After years of industry anticipation, the government has finally unveiled the details of its £15bn Warm Homes Plan. While the significant capital investment is a major milestone, the strategy reveals a concerning pivot: moving away from a ‘fabric-first’ philosophy toward ‘installation-light’ technologies. In this article, our Managing Director explores why trading building physics for political expediency is a dangerous gamble and outlines how we can ensure retrofitting delivers genuine comfort without locking households into higher bills.
After two years of delays and mounting industry anxiety, the government has finally published the details of the £15bn Warm Homes Plan. While the headline investment is significant and undeniably welcome, the strategy signals a distinct pivot from engineering logic to political expediency.
The plan represents a move away from a “fabric-first” approach and towards “installation-light” technologies like solar panels and heat pumps. As a strong advocate for electrification, I believe this is a risky game. Delivering pragmatic, cost-effective retrofitting requires us to respect building physics. If we apply measures indiscriminately to leaky homes, we risk locking residents into higher bills and fuelling another cycle of “failed scheme” headlines.
The Highlights: What’s in the Warm Homes Plan?
- Low-Income Households (£5 Billion): Fully funded solar, battery, and insulation packages delivered via the Warm Homes: Local Grant and Social Housing Fund.
- Homeowners (£2 Billion): Low- and zero-interest consumer loans to meet upfront costs for clean tech.
- Heat Pumps (£2.7 Billion): The Boiler Upgrade Scheme (BUS) grant is extended to 2030.
- Air-to-Air Heat Pump Offer: For the first time, grants of £2,500 are available for air-to-air units that can provide both heating and active cooling.
- Renters / Landlords: Minimum Energy Efficiency Standards (MEES) are back—landlords must hit EPC Band C by October 2030.
- New Builds: Solar PV and clean heat to be standard from 2026 under the Future Homes Standard.
- Warm Homes Agency: A new body created to consolidate fragmented functions and streamline consumer support.
Install the Tech but not Over Fabric
The Plan explicitly admits this strategic shift, stating that insulation measures, particularly solid wall insulation have become “less viable” due to supply chain cost increases. It argues that technologies like rooftop solar and batteries now offer “significantly more cost-effective routes” to reducing energy bills.
While valid in some contexts, this logic risks “throwing the baby out with the bathwater.” We are witnessing a pivot from engineering rigour to “installation-light” gadgets that look good on a brochure but may fail to deliver comfort in a draughty home.
Fabric and ventilation must be the foundation of any successful retrofit. Ignoring them in favour of “headline” tech gadgets risks creating cold, unhealthy homes that are expensive to run.
The “Bad Blood” of ECO & External Wall Insulation
The government’s reluctance to fund fabric is driven largely by failures in previous schemes. The Plan reveals that audits of External Wall Insulation (EWI) under ECO4 found “unacceptably high levels of non-compliance,” with a staggering 92% of installations failing to meet standards. This represents only a small percentage of all ECO4 projects, many of which were delivered to a high standard.
EWI has caused issues due to poor design and “cowboy” installation, that has often resulted in damp and mould. Furthermore, EWI is not always financially viable and is not always required to facilitate a heat pump.
However, using the “bad blood” from EWI failures to de-prioritise other lower-cost, lower-risk fabric measures is where I take issue. Colin King – co-author of PAS2035 and Parts C, F and L of the Building Regulations – has gone on record to point out the flaws in the Govt reporting, although this is largely absent in the media coverage. He pointed out “… the majority of the failures were undertaken by contractors who had been banned by Trustmark, yet this is not even mentioned [in the report]”.
The government is using EWI defects as an excuse to ignore “quick wins” like basic loft and cavity insulation. We must ensure a heat pump can run efficiently by fixing the basics first.
EPC Reform: Partial response published today (21st Jan 2026) but don’t hold your breath
The long‑standing reliance on a single EPC Band C target has repeatedly distorted retrofit decisions, often blocking sensible low‑cost upgrades or penalising heat pumps because the current EPC methodology is tied to outdated assumptions about energy prices. This has created perverse incentives and slowed progress.
