What is the Social Housing Decarbonisation Fund?
The Social Housing Decarbonisation Fund (SHDF ) is available for social housing providers to improve the energy efficiency of social homes. Homes needed to be below Energy Performance Certificate (EPC) C to be eligible for entry.
What is the Government’s plan?
The UK Government pledged £3.8bn to the Social Housing Decarbonisation Fund over a 10-year period to help landlords with the costs of decarbonising their affordable housing.
Approximately £240m has already been allocated to an earlier SHDF demonstration and Wave 1 of the funding during 2021/2022. The UK Government has said that a further £800m is going towards Wave 2
What happened in Wave 1?
The projects were led by Local Authorities in England. Private registered providers of social housing who were part of a consortium with a Local Authority in England, were also welcome to apply. The scheme allowed Low Carbon Heating to be installed, and new heating systems had to reduce the bills in isolation compared to the existing system.
Dwellings under the scheme could benefit from many decarbonisation fund benefits. These include cavity wall insulation and loft insulation, as well as internal and external solid wall insulation. Window and door replacement were also allowed, together with the installation of renewable energy systems such as heat pumps and solar panels. Devices and systems to improve water efficiency within the property were also included, in addition to more efficient heating systems and controls.
Wave 1 closed in October 2021 and all improvements need to be completed in January 2023.
What will happen under Wave 2?
Wave 2.1 opened on 29 September 2022 following a ‘Demonstrator’ who was awarded around £62m to initially test innovative approaches to retrofitting. Wave 2.1 closed in November 2022.
Under Wave 2, registered providers, together with non-registered providers who were registered charities could apply as part of a consortium that was led by a local or combined authority or a housing association. Applicants were required to enter into a grant agreement. Applicants were also required to agree to a data sharing agreement.
What does this mean for tenants and landlords?
According to Government guidance [1], successful applicants will be notified in late February/Early March 2023, and projects will start from March 2023. This means that landlords will be able to retrofit their properties and should be thinking about how they will meet deadlines. Under Wave 2.1, applicants must fund at least 50% (rather than the previous 30%) of the cost. Landlords will need to ensure that such funds are available to start work in March 2023.
Under Wave 2.1, tenants can look forward to decarbonisation fund benefits such as reduced bills and better insulated homes. Low temperature heat pumps are expected to be the preferred installation, and tenants could see a range of energy saving, energy efficient decarbonisation fund benefits, including devices and systems installed in their property.
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