Social Housing Decarbonisation Fund: Wave 2.2

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About this scheme

Wave 2.2 of the Social Housing Decarbonisation Fund will allocate up to £80 million of additional funds to eligible Social Housing Landlords, including local authorities and housing associations, so that they can install energy efficiency measures, such as insulation and heat pumps, in socially rented homes.

Wave 2.2 builds on Wave 2.1 of the Social Housing Decarbonisation Fund which launched in September 2022 to support the installation of energy performance of social housing in England.  £778 million of government funding was allocated for Wave 2.1 of the Social Housing Decarbonisation Fund in March 2023. 

Wave 2.2 is targeted at organisations that did not receive funding under Wave 2.1 and bidders will be required to deliver the upgrades between 2024 and March 2025.

The Application Portal will be open from Monday 20 November 2023 at 10am and will close on Friday 19 January 2024 at 23.59pm.  

Bidders will be required to contribute a minimum of £1 in match funding for every £1 of government grant funding.

Grant funding will be made available in the financial year (2024/2025), with match funding to be used to enable delivery through to March 2026.

The delivery window for the Social Housing Decarbonisation Fund Wave 2.2 will run to 31 March 2026.  All grant funding for the Social Housing Decarbonisation Fund Wave 2.2 projects must be transferred to the grant recipient and spent by 31 March 2025, meaning projects can use only co-funding in the final 12 months of delivery.  Applicants are therefore asked to submit applications only if they are confident they can meet these deadlines.

This scheme continues to support more social housing tenants, who will benefit from homes that are warmer and cheaper to heat, saving money on their fuel bills, as well as cutting carbon emissions, as part of the UK’s approach to delivering net zero in a way that reduces the burden on British families.

As Delivery Agent, Salix continues to provide assurance to the Department for Energy Security and Net Zero for the Social Housing Decarbonisation Fund Wave 2.1 and Home Upgrade Grant 2 in addition to the new Social Housing Decarbonisation Fund Wave 2.2. We continue to monitor and make refinements, responding to the feedback we receive, to ultimately help all successful grant recipients on their journey to supporting the net zero agenda.

Aims and objectives

Tackle fuel poverty: Reduce the number of households in Fuel Poverty by improving the energy efficiency rating of social homes below EPC Band C and reducing energy bills. On this basis, tenant energy bills must not increase because of the retrofit works, relative to what they would otherwise have been.

Reduce carbon emissions: Deliver cost-effective carbon savings to contribute to carbon budgets, and progress towards the UK’s target for net zero by 2050 by reducing CO2 emissions from social housing.

Support tenants: Improve the comfort, health, and well-being of social housing tenants by delivering warmer and more energy-efficient homes.

Increase the green economy: Support economic resilience and a green recovery in response to the economic impacts of Covid-19, supporting thousands of jobs.

Develop the retrofit sector: Create the conditions for growth in the retrofit supply chain capacity and capabilities, boosting productivity and innovation in the construction sector. Additionally, upskilling social landlords in retrofit to support future improvements to energy efficiency in the social housing sector.

Key differences

Key differences between Social Housing Decarbonisation Fund Wave 2.1 and Wave 2.2

In Wave 2.1, applications were required to include a minimum of 100 eligible social housing properties at EPC band D-G per bid. For Wave 2.2, applications with fewer than 100 eligible social housing properties at EPC band D-G may be considered, though strong justification as to why the application could not include 100 in-scope homes or join a consortium is required. It is expected that in such cases, bids should be as close to 100 homes as is possible.

Landlords who have been successful in receiving funding through Wave 2.1 of the Social Housing Decarbonisation Fund, and have signed a Grant Funding Agreement with the Department for Energy Security and Net Zero, either directly or as part of a consortia, will not be eligible to apply for Wave 2.2 with their stock.

All projects must be compliant with the updated PAS 2035:2023.

The delivery window for Wave 2.2 is two years, with grant funding only able to be spent in the first year (FY24/25). Therefore, successful grant recipients will be expected to spend 25% of co-funding by 31 March 2025 as a minimum, with the remainder spent by 31 March 2026.

Application support

The Social Housing Retrofit Accelerator is a fully-funded support service to help social housing providers across England successfully bid into Government’s Social Housing Decarbonisation Fund.

Please click here to visit the Social Housing Retrofit Accelerator support platform.