Funding Sources – Grants and Subsidies
06.December 2009

Funding Sources – Grants and Subsidies

This brief overview provides you with information on some of the most important UK funding sources.

Financial assistance for improvement works
The incentives to install energy efficiency measures are different between the rented sector and the owner occupied sectors. In the rented sector, the tenant has most to benefit from improvements to the energy efficiency of their property (a warmer home, lower bills) but the landlord is likely to be the person who would make (and pay for) those changes. However there are a number of schemes available which may contribute toward the cost of improvements to a building that are designed to increase its energy efficiency. The main ones are outlined below.



The Carbon Emissions Reduction Target (CERT)
The six domestic energy suppliers (British Gas, EDF Energy, npower, Powergen, Scottish and Southern Energy and Scottish Power) are required by government to meet carbon emission reduction targets based on the number of consumers they serve. The suppliers meet their targets by funding the installation of energy efficiency measures or by offering other services, each one of which is accorded a carbon saving ‘score’ which counts towards their targets. A set proportion of the carbon savings must be achieved from the Priority Group – households (including tenants) in receipt of certain benefits. Suppliers are keen to identify dwellings which could benefit from the installation of measures in a cost effective manner (for example, a whole estate or street that could benefit from cavity wall insulation or loft insulation). There may be supplier schemes that will offer free or discounted measures, especially on large portfolios. The Energy Savings Trust helpline or the suppliers’ customer helplines should be able to provide more information on relevant schemes.


Note that a landlord/tenant does not necessarily need to be a customer of the relevant supplier to benefit from a CERT scheme – a supplier can count any installation towards their target.


The Landlord’s Energy Saving Allowance (LESA)
The Landlords Energy Saving Allowance (LESA) is administered by HM Revenue and Customs (HMRC). It allows private landlords who pay income tax to offset up to £1,500 spending on certain energy efficiency measures per dwelling (not per building) per year. The qualifying measures are loft, cavity, floor or solid wall insulation, draught proofing and hot water system insulation. An EST leaflet contains useful practical advice about applying for the LESA, although note that this was published in March 2006 and the coverage of the scheme has since been increased and the life of the scheme extended to 2015, and covers all of the UK.


It is available  here


More information on the LESA can be found at or by contacting the relevant local authority

or local HMRC enquiry centre.


Warm Front
Warm Front is the Government’s main fuel poverty initiative and is open to households on certain benefits in England. Grants of up to £2,700 are available (or £4,000 for dwellings with oil fired heating systems). The landlord does not need to be eligible personally: if the tenants qualify then the property is eligible.

More information is available  here


The Home Energy Efficiency Scheme
The Home Energy Efficiency Scheme operating in Wales has a similar function to Warm Front, with grants of up to £3,600 offered. More information is available at


Subsidies and Grants – General information
The availability of such financial resources is generally restricted, usually to a set annual budget level. A legal entitlement to such monies is not normally the case. Usually the payment of such funds can only be granted after the receipt of a valid application and is often on a first come, first served basis. When the budget is exhausted, no further payments can be made within that budget period. It therefore makes sense to apply early. Improvement measures should only be undertaken once the grant or subsidy has been approved in writing. It is often the case that any work done or purchases made prior to the date of approval are excluded from the scope of the funding. We therefore recommend that you ensure that you are well informed about the various alternative funding sources available and compare the conditions thoroughly.

Special attention should be paid to the following factors:

- Who is eligible to apply for the funding?
- What exactly may be applied for?
- Whether of various funding sources are cumulative or if they are set-off against one another?

i.e. will the sum approved by one funding source be deducted from the eligible sum from another funding

- The conditions of the funding i.e. loans – the interest rate, settlement period, monthly payments and

any security required.
- The payment approval conditions.
- The current level of funds available.


The following link provides valuable information on grants and subsidies available within the UK.


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Funding Sources – Grants and Subsidies

This brief overview provides you with information on some of the most important UK funding sources. [more]