New research published this week has revealed the significant impact the Warm Homes Fund (WHF) project had, saving households a total of over £10 million – that’s £922 per household.
The project has delivered energy efficiency measures to fuel-poor households since September 2017 and will run until July 2024.
Measures delivered by the WHF included first-time gas central heating, air source heat pumps and energy and health-related advice and support.
It was funded by National Grid and administered by Affordable Warmth Solutions (AWS). The research was carried out by a consortium made up of Newcastle University, National Energy Action (NEA), and Energy Audit Company (EAC), with support from academics at University of Bristol.
The research found that significant energy savings were made for the households involved. Mean annual running costs dropped from £2,011 to £1,089 – so on average the installation of a new heating system saved households £922 per year. This was based on a fuel price figure calculated prior to the beginning of the energy crisis in October 2021.
Before the project started, just 18% of households were able to keep their whole homes warm when it was cold outside, this increased to three-quarters (76%) after work had been carried out.
Around 5,500 homes (35%) did remain in fuel poverty – as defined by the government’s Low Income Low Energy Efficiency (LILEE) metric – after improvements, however, they still saw significant savings. The average fuel poverty gap – the energy bill reduction that a fuel-poor household would need in order not to be fuel poor – dropped sharply from £699 to £121. This means that on average, where households remained fuel poor, their annual required running costs dropped by almost £600, greatly reducing the severity of their fuel poverty.
Jeremy Nesbitt, Managing Director, Affordable Warmth Solutions, said:
The report published by Newcastle University and its partners provides robust evidence that improving the energy efficiency of homes can provide immediate and tangible, positive outcomes for customers. We need to recognise this research has been undertaken during unprecedented rises in energy costs and despite this thousands of homes now use less energy, and have provided customers with an opportunity to live a warmer and more comfortable lifestyle. There’s still lots more to be done and I believe the blueprint on the delivery of future large-scale energy efficiency programmes can become part of the solution.
Helen Stockton, Research Manager, National Energy Action, said:
The energy and cost of living crises continue to affect low-income households and those in the least efficient homes. This research underlines the vital role of investment in energy efficiency and advice support to households struggling to keep warm, safe and well at home.
It has been a privilege to work alongside our consortium partners on the evaluation of the Warm Homes Fund. It has revealed the multiple and real benefits of making homes warmer, energy costs more affordable, and the transformational difference this can bring to people’s health and wellbeing, environment and the wider economy.
We hope the evaluation and blueprint will provide a valuable roadmap for the design of fuel poverty and energy efficient programmes of the future.
The project also showed how funding to help fuel-poor households can have a wider benefit for the economy. The total energy bill savings generated by the WHF, which can be regarded as an increase in household disposable income, was £10.8 million. As this money was subsequently spent by households again, a further £14.4 million of spending took place, demonstrating the positive economic impact of energy bill reductions on the wider economy. For every £1 invested in the WHF, a further £1.34 was stimulated in the wider economy.
Targeting low-income households produces a larger economic impact. By targeting low-income households, the WHF grants produced a greater boost in demand across the economy than if the funding had been targeted at middle-income households. Analysis shows that approximately £2 million more demand has been created by targeting low-income households.
Savings to the NHS generated by the WHF are estimated to be nearly £2.5 million a year, while the wider societal benefits are estimated at almost £42 million annually. Post-intervention, 48% of households reported that their physical health was better than before, and 39% of respondents reported that their mental health was better.
Download the Warm Homes Fund Evaluation final report and supporting documents
