Social housing provides affordable, stable accommodation for those on low incomes across the country. Official government data from both private and local authority social housing providers reveal that around 4.5 million homes across England are social homes1. The sector is vital for those who cannot afford to rent or buy a home on the market.
Social housing must be front and centre of any effort to decarbonise domestic energy consumption, while making sure that tenants are living in warm, comfortable and affordable environments.
Currently, 13% of households are in fuel poverty in England, with many homes requiring substantial support to increase efficiency levels and reduce energy bills2.
A significant number of residents living in social housing are connected to a district or communal heat network for their central heating and hot water provision. Government data shows heat networks provide heating and hot water to 150,000 housing association homes in England3. Other organisations, including the Social Market Foundation, have used EPC data to estimate that up to one in twelve social homes are connected to a heat network4.
Why heat networks?
Heat networks provide a brilliant way to decarbonise homes and buildings at scale. They are a popular choice for high density areas, providing heating and hot water to multiple buildings at once. The heating method removes the need for individual boiler units in every home, minimising maintenance costs and disruption to residents.
Communal heating schemes are also a practical solution for tower blocks and apartment buildings. The systems are scalable, cost-effective to install, and relatively easy to decarbonise due to there being only one central heating system as opposed to one in each dwelling.
What challenges do heat networks face?
Heat networks are not new technology, and some of the systems working today were installed decades ago. The Heat Trust highlighted that many London heat networks were installed in high-rise flats during the 1960s and 1970s5. As a result, much of the heat network infrastructure in operation today is old and inefficient, resulting in sub-optimal outcomes for residents. The systems can be unreliable, inefficient, and can result in higher energy bills for consumers. This is particularly alarming for social housing residents who are already financially vulnerable.
When the Government last measured in-situ heat network performance in 2009, it was revealed that the majority of existing heat networks are operating at around 35-45% efficiency levels6.
Additionally, while the Government and Ofgem are working to better protect heat network customers from volatile energy bills, customers connected to the systems have historically not had the same protections as those with a standalone gas boiler system.
How the Heat Network Efficiency Scheme can help
The Heat Network Efficiency Scheme (HNES) funds improvements to existing district and communal heat networks to elevate their performance, reduce carbon emissions, and reduce customer detriment. Improving the efficiency of existing heat networks will also in turn improve consumer confidence in the technology.
The Government is investing in heat networks as part of the UK’s journey to achieve Net Zero by 2050, and social housing tenants are set to benefit. The support will ensure that social housing providers get the help they need to improve the performance of their tenants’ heating provision, without needing to pass on costs to those on lower incomes. HNES can provide up to (but not including) 50% of eligible capital costs for improving heat networks, and up to 100% of eligible costs for optimisation studies.
So far, 128 district and communal heating schemes connected to social homes have received both capital and revenue support from HNES, benefiting thousands of social housing tenants. In our first funding round alone, over £11 million was provided to local authorities and housing associations for capital improvements to district and communal heating schemes. This included Notting Hill Genesis, who received £3.6 million for capital improvements to their heat networks serving over 800 social tenants. This funding unlocked improvements to pipework and insulation and supported the installation of more efficient control systems in individual homes. Over in Wales, the Duffryn District Heating System, operated by Newport City Homes, was awarded over £3.7 million in Round 3 to improve the performance of a network serving 970 homes, local schools and businesses.
As we decarbonise the way we heat our homes and the Government aims to reach 100% clean power by 2030, it is crucial that the energy transition does not leave anyone behind. Net Zero must succeed in not only avoiding the worst effects of climate change but must also harness the financial benefits of a more reliable, secure and lower carbon energy system. HNES is here to make sure that no consumer is left behind as we transition to more sustainable heating technologies, focusing on where customer need is the greatest.
Interested in HNES? Learn more about the support available and apply for funding on our HNES webpage.
Footnotes
[1] Social landlords continue to build new homes, RSH statistics show – GOV.UK
[2] Annual fuel poverty statistics in England, 2024 (2023 data)
[3] ‘Housing Associations and Heat Network Regulation’ (2024) | National Housing Federation
[4] We can’t keep heating like this: A fairer deal for heat networks – Social Market Foundation.