Spring Budget 2026: Energy Measures for Lancashire Homeowners

The Spring Budget 2026 included several measures relevant to Lancashire homeowners looking to improve their home’s energy efficiency. The headline announcements include an extension of the Boiler Upgrade Scheme, continued 0% VAT on energy-saving materials, new funding for home retrofit programmes, and additional support for fuel-poor households. Here is what was announced and how it affects energy plans for Lancashire homes.

What Energy Measures Were Announced in the Spring Budget 2026?

• 0% VAT on energy-saving materials continues — the zero rate on solar panels, heat pumps, insulation and batteries continues until at least March 2027
• Boiler Upgrade Scheme funding renewed — the £7,500 heat pump grant confirmed through to March 2030
• Warm Homes: Local Grant expanded — additional local authority funding for low-income households in the North West
• Social housing decarbonisation — £1.2 billion for council and housing association energy upgrades
• Green Skills Bootcamps — funded training places for heat pump and retrofit installers across Lancashire and Greater Manchester

For Lancashire homeowners, the key takeaway is that the main grant programmes remain fully funded through 2026 and into 2027. The continued 0% VAT rate alone saves the 5% VAT that would otherwise apply to a typical solar panel installation or heat pump system. Homeowners should act while these incentives are confirmed rather than waiting for potential future changes.

Boiler Upgrade Scheme Extended

The £7,500 Boiler Upgrade Scheme grant towards heat pump installations has been confirmed to continue until 31 March 2030. This provides certainty for Lancashire homeowners who are considering a heat pump but have not yet committed. The extension removes the urgency of applying before a potential scheme closure and gives the installer market more time to build capacity.

The government has also committed additional funding to the scheme, reflecting the higher-than-expected uptake in 2025. Budget documents indicate that Boiler Upgrade Scheme funding will support up to 120,000 installations nationally in 2026/27, up from the approximately 80,000 vouchers issued in 2025.

For Lancashire homeowners, this is straightforwardly good news. The Boiler Upgrade Scheme grant (£7,500, or £9,000 until 31 March 2027 for homes heated by oil or LPG with no mains gas connection) remains the most significant financial incentive for switching from gas or oil to a heat pump. Combined with 0% VAT (until 31 March 2027, see below), the out-of-pocket cost of a heat pump continues to be substantially lower than the full market price.

0% VAT on Energy-Saving Materials Runs to March 2027

The zero rate of VAT on energy-saving materials runs until 31 March 2027, when it is due to go back to 5% (HMRC VAT Notice 708/6). It covers solar panels, heat pumps, insulation, batteries and other qualifying measures installed in homes.

That gives Lancashire homeowners a firm deadline for phased improvements: a battery added after 31 March 2027 is due to carry 5% VAT unless the zero rate is extended. The total saving on a typical solar-plus-battery system is £375 to £625 compared with the 5% rate.

The government has not said whether the zero rate will continue after 31 March 2027, so plan on that date as it stands.

Additional Retrofit Funding

The Budget announced a new tranche of funding for local authority-led home retrofit programmes. Details are still being confirmed, but the allocation includes £500 million nationally for social housing retrofit through the Warm Homes: Social Housing Fund (which replaced the Social Housing Decarbonisation Fund) and additional Warm Homes: Local Grant funding for off-gas-grid homes in England. The Warm Homes: Local Grant replaced the Home Upgrade Grant (HUG), which ended in March 2025. The Great British Insulation Scheme was not extended and closed as planned on 31 March 2026.

For Lancashire, the Warm Homes: Local Grant funding is particularly relevant. The county has thousands of off-gas-grid homes in rural areas – the Ribble Valley, Forest of Bowland, and parts of the Fylde – that rely on oil, LPG, or electric heating. Warm Homes: Local Grant funding can provide free or heavily subsidised insulation and heating upgrades for these properties, with air source heat pumps replacing oil boilers as the primary measure.

The Warm Homes: Social Housing Fund benefits social housing tenants across Lancashire. Registered social landlords (housing associations and council housing arms-length management organisations) will use the funding to insulate and upgrade heating in their housing stock. Tenants in social housing do not need to apply individually – their landlord manages the programme.

