DESNZ's policy guidance, updated on 2 July 2026, sets two cost caps for the Warm Homes: Local Grant: £16,600 on average per home for energy-performance measures, which include solar panels, insulation, smart controls and domestic batteries, and a separate £16,600 on average for low carbon heating. They are averages that a council must meet across its whole project, not an entitlement per household. An owner-occupier pays nothing towards the work. A private landlord has one property fully funded and then pays 50% of each later one.
Explainer · Published by SEO Dons Ltd · Updated 7 October 2026
What the cap is, in DESNZ’s words
The guidance sets up what it calls twin cost caps: one for energy-performance upgrades and one for low carbon heating. Its definition matters more than the number: “Cost caps represent the amount that can be spent on average per home (more than one measure can be installed within a cost cap). Projects must meet these cost caps on average by project closure.”
| Cap | Average per home |
|---|---|
| Energy performance (fabric and smart measures) | £16,600 |
| Low carbon heat (heat pumps and similar) | £16,600 |
A council’s project is judged against the average across every home it treats. If a council spends £20,000 on one home and £13,200 on another, it meets the energy-performance cap. A household cannot go to its council and claim £16,600, and a council is not obliged to spend that much on any one home. The caps have also risen: the July 2026 update says they were amended upwards to account for inflation, with the change applying retrospectively across the scheme.
Who pays what
For owner-occupied homes the guidance is explicit: the upgrade should be fully funded, and the household must not be required to contribute. Landlords and social housing providers contribute:
| Home | Maximum grant per cap | Contribution from the owner |
|---|---|---|
| Owner-occupied | £16,600 (average) | None |
| Private rented, a landlord’s first property | £16,600 for energy performance and £16,600 for heating, £33,200 in all | £0 |
| Private rented, second and later properties | £8,300 per cap, £16,600 in all | £8,300 per cap, £16,600 in all |
| Social housing | £8,300 per cap, £16,600 in all | £8,300 per cap, £16,600 in all |
Private landlords may receive one home fully funded across the scheme, then a 50% contribution is required for the rest. Tenants are not expected to pay anything, and the guidance says there is no maximum on what a landlord can contribute, so a council may accept more than 50%.
What counts towards each cap
The guidance lists examples of each category, and says the list is not exhaustive.
Energy performance: cavity wall, flat roof, internal wall, loft, park home, room-in-roof, solid and external wall and underfloor insulation; heating controls; hot water cylinder insulation and thermostats; low energy lighting; solar PV; solar thermal; digital and smart controls; draughtproofing; double and triple glazing; energy efficient doors; and domestic batteries.
Low carbon heat: air source and ground source heat pumps, hybrid heat pumps for homes heated only by mains gas, shared ground loops, high heat retention storage heaters and biomass boilers.
A solar and battery package therefore draws on the energy-performance cap only. It cannot dip into the heating cap, and the guidance says the “EE top up” used under an earlier scheme, which let spare energy-performance money cover heat pumps, is not available here.
Where a battery sits inside it
The battery rules come from the same guidance: batteries can be installed “only where it complements existing or new Solar PV”; they must be installed by an MCS-certified installer to the MCS standard (MIS 3012), and in compliance with PAS 63100 and PAS 2035; and a council should fit one only where it drives bill savings. The guidance strongly recommends a working smart meter and a check for a cheaper time-of-use tariff, since the saving depends on the tariff.
For scale only, retail prices are far below £16,600. Octopus lists a 5 kWh battery-only installation from £3,947 and about 10 kWh from £5,336 (April 2026 prices), and a package of four solar panels with a 5 kWh battery from £7,915. A council pays contractors rather than retail, and its homes also draw on insulation and controls inside the same average, so these figures show only that a solar and battery package is a fraction of the cap, not what a particular home would receive.
What the cap does not mean
- It is not an entitlement. Whether a home gets solar, a battery, insulation or none of them is decided by the council and its retrofit assessor.
- It does not remove the eligibility tests. The home must be in England, privately owned, with an EPC rating of D to G, and the household must meet one of the three income routes, including gross household income of £36,000 or less.
- It does not fund a battery on its own. A battery with no solar panels to complement is outside the rules.
- It does not apply outside England. Scotland, Wales and Northern Ireland have separate schemes, and none funds home batteries today.
How to find out what your council offers
Start on GOV.UK. The council for your home usually contacts you within 10 working days and decides which measures the home gets. For everything else that exists, including 0% VAT on installation until 31 March 2027 and the Warm Homes Loan Scheme, our guide to home battery grants sets out each help, who qualifies, and which claims to treat with suspicion. If you are paying yourself, the cost guide shows the official median prices by size.
Questions people ask
Is the Warm Homes: Local Grant £16,600 per household?
No. The guidance says cost caps represent the amount that can be spent on average per home, and that projects must meet them on average by project closure. A council can spend more on one home and less on another as long as its project meets the average. There are two caps, £16,600 for energy-performance measures and £16,600 for low carbon heating.
Does a battery count towards the £16,600?
Yes. The guidance lists domestic batteries as an energy-performance measure alongside solar panels, smart controls, insulation, draughtproofing, glazing and doors. A battery can only be installed where it complements existing or new solar panels, so it is part of a package rather than a stand-alone grant.
What does a landlord get under the Warm Homes: Local Grant?
One property is fully funded across the whole scheme, up to £16,600 for energy-performance measures and £16,600 for low carbon heating, with nothing to pay. For a second property and beyond, the maximum grant halves to £8,300 per pot and the landlord pays the other £8,300, and a landlord may contribute more than 50%.
Has the cap changed?
Yes. The July 2026 update increased both caps. The guidance says they have been amended upwards to account for inflation and that the change applies retrospectively across the life of the scheme, so councils must meet the new caps on average across all the homes they have upgraded.