How Construction is Affected by the UK Warm Homes Plan

The UK Government has launched the largest home upgrade programme in the country’s history, committing £15bn (US$20bn) in public investment to retrofit up to five million homes.

The plan aims to install solar panels, heat pumps and battery storage by 2030.

The Warm Homes Plan, announced by Prime Minister Keir Starmer and Energy Secretary Ed Miliband on 20 January, presents a significant pipeline of work for the construction and retrofit sectors.

Aiming to lift one million families out of fuel poverty and accelerate heating electrification, the initiative responds to the legacy of volatile gas prices.

For the construction industry, the plan signals a shift towards large-scale delivery models. The government intends to focus on neighbourhoods rather than individual properties.

This means social housing residents could see entire streets upgraded simultaneously. This approach promises to streamline logistics and installation workflows for contractors.

Low-income families stand to receive fully-funded installations worth up to £12,000 (US$16,096).

Furthermore, new protections for renters will require landlords to upgrade properties, potentially increasing demand for retrofit services in the private rental sector.

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Funding and supply chain growth

Beyond social housing, the plan outlines support for the broader market. All UK homeowners will gain access to zero and low-interest loans for solar installations.

The government is promising to triple rooftop solar capacity by 2030. A £7,500 (US$10,061) universal grant for heat pumps will be available, including the first government support for air-to-air heat pumps.

Regulation changes will also impact new build specifications. The government has committed to implementing the Future Homes Standard in early 2026.

This requires solar panels as standard on all new builds. This follows a period where home insulation installations fell by more than 90% between 2010 and 2024.

To support these installation targets, the plan includes a target for 70% of heat pumps installed in Britain to be manufactured domestically.

Government investment in the heat pump supply chain will triple to £90m (US$113m), with 180,000 additional jobs in energy efficiency and clean heating projected by 2030.

Charlotte Lee, Chief Executive Officer (CEO) of the Heat Pump Association UK, describes the funding as "a strong signal to both industry and consumers that the shift to clean, electrified heat remains important for this Government".

The solar sector also appears ready to scale operations. Solar Energy UK's Policy Director, Gemma Grimes notes that almost two million small-scale solar installations have already been completed.

"The industry stands ready and able to build millions more by 2030," Gemma says.

Energy sector welcomes demand

Major energy companies have endorsed the plan as a catalyst for scaling deployment. Greg Jackson, Founder and CEO of Octopus Energy, the UK's largest heat pump installer, notes that international markets demonstrate the technology's viability.

"Electrifying homes is the best way to cut bills for good and escape the yoyo of fossil fuel costs," Greg says, adding that with proper finance and simplified regulations "heat pumps will increasingly be the best solution for many homes – as they are in other countries like Sweden, Norway and Finland".

Chris O'Shea, CEO of Centrica, emphasises his company's readiness with 7,000 unionised engineers.

"To achieve net zero, we must start where it matters most - in people's homes," Chris says. "That means making the transition simple, affordable and within reach for every household."

Elsewhere, E.ON's UK CEO Chris Norbury highlights the importance of combining generation and storage with time-of-use tariffs.

"This approach puts control in customers' hands, pounds in their pocket and turns the energy system into something that works for people, not the other way around," Chris says.

Delivery agency and future outlook

The plan will be delivered through a new Warm Homes Agency, consolidating functions currently scattered across bodies.

Jonathan Brearley, CEO of Ofgem, confirms that existing experts would transfer to the new organisation to deliver "a clearer, more efficient system".

Adam Scorer, CEO at National Energy Action, calls it "a welcome, landmark occasion," though he cautions that "there is a lot of work to be done".

Whether the ambition can be realised depends on overcoming longstanding barriers to retrofit delivery, including skills shortages, supply chain constraints and consumer hesitancy.