The government has now confirmed that regulations will be introduced in 2026 to deliver new‑style domestic EPCs and update the rules on when EPCs are required. This reform replaces the existing single cost‑based Energy Efficiency Rating with four clearer headline metrics that give a more rounded picture of building performance:
- Energy Cost – Still prioritising consumer running costs.
- Fabric Performance – A stable measure reflecting the underlying efficiency of the building fabric.
- Heating System – Offering clearer insight into the benefits and implications of low‑carbon heating.
- Smart Readiness – Assessing how well a home can support flexible, smart technologies.
These are supported by new secondary metrics, including Delivered Energy (Energy Demand) and a secondary carbon‑based metric, helping align EPCs with real‑world performance and decarbonisation pathways. The legacy EER will remain temporarily for comparison and regulatory continuity.
These reforms are a welcome shift towards building physics and away from simplistic scoring, but the benefits will take time to flow through. Until the new Home Energy Model is fully implemented, EPC‑driven retrofit risks continuing to misdirect investment and hinder the transition toward fabric‑first, electrification‑ready homes.
MEES and the “Paper C” Problem
The return of MEES requiring private landlords to hit EPC Band C by 2030 is a headline victory for renters. However, without rigorous policing, this risks becoming a tick-box exercise. The current RdSAP methodology is too easily manipulated by unscrupulous assessors who “fudge” evidence to achieve a rating. Unless regulation is tightened to stamp out this abuse, MEES will deliver paper certificates rather than genuine warmth for the millions of renters in fuel poverty.
The Flaw in “Low Income” Eligibility
While focusing on low-income households is correct, the current criteria create a damaging “cliff edge.” The arbitrary income cutoff, combined with the crude EPC target, leaves many financially stretched families without support.
Consider this inequity:
- The Struggling Family: A couple with two children, one working full-time and the other part-time on the living wage, might earn a combined £37,884. After paying for childcare, rent/mortgage, and bills, they are struggling to make ends meet—yet they likely wouldn’t qualify as a “low income” household.
- The Asset-Rich Singleton: Conversely, a single person who has inherited a mortgage free home and works three days a week earning £35,000 would qualify for the grant.
This system neglects some of the most hard-working families in our society.
Reliance on over-stretch under-resourced local authorities and housing associations
Reliance on Local Authorities to deliver this funding is a bottleneck. Many councils are underfunded, lack in-house retrofit expertise, and struggle to identify which homes to target, leading to inevitable delays and measures not being installed.
Why not apply Element-Based “Backstop” like new build?
We could use the whole-house EPC target in conjunction with an element based standard, similar to the “notional dwelling” concept in new build SAP.
Instead of asking “Does this house hit Band C?”, we should ask: “Is this specific element (e.g. wall or loft) below the modern backstop value?”.
- Targeted Upgrades: If an element is failing, it becomes eligible for an upgrade. This identifies specific failing components rather than relying on generic property ratings.
- Paired Funding: This approach facilitates “blended funding.” A provider could use one grant to bring walls up to standard and a separate grant (like the Boiler Upgrade Scheme) for the heating system.
- Respecting Fabric First: By setting backstop values for insulation and ventilation, we ensure the basic fabric is sorted before adding advanced tech.
Conclusion
Electrification and technology are the future, but Physics is the law! Ignore fabric efficiency and ventilation at your peril.
The investment in the Warm Homes Plan is a vital step forward, but the strategy could be much, much better. It needs to come to fruition ASAP; the long gaps we have become used to between announcement and delivery risk further damaging our supply chain. Over 6,000 skilled jobs have already been lost due to the “cliff edge” of previous schemes. The fabric measures industry that has been grown over the past 10-20 years has been summarily placed in jeopardy, as the IAA has pointed out.
If we rely on complex consumer loans or flawed targets, high-quality firms will go under, leaving the door open for “cowboys” to deliver substandard work. To succeed, we must stop chasing certificates and start respecting the laws of physics. Tech is the future, but fabric must be the foundation.