Guidance for Wave 2.1 of the Social Housing Decarbonisation Fund (SHDF) has been published by the Department for Business, Energy and Industrial Strategy (BEIS). This guidance, currently published in final draft form, will now go through a period of clarification which will enable the sector to get visibility of what is intended for wave 2.1 and to get #SHDFbidready
What is Wave 2.1?
Wave 2.1 of the SHDF sees an additional £800 million of government funding to be made available to improve the energy performance of social homes in England. This funding reflects the need for scale and urgency in social housing retrofit, which will contribute towards meeting the government’s Net Zero and fuel poverty objectives.
The key objectives of Wave 2.1 are 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 tenants
Who can receive SHDF funding?
This funding is open to direct applications from all Local Authorities, Combined Authorities and Registered Providers (RPs) of social housing (including housing associations and ALMOs that are RPs) in England.
What is the funding model?
SHDF is a co-funded model and therefore requires 50% of total eligible costs to be provided by the applicant.
Cost caps will be scaled by starting EPC Band and wall type and for homes off gas grid, an additional cost cap for low carbon heating will be available.
SHDF funding can be used in conjunction with other funding streams such as ECO, SW, HUG etc but cannot fund same measure twice.
What type of properties and projects are eligible?
All social housing below EPC C (both on and off grid) is eligible, however there are allowances available for infill sites.
SHDF Wave 2.1 will focus on large-scale, fabric-first retrofit projects, therefore there is no maximum number of homes per bid. Wave 2.1 signals a significant scale-up in funding and bidders are encouraged to think about large-scale projects and therefore bids must include a minimum of 100 social housing properties irrelevant of archetype.
What are the targets for Wave 2.1?
The retrofit must focus on a fabric first approach and properties must reach EPC C and 90kwh ‘where reasonable and cost effective’ (EPC D for EPC F/G properties).
If the level of fabric is sufficient pre-retrofit, then an application with only non-fabric measures (e.g. low carbon heating or solar PV alone) on some/all homes may be considered (with significant justification).
What else to consider
- Bids must demonstrate value for money and proposed measures appropriate for the stock to align with SHDF objectives
- Tenants – consideration and engagement is critical from the early stages.
- Details of delivery team, contractors and procurement status must be included and promote use of SME’s and local economy.
When do bids need to be in place?
Early August Application form will be available to download from the government’s SHDF Wave 2.1 webpage
Early September Competition will launch and run for 8 weeks (submission deadline)
Mid-October Details of the submission process will be made available on the SHDF Wave 2.1 webpage.
February 2025 Grant offers made by the BEIS
June 2025 All work must be delivered
How to get #SHDFbidready
We’ve prepared our top tips to ensure you are SHDF bid ready:
- Start now – the process is time consuming and complex, start now so you don’t feel you are rushing down the line.
- Data analysis -Undertake a comprehensive review of all stock. At VOR we don’t focus on just the EPC rating, which although a good starting point, doesn’t help you to understand the different archetypes that exist within your portfolios. By undertaking an archetype analysis, we can very quickly undertake a deep dive into each archetype to understand the measures required to meet SHDF targets, the pathway to Net Zero, and outline costs.
- Tenant Engagement – Prepare a tenant engagement plan that demonstrates how you will go ‘above and beyond’ in terms of engagement. At VOR we believe this is the major factor in making a project successful and we have developed a suite of documents to assist in this process.
- Understand your costs – An early understanding of construction costs, capital costs and administrative costs is crucial to ensure that the bid and funding can deliver the quantum of properties and measures.
- Assemble the right team – For Wave 2.1 there is an emphasis on having the right experience in place from the start including Assessors, Coordinators, Designers, and Installers, through early collaboration, the right team can enhance your bid and your success.
- Utilise resources available – Resources, such as the social housing retrofit accelerator, are there to help you, use them!
- Don’t forget the objectives and timings – When preparing and submitting your bid, remember to ensure that your bid supports the SHDF objectives and delivery timings, and good luck!
How can VOR help?
We can help at all stages of the process from consulting on your bid application and archetype analysis to the end-to-end management of your retrofit programmes. Through pre-construction, procurement, construction delivery, stakeholder engagement and post occupancy evaluation,
We have a rapidly expanding team, made up of experienced construction professionals– Project Managers, Construction Managers, Quantity Surveyors, Mechanical and Electrical Engineers, Passivhaus Designers, Building Surveyors, and Architects who are now qualified retrofit assessors, coordinators, and designers. Our team has a passion for retrofit and brings a broad range of expertise and knowledge to our business which enables us to offer the highest quality service to our clients.
