Could home-grown innovation be the fuel to delivering on the Warm Homes Plan?

While there are many progressive measures, key gaps remain. The de-prioritisation of insulation remains a concern. The UK has upgraded many homes already  (67% of lofts are insulated, and 71% of cavity walls), but fabric measures still have a place in a holistic built environment strategy.

Second, while there are measures to support low-income households and able-to-pay consumers, there may be a ‘missing middle’: people who don’t qualify for grants but need more support than just a low-cost loan, or people who own apartments in multiple-occupancy buildings.

Further, while the Energy Performance Certificate (EPC) is being reformed, it remains to be seen whether the new regime will be effective in measuring, monitoring and implementation. Beyond the EPC, opportunities to strengthen how outcomes are defined, tracked and learned from over time are essential. It is hard to improve what we do not measure.

Last but not least, the plan has no proposal for rebalancing electric costs vis-à-vis gas, which is essential to the uptake as well as the cost-effectiveness of domestic electrification.

“SMEs – the very builders who understand their local streets best – frequently report being locked out because they lack the administrative muscle to navigate complex grant bureaucracies”

The plan is being touted as ‘the national retrofit strategy’. While it does provide the necessary policy context and direction of travel for the British housing stock, the plan doesn’t map out an intelligible user journey for homeowners and occupiers. It is still a fragmented patchwork: insulation here, solar there, batteries later, etc. People won’t sign up for retrofit until it’s easy to understand, affordable and practical to execute.

This is where the local ecosystem comes in: those at the frontlines of delivery and execution. While there is a much-needed influx of funding to local authorities who are recognised as key partners, there are others that need to be recognised: small and medium enterprises (SMEs) and innovators.

They are the ones who solve the last-mile problems and understand place-based enablers and constraints. A Victorian terrace in Manchester requires a different solution to a 1960s tower block in London or a heritage building in a conservation area in Cambridge.

During our recent research conducted in collaboration with Cambridge City Council, a recurring frustration emerged from the local supply chain. SMEs – the very builders who understand their local streets best – frequently report being locked out because they lack the administrative muscle to navigate complex grant bureaucracies. For the Warm Homes Plan to succeed, local authorities must ensure procurement routes are genuinely accessible to these smaller players.

If local authorities and SMEs are the engine of delivery, innovation could be the fuel. Investment in UK-based climate tech companies has surged by 24%, totalling £4.5bn in 2024. The built environment only accounted for 4% of those investments, even though it accounts for 16% of the emissions.

According to estimates by a private trade association, RetrofitTech accounts for approximately 10% of the exits in the startup space and employs thousands of people. Therefore, there is need to direct more funding into this space.

“Many a rubbish bin could be lined with scrapped retrofit policies: the Zero Carbon Homes standard, the Green Deal financing, Green Homes Grant, ECO4...”

The plan does acknowledge the need to enable innovation: it proposes a pilot retrofit panel to signpost innovative companies toward certification, supported by a UKRI ‘sherpa’ – a dedicated organisation tasked with helping companies navigate the process to approval. While this is a small part of the overall plan, and currently under the radar due to all the talk surrounding the flashy headline figures, it is a key acknowledgment of the innovation ecosystem as an accelerant.

Agile startups are already solving specific issues that the plan’s big-picture ambition cannot address piecemeal. At the Cambridge Institute for Sustainability Leadership (CISL) where I work, we support a number of these through our Canopy innovation community.

For instance, Decent Energy tackles the performance gap by optimising decentralised assets like solar and batteries in real time. Its software manages energy use based on grid intensity and weather, ensuring that the hardware actually delivers the promised reduction in bills. Planarific addresses measurement gaps by using AI to convert aerial and ground-level imagery into accurate 3D building models, allowing local authorities and SMEs to move from guesswork to precision.

Many a rubbish bin could be lined with scrapped retrofit policies: the Zero Carbon Homes standard, the Green Deal financing, Green Homes Grant, ECO4. Money and schemes were always thrown at the grim problem of the UK’s cold, leaky homes (albeit not enough). But they lacked a coherent system and a compelling case for consumer action to deliver on the outcomes.

The Warm Homes Plan could begin to address some of the systemic barriers to delivery and innovation. Beyond expanding existing schemes, it could redesign the market so that novel technologies, along with tried and tested ones, can scale.

An integrated approach that brings national policymakers, local authorities, businesses, innovators and communities together – like CISL’s Living Lab – is essential. We have the plan, now it’s time to execute it.

Anum Sheikh, housing policy expert, Cambridge Institute for Sustainability Leadership