Energy Efficiency

Funding streams

Retrofit can be expensive with large upfront costs and long payback times. Improvements will reduce your fuel bills which means that many measures will pay for themselves over time.

There are some grants and incentives that you may qualify for:

Clean Heat Grant (Boiler Upgrade Scheme)

VAT Exemption

Up to April 2027, the cost of some improvements will be free from VAT. This applies to the supply and installation of these. Costs of these measures can lower by between five and twenty percent. This exemption is applied for by a contractor who is:

  • installing energy saving materials (such as insulation)
  • installing grant-funded heating equipment.

A full list of exempt measures has not yet been published. There are some exemptions to the 0% VAT rate, such as double glazing and domestic battery energy storage.

Guidance on how to apply for the VAT exemption and the improvements covered

Green Mortgages

A green mortgage takes many forms but the two most common are:

  • A mortgage that rewards a person for buying or owning an energy efficient home (usually EPC A or B). The homeowner is rewarded as they are offered more favourable mortgage terms such as a lower interest rate or cashback upon sale
  • Money is lent at discounted rates to enable a homeowner to pay for green home improvements

Find out more about green mortgages and where to find them

Tax Relief

  • Retrofit measures can be eligible for Capital Gains Tax relief
  • This tax often applies when you own multiple properties such as Buy to let, second homes, inherited properties and you sell one
  • Always seek advice from a professional on tax issues
  • Find out more by accessing the government's Capital Gains Tax calculator.

Warm Homes Discount Industry Initiatives

  • Warm Homes Discount is on top of winter fuel grants
  • Funded by energy companies between October and March
  • Rebates of £140 to households in danger of fuel poverty
  • Varies slightly from supplier to supplier