Current Grants and Incentives for Reducing Household CO₂ Emissions in the UK (2025)

As the UK intensifies its efforts to achieve net-zero carbon emissions by 2050, homeowners have access to a variety of grants and incentives aimed at reducing CO₂ emissions. These initiatives support the transition to energy-efficient homes, promote the adoption of low-carbon heating systems, and enhance overall energy performance.

1. Boiler Upgrade Scheme (BUS)

• What It Is: A government grant designed to help homeowners replace outdated gas or oil boilers with low-carbon heating solutions, such as air-source or ground-source heat pumps.​

• Funding: Up to £7,500 per property.

• Eligibility: Available to homeowners and landlords in England and Wales

• Recent Developments: The scheme's funding has been increased to £295 million for the 2025/26 financial year, aiming to accelerate the adoption of heat pumps across the country.

2. Home Upgrade Grant (HUG)

• What It Is: Provides energy efficiency upgrades and low-carbon heating to low-income households, particularly those off the gas grid.​

• Funding: Up to £15,000 for energy performance improvements, with an additional £15,000 available for low-carbon heating installations.

• Eligibility: Homeowners and tenants with properties rated between EPC Bands D and G.​

• Regional Allocation: Funding is distributed across various regions, including the West Midlands (£152.7 million), South East (£161.2 million), and North West (£83.8 million), among others. 

3. Great British Insulation Scheme

• What It Is: A government-backed initiative aimed at improving home insulation to enhance energy efficiency.​

• Funding: Partial or full funding for measures such as cavity wall, loft, and floor insulation.

• Eligibility: Households with poor insulation, particularly those with low income.​

• Goal: To assist up to 700,000 families in installing insulation improvements by March 2026. 

4. Social Housing Decarbonisation Fund (SHDF)

• What It Is: Supports local authorities and social housing providers in upgrading energy performance in social housing.​

• Funding: Approximately £1.8 billion allocated over the 2025/2026 to 2027/2028 period.​

• Impact: Expected to upgrade around 90,000 homes, creating approximately 13,000 jobs annually in the green energy sector.

5. Smart Export Guarantee (SEG)

• What It Is: Allows homeowners with renewable energy systems, such as solar panels or wind turbines, to earn money by exporting surplus electricity back to the grid.

• Eligibility: Homeowners with installed renewable energy systems.

• Benefit: Provides a financial incentive for generating renewable energy, supporting both environmental goals and offering a return on investment. ​

6. Local Authority Retrofit Grants

• What It Is: Regional funding schemes provided by local councils to improve energy efficiency in homes.​

• Funding: Varies depending on location and council budgets.​

• Eligibility: Homeowners and landlords in designated council areas.​

• Goal: To enhance energy performance and reduce emissions at the local level. ​

7. Public Sector Decarbonisation Scheme

• What It Is: Provides funding to public sector organizations to improve energy efficiency and reduce emissions in public buildings.​

• Funding: £1.17 billion allocated over the 2025/2026 to 2027/2028 period.

• Impact: Supports the transition to low-carbon heating solutions and energy-efficient infrastructure in public sector buildings.

8. Warm Homes: Local Grant (WH:LG)

• What It Is: A government-funded scheme delivered by local authorities to provide energy performance upgrades and low-carbon heating to low-income households.

• Funding: Up to £15,000 per property for energy performance improvements, with an additional £15,000 available for low-carbon heating installations.​

• Eligibility: Low-income homeowners and private rental tenants with properties having an Energy Performance Certificate (EPC) rating between D and G. 

Conclusion

With a diverse array of grants and incentives available, homeowners in the UK have significant opportunities to reduce CO₂ emissions and enhance energy efficiency. Whether through upgrading heating systems, improving insulation, or generating renewable energy, these initiatives support the nation's commitment to achieving net-zero emissions by 2050. Homeowners are encouraged to explore these programs to find the best fit for their needs and contribute to a more sustainable future.