Draft guidance for SHDF Wave 3 released

The Department for Energy Security and Net Zero has released the draft guidance for the Social Housing Decarbonisation Fund Wave 3

The draft guidance for the Social Housing Decarbonisation Fund(SHDF) Wave 3 features two new application routes for social housing providers to access the funding.

Challenge Fund

The majority of grant recipients will fall into this category, which will facilitate the phased approach to delivery taken by many organisations, with detailed information required on the homes included within a phase only once it is ready to start delivery.

One of the key principles of this approach is that all applications that meet the minimum standards of the scheme will be awarded funding (although if oversubscribed, this may not be the amount of funding requested).

Strategic Partnerships

A small number of grant recipients with a proven track record of successful delivery at scale (ie 1000s of properties) can access funding through a Strategic Partnership.

To reflect the capability evidenced by these landlords and to support delivery at scale, these grant recipients will not be required to provide detail on specific homes and measures until works have been carried out, as part of routine delivery monitoring.

Both individual and consortium applications will be permitted through this route.

Key aims of SHDF Wave 3 outlined in the draft guidance include:

  • Reducing the number of households in fuel poverty by improving the energy efficiency rating of social homes below EPC Band C and reducing energy bills. On this basis, tenant energy bills must not increase as a result of the retrofit works, relative to what they would otherwise have been.
  • Improving the comfort, health, and wellbeing of social housing tenants by delivering warmer and more energy efficient homes.
  • Supporting economic resilience and a green recovery in response to the economic impacts of Covid-19, supporting thousands of jobs.
  • Creating the conditions for growth in the retrofit supply chain capacity and capabilities, boosting productivity and innovation in the construction sector. Additionally, upskilling social landlords in retrofit to support future improvements to energy efficiency in the social housing sector.
  • Deliver cost effective carbon savings to contribute to carbon budgets, and progress towards the UK’s target for Net Zero by 2050 by reducing CO2 emissions from social housing.

 Over 140,000 households could benefit from the funding

Derek Horrocks, chair of the National Home Decarbonisation Group, commented:  “It is fantastic to see that the looming general election has not caused delay to plans for SHDF Wave 3 – and we’re really pleased to see the release of this draft guidance promising the largest commitment to date. And with the delivery window of Wave 3 running well into 2028, this will sustain the momentum that’s been building across the housing decarbonisation space in recent years and gives a clear signal to the industry to continue ongoing investment at scale in the innovation, skills and training that provide the foundation for decarbonisation work.

“It’s particularly pleasing to see the two different application routes to cater for applicants of any size – the Strategic Partnerships route for significant, large-scale schemes and the Challenger Fund route, which is open to all.

“That means an even wider pool of households will feel the benefits of funding secured by clients – and with more than £1.2bn in the funding pot that’s more than 140,000 households set to be improved.”

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