Fuel Poverty Support

The Budget confirmed continuation of the Warm Home Discount at £150 per year for qualifying households, along with the Winter Fuel Payment for pensioners (HMRC takes it back if their own income is over £35,000). There was no announcement of further one-off cost-of-living payments for energy bills, reflecting the government’s view that the worst of the energy crisis has passed.

For Lancashire’s fuel-poor households, the most impactful Budget measure is the continued funding for ECO-type schemes that permanently reduce energy bills through home improvements. A one-off payment of £150 helps with this winter’s bills, but insulation that may save an estimated £200 to £400 every year for decades is transformative.

Lancashire has above-average fuel poverty rates, with an estimated 15% to 20% of households spending more than 10% of their income on energy. Areas like Burnley, Hyndburn, Pendle, and Blackburn with Darwen have some of the highest rates in England. The Budget’s funding commitments, while not specifically targeted at Lancashire, will flow through to these areas via the national schemes.

Standing Charges: No Change Yet

Despite growing public concern about energy standing charges (which cost Lancashire households around £340 per year regardless of usage), the Budget did not announce any reform. The government stated it is reviewing the structure of energy bills but offered no timeline for changes.

Standing charges are particularly controversial for Lancashire homeowners who have invested in solar panels and batteries, as they pay the same daily charge as high-usage households despite importing very little from the grid. Reform proposals include moving some standing charge costs into unit rates, capping standing charges at a lower level, and creating different charge structures for microgeneration households.

Any reform is likely to be complex and politically sensitive, as reducing standing charges means increasing unit rates (which would raise bills for high-usage households) or finding alternative funding for the network and policy costs currently recovered through standing charges.

Green Skills and Training

The Budget included £200 million for green skills training across the UK, aimed at increasing the number of qualified heat pump installers, solar engineers, and insulation specialists. Lancashire colleges including Burnley College, Myerscough College, and Blackpool and The Fylde College are expected to benefit from this funding through expanded training programmes for heating engineers transitioning to renewable technologies.

The installer shortage has been a consistent brake on heat pump deployment in Lancashire. More trained engineers means shorter wait times, increased competition (which helps keep prices competitive), and better service quality as the most skilled engineers can be selective about the work they take on.

What Lancashire Homeowners Should Do Next

The Budget’s energy measures are broadly positive for Lancashire homeowners planning efficiency improvements. The continued government grant, 0% VAT until 31 March 2027, and additional retrofit funding create a supportive environment for investment. Here are the practical takeaways:

• If you have been considering a heat pump, the Boiler Upgrade Scheme’s extension to 31 March 2030 removes time pressure, but there is no financial advantage to waiting. Apply now to benefit from current pricing and installer availability.
• If you are planning solar panels or a battery, finishing before 31 March 2027 gets you the 0% VAT rate; after that it is due to be 5%.
• If you are on a low income or in a poorly insulated home, check your eligibility for ECO4 (until 31 December 2026), the Warm Homes: Local Grant and any new funding streams that emerge from the Budget allocations; the Great British Insulation Scheme closed on 31 March 2026. Your local council is the best starting point.
• If you are a landlord, the direction of travel towards higher minimum EPC standards means investing in your properties’ energy efficiency is a matter of when, not if.

Does the Budget affect the energy price cap?

Not directly. The Ofgem price cap is set independently based on wholesale energy costs and network charges. Budget measures like VAT changes and levy rebalancing can indirectly influence the cap, but the Spring Budget 2026 did not include any measures that would change the Q2 2026 cap already announced.

Will there be a new green homes grant scheme?

The Budget did not announce a new homeowner-facing grant scheme comparable to the short-lived Green Homes Grant voucher scheme of 2020/21. Instead, the government is channelling funding through existing mechanisms – ECO4 (until 31 December 2026), the Boiler Upgrade Scheme and local authority programmes such as the Warm Homes: Local Grant; the Great British Insulation Scheme closed on 31 March 2026. This approach is less visible to consumers but provides more stable, long-term funding for home improvements.

How can I find out which Budget measures I qualify for?

Contact your local Lancashire council’s housing or energy team for personalised advice on which schemes apply to your circumstances. The Simple Energy Advice helpline also provides free guidance on national schemes. Most of the Budget measures are delivered through existing programmes, so if you already qualify for ECO4 or the Boiler Upgrade Scheme, you continue to qualify under the extended funding.