Steps to a Greener Future
Navigating the Social Housing Decarbonisation Fund Wave 3
At Sureserve, we are committed to helping our clients maximise their efforts in providing safe and sustainable homes for their residents.
£1.25 billion
further funding
The Social Housing Decarbonisation Fund (SHDF) is a key initiative in this mission, aimed at upgrading social housing properties across England that currently fall below the Energy Performance Certificate (EPC) band C.
To date, the government has allocated over £1 billion to boost energy efficiency and reduce carbon emissions. Under the upcoming SHDF wave 3, a further £1.25 billion will be available. The SHDF presents a vital opportunity for housing providers to enhance their properties, improve residents' quality of life, and contribute to a greener future. As your trusted partner we have compiled essential information about the SHDF, including its purpose, eligibility criteria, and the application process, to guide you in making the most of this funding.
Firstly, what is the Social Housing Decarbonisation Fund?
The SHDF is a fund to improve the energy performance of social homes in England by helping the adoption of energy efficiency measures, low carbon heating systems and renewable energy.
The aim is to upgrade social housing properties that are currently below the Energy Performance Certificate (EPC) band C up to standard.
How will the SHDF upgrade housing properties?
The SHDF will help by supporting the installation of energy performance measures within social housing properties across England and by assisting with the promotion of decarbonised heating systems. The aim of the fund is to:
- deliver warm, energy efficient homes
- reduce carbon emissions
- tackle fuel poverty
- support green jobs
- develop the retrofit sector
- improve the comfort, health and well-being of social housing residents
What energy performance measures does SHDF support?
Eligible measures include energy efficiency and heating measures compatible with the Standard Assessment Procedure (SAP), excluding heating systems which are solely fuelled by fossil fuels.
These include interior and exterior wall installation, cavity wall insulation, loft installation, underfloor insulation, new windows and doors and draft proofing measures, as well as low carbon heating such as heat pumps and renewable energy generation via solar photovoltaic (PV) panels.
In terms of standards, measures installed must adhere to PAS 2035 and be installed by a certified PAS 2030 or Microgeneration Certification Scheme (MCS) installer which is Trustmark registered.
When does the funding start?
Wave 3 funding is expected to open soon for applications for the upgrading of homes. The draft guidance is now available and social housing providers should start preparing for wave 3 now.
All grant funding for SHDF Wave 3 projects must be transferred to the grant recipient and spent by 31st March 2028, and delivery on all projects must be completed by 30th September 2028, meaning projects can only use co-funding in the final 6 months of delivery.
Who is eligible for the funding?
Applicants
The SHDF Wave 3 is open to:
- local authorities
- combined authorities
- registered providers of social housing (including housing associations and arms-length management organisations (ALMOs) that are registered providers)
- registered charities that own social housing
There are two routes to access funding under SHDF Wave 3: the Challenge Fund and Strategic Partnerships.
The Challenge Fund is the expected route for most applicants and the minimum number of homes required is 100.
The Strategic Partnerships route is open to applications of significant scale, expected to be over 4,000 homes. The lead applicant for Strategic Partnerships must have experience of delivery under a previous wave of SHDF.
Both routes are open to applications from either individuals or consortia.
Properties
All existing social housing properties as defined by the Housing and Regeneration Act 2008 (sections 68-70), below EPC band C, regardless of archetype. Homes retrofitted under wave 1 SHDF are eligible for low carbon heating measures, but homes retrofitted in wave 2 are not eligible for any wave 3 funding.
Additionally, 10% of homes can be included which are at or above EPC C and a maximum of 30% of non-social homes (e.g. leaseholders) can be included – both with certain restrictions applied (review the wave 3 guidance for details).
How to apply for the funding.
Below is a step by step of how to prepare and apply for the funding.
Step 1 – Eligibility
- Gather and review your entire housing stock portfolio data.
- Assess data quality and conduct additional surveys if required to give you confidence in your homes starting EPC bands.
- Ensure your properties are below EPC band C and did not receive funding under wave 2.
- Create a long list of potential homes that could be upgraded.
Step 2 – Determine your application route
- Determine your funding route by the number of eligible homes and previous experience, either via:
- Strategic Partnerships: circa 4,000+ eligible homes and delivery experience under a previous SHDF wave.
- Challenge Fund: 100+ eligible homes.
- If you plan to apply as a part of a consortium, start speaking to potential consortium partners early in the application process.
Step 3 – Prepare your application
- Analyse the data: Collect information on the properties you plan to upgrade, including their current EPC ratings, which measures you plan to include, and the end EPC ratings after they are retrofitted. Outline details of any non-social homes or homes EPC and above that may be included.
- Put together a Plan: Form a plan for the energy efficiency and clean heating measures you wish to implement. Engage with installation contractors for the measures you are proposing to understand their costs and timescales.
- Budget: Put together a detailed budget of the estimated cost of all the works, separated by energy efficiency / low carbon heat measures, and Administration and Ancillary costs. Outline the potential funding sources for your proposed works and understand the matched fund contribution required.
- Sign off: Get internal sign-off for the matched funding contribution and commitment of resources to deliver the project from your senior leadership team.
Step 4 – Submit your application
- Application Portal: Applications are submitted through an online portal provided by the Department for Energy Security and Net Zero (DESNZ).
- Documentation: Ensure all required documents are complete and accurate. This may include property details, energy efficiency plans, and financial information.
Step 5 – Review and feedback
Once you have submitted your application your documents will be reviewed and evaluated. Prepare to provide additional information where required.
Step 6 – Execution
If your application is successful, you’ll receive funding to start the energy efficiency upgrades.
Support and information regarding the application process, including webinars, courses and one-to-one support are available from RISE – the government funded support service for the SHDF.
For the most up to date information, application dates and details please visit the GOV.UK website here.
Finally, please speak to Sureserve if you would like any guidance on your application. We have supported retrofits of several thousand homes under previous waves of the SHDF and our team has a detailed understand the application and delivery process.
Sureserve is your trusted partner, working with you to improve your residents’ housing through management of stock, while working towards net zero targets. Contact us today to find out how we can help you on your decarbonisation journey.