Starting 2026: energy prices, fuel poverty and the need for action

Wave 3 projects under the Warm Homes: Social Housing Fund (the successor to the SHDF) have been slow to start due to the previous wave overruns and procurement issues. If we’re serious about tackling fuel poverty and providing homes that are affordable, comfortable and healthy, retrofit must become business as usual, relying less on grant funding and focusing more on blending models that use private finance and existing budgets more wisely.

Encouragingly, more landlords are starting to look at portfolio investment strategies holistically, combining retrofit, maintenance, home comfort and new build strategies to create better homes for more people. Let’s see more of this in 2026.

Policy and support measures

The government’s expansion of the Warm Home Discount (WHD) to 2.7 million households has helped many this winter. We urge the government to go further and extend WHD to households without a direct relationship with an energy supplier, so customers on energy-as-a-service models can also benefit.

The removal of ECO levies from April 2026 will reduce monthly bills for households; however, this will be offset by the increased TNUoS (transmission network use of system) supplier costs. These costs are expected to increase by £2.7bn to £7.5bn from April 2026. Suppliers will have to pass on these increased costs to their domestic and non-domestic customers, adding around 5% to electricity bills.

“The cost of Ofgem’s debt relief scheme would be spread across all domestic customers, adding an estimated £3.23 to £5.13 per year to dual-fuel bills, a modest increase compared to the growing debt burden if no action is taken”

After years of partial oversight, the government has confirmed the timetable for heat network regulation. Consumer advocacy and redress began on 1 April 2025; the first tranche of formal rules started this year on 27 January, with Ofgem oversight and new consumer protections.

For many households already struggling with energy debt, any aid they receive often disappears into existing arrears, leaving them still unable to afford energy. To address this, Ofgem has proposed a debt relief scheme, to write off energy debt accrued during the height of the energy crisis (April 2022 to March 2024).

In its first phase, the proposed scheme would fully clear eligible debts for customers on means-tested benefits who have shown basic engagement with their supplier, with no cap on the amount written off. A second phase would extend support to other households in genuine difficulty, assessed through income and expenditure checks.

The cost of the scheme would be spread across all domestic customers, adding an estimated £3.23 to £5.13 per year to dual-fuel bills, a modest increase compared to the growing debt burden if no action is taken.

Looking ahead: clean power and energy security

There have been huge steps forward recently in flexibility, such as the Clean Flexibility Roadmap and the implementation of P415 and P483, new British electricity market codes that help to pave the way for much wider implementation of battery energy storage systems at lower cost.

What does this mean in practice? Homes with batteries and EVs can earn more by “flexing” at the right times, and when more of us flex, everyone benefits from a cheaper, more efficient system – an outcome the government’s roadmap is explicitly targeting. We also expect continued acceleration in battery installations as hardware costs fall and flexible revenue streams mature.

In the long term, the UK government’s commitment to delivering clean power will transform household energy security. As more homes adopt green technologies such as heat pumps, solar PV and battery storage, they will become less reliant on volatile fossil fuel markets. This shift means greater resilience against price spikes, more stable energy costs and the ability to heat and power homes more affordably.

However, recent statements by the Conservative Party and Reform UK signal potential rollbacks on clean energy support, particularly threats to withdraw subsidies and Contracts for Difference, which could undermine investment and leave the UK exposed to foreign gas markets.

That makes it absolutely vital that the current government’s momentum is maintained, ensuring that long-term infrastructure, incentives and green policy frameworks are protected so households can continue to benefit from affordable, low-carbon energy.

The role of landlords in improving energy security

In the short term, landlords can play a critical role in improving residents’ energy security. Beyond upgrading homes with efficiency measures, landlords have the unique ability to aggregate their housing portfolios to negotiate better energy rates, delivering immediate cost savings and long-term stability.

This is especially important for social housing residents, who have no choice over the home they live in, no agency to improve its performance, and no say in which measures are installed or when. While energy supply remains the resident’s responsibility, their ability to access home upgrades and greener electricity depends entirely on their landlords’ actions, making proactive engagement from housing providers essential.

“By embedding fair heat as standard, landlords can provide healthier living conditions and reduce long-term maintenance costs, while residents gain security and comfort”

Another innovative approach being explored by some landlords, with Healthy Homes Hub and Switchee, is the warm rents model, which proposes including a guaranteed level of heating as part of the rent. This concept could help tackle fuel poverty by removing the uncertainty of energy costs for residents while ensuring homes remain warm enough to prevent issues such as damp and mould.

By embedding fair heat as standard, landlords can provide healthier living conditions and reduce long-term maintenance costs, while residents gain security and comfort without the stress of fluctuating bills. Trials such as warm rents show how rethinking the relationship between rent and energy could deliver both social and environmental benefits.

Closing thoughts

The challenges posed by rising energy prices and fuel poverty are complex, but not insurmountable. By combining immediate measures such as debt relief, energy as a service model, and retrofit with long-term strategies – such as warm rents and accelerating the transition to clean power – we can create a future where energy is affordable, secure and sustainable for everyone. This will require collaboration among the government, landlords, energy providers and sector innovators.

2026 must be the year we move from short-term fixes to systemic change, ensuring that no household is left behind in the journey towards fair, reliable and low-carbon energy.

Ciara Murphy, head of energy services, Sero