tackling fuel poverty in a generation, but now the hard work begins.”

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