During our recent research conducted in collaboration with Cambridge City Council, a recurring frustration emerged from the local supply chain. SMEs – the very builders who understand their local streets best – frequently report being locked out because they lack the administrative muscle to navigate complex grant bureaucracies. For the Warm Homes Plan to succeed, local authorities must ensure procurement routes are genuinely accessible to these smaller players.
If local authorities and SMEs are the engine of delivery, innovation could be the fuel. Investment in UK-based climate tech companies has surged by 24%, totalling £4.5bn in 2024. The built environment only accounted for 4% of those investments, even though it accounts for 16% of the emissions.
According to estimates by a private trade association, RetrofitTech accounts for approximately 10% of the exits in the startup space and employs thousands of people. Therefore, there is need to direct more funding into this space.
“Many a rubbish bin could be lined with scrapped retrofit policies: the Zero Carbon Homes standard, the Green Deal financing, Green Homes Grant, ECO4…”
The plan does acknowledge the need to enable innovation: it proposes a pilot retrofit panel to signpost innovative companies toward certification, supported by a UKRI ‘sherpa’ – a dedicated organisation tasked with helping companies navigate the process to approval. While this is a small part of the overall plan, and currently under the radar due to all the talk surrounding the flashy headline figures, it is a key acknowledgment of the innovation ecosystem as an accelerant.
Agile startups are already solving specific issues that the plan’s big-picture ambition cannot address piecemeal. At the Cambridge Institute for Sustainability Leadership (CISL) where I work, we support a number of these through our Canopy innovation community.
For instance, Decent Energy tackles the performance gap by optimising decentralised assets like solar and batteries in real time. Its software manages energy use based on grid intensity and weather, ensuring that the hardware actually delivers the promised reduction in bills. Planarific addresses measurement gaps by using AI to convert aerial and ground-level imagery into accurate 3D building models, allowing local authorities and SMEs to move from guesswork to precision.
Many a rubbish bin could be lined with scrapped retrofit policies: the Zero Carbon Homes standard, the Green Deal financing, Green Homes Grant, ECO4. Money and schemes were always thrown at the grim problem of the UK’s cold, leaky homes (albeit not enough). But they lacked a coherent system and a compelling case for consumer action to deliver on the outcomes.
The Warm Homes Plan could begin to address some of the systemic barriers to delivery and innovation. Beyond expanding existing schemes, it could redesign the market so that novel technologies, along with tried and tested ones, can scale.
An integrated approach that brings national policymakers, local authorities, businesses, innovators and communities together – like CISL’s Living Lab – is essential. We have the plan, now it’s time to execute it.
Anum Sheikh, housing policy expert, Cambridge Institute for Sustainability Leadership