Warm Homes Nest scheme: annual report 2022 to 2023

The reporting year has remained challenging for all, with the war in Ukraine continuing to provide uncertainty over fuel supplies. This has continued to impact global wholesale gas prices which reached unprecedented highs. The increase in the wholesale gas prices has resulted in an energy and cost-of-living crisis which has continued to take a grip on the most vulnerable in society who and most in need. This has forced more households in Wales into fuel poverty, and our programme to improve the energy and efficiency of our homes has never been more important.

In 2022-23, the Welsh Government provided £26.9m of funding to deliver the Warm Homes Programme, Nest Scheme.  This investment which has been provided has helped improve the energy efficiency for those in lower income households and the people who are most in need.  More than 4,000 households have since benefited from home energy efficiency measures during this reporting year.

The ongoing cost of living crisis is having a devastating impact for households, particularly vulnerable households across Wales. Support to those most in need has seen a striking increase for this reporting period. The numbers of households we have supported in severe fuel poverty has showing a worrying increase.  This year, 63% of households contacting the service were living in fuel poverty. This is a noticeable increase in support for those living in fuel poverty from the previous reporting year of 34.1%. 25% of the 63% of households contacting the service this year were in severe fuel poverty. 

As part of our Nest Scheme, we have continued to provide access for householders to obtain energy advice, and this year this has seen a drastic increase in those requesting support. Tailored advice has been provided to more than 21,000 households to assist those to manage their finances through the cost-of-living crisis.  This is a marked increase in the figure from 2021/22 where 15,700 received advice.  Advice for this reporting period continued to include signposting to those third-party services such as benefit entitlement advice together with money management advice.

The Nest Scheme has continued to work towards reducing carbon emissions and delivering against the Welsh Government’s commitment in tackling the climate emergency. The target to achieve almost zero carbon emissions from buildings is one of the biggest decarbonisation challenges our country faces Installations undertaken via the Nest Scheme go some way to contribute to this objective despite it not being predominantly a decarbonisation scheme. In particular, this reporting year has seen the ongoing development of lower carbon technologies for the Nest Scheme, and these developments included the ongoing roll out of Solar PV together with the introduction of battery storage to those households which are appropriate. 

As with the last reporting period, the continued uncertainty in the energy market and the increasing of energy costs highlights, more than ever, highlights the importance to improve the energy efficiency of homes across Wales, and to aim to reduce energy use and their associated costs. This is the principal focus of the Warm Homes programme. 

I will continue to work with key partners who deliver the Nest Scheme to ensure we continue to support and assist those in our society who the most in need. This support is ongoing as Wales continues to recover from the effects of the cost of living and energy crisis, together with the impact of the war in Ukraine. 

I announced recently, the existing Nest Scheme is coming to an end in March 2024, to ensure there will be no gap in provision between the current and new Programme. 

The new Warm Homes Programme will contribute towards achieving a net zero Wales by 2050 and directly enable a just transition through the twin objectives of tackling fuel poverty and the climate emergency. Our long-term ambition is to improve the energy efficiency of Welsh homes, ensuring we use only the energy we need, to keep homes comfortably warm at an affordable cost.

Welsh Government Warm Homes Nest scheme provides energy efficiency improvements to low-income households and those living in areas of deprivation across Wales.

In 2022-23, Welsh Government invested £26.9 million in the energy efficiency of housing stock across Wales, helping to reduce fuel bills and improve the health and wellbeing of households most in need. Since 2011, Nest has helped over 198,000 households through its advice and support services.

Our priorities:

• Providing households with free, impartial advice and signposting to a range of support services;
• Supporting eligible households with a package of free home energy measures;
• Working with a range of partner organisations to ensure the scheme reaches the most vulnerable households in Wales; and
• Supporting Welsh Government’s Fuel Poverty Strategy to help people struggling to meet the cost of their domestic energy needs.

Our successes:

In 2022-23, the scheme provided:

• Free and impartial energy saving advice to 21,959 households; 
• A home energy improvement package, such as a central heating system, a boiler, insulation, solar panel PV or an Air Source Heat Pump, to 4,364 households;
• A modelled average energy bill saving of £422 per year;
• Benefit Entitlement Checks resulting in a £2,457 average potential benefit take-up per household;
• 100% of installations completed by Wales-based installers; and
• The creation of five jobs and supporting our contractors with nine apprenticeships. 

The Nest scheme is managed by British Gas, working with Energy Saving Trust, on behalf of the Welsh Government.

Customer analysis and data insights, developed since Nest began in 2011, were used to inform marketing, to ensure appropriate communication reached customers who are most in need of.

This included:

• promotion of the Nest website with over 251,800 users during 2022-23;
• a direct mail campaign which reached over 119,000 vulnerable households in Wales;
• paid Facebook and Google adverts targeted at eligible customers throughout Wales; and
• supporting health boards, charities, and community organisations across Wales to reach households who may benefit from our advice and support.

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In 2022-23, Nest provided 21,959 households with tailored advice and referrals to third party services. 

Every customer who calls the Nest helpline receives tailored advice and support from our advice team to ensure they are receiving the most appropriate help to match their specific needs. This includes energy saving and water efficiency advice, a package of free home energy efficiency improvements, and signposting and referrals to a range of support services.

Third party support

Nest refers households to other organisations to provide further support where appropriate. 16,147 households were referred or recommended to contact one or more third party service in 2022-23.

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Benefit Entitlement Checks

During the year, 401 households were found to be eligible for new or additional benefits averaging £2,457 per household. This equates to £985,257 in benefit take-up this year.

Care and Repair Services

Care and Repair agencies provide a range of services to help older people live in homes which are safe, secure, and appropriate to their needs. Nest signposted and referred 1,717 households to Care and Repair in 2022-23, with 449 of householders using the caseworker service.

Warm Home Discount

In total, 5,302 customers were referred to their energy supplier for the Warm Home Discount in 2022-23.

Fire and Rescue Services

Nest referred 278 customers to Fire and Rescue Services across Wales of which 215 received a home fire safety check.

Water Companies 

Nest refers customers to affordability schemes from Dŵr Cymru Welsh Water including HelpU, Water Direct, Customer Assistance Fund and Water Sure. This year, 2,339 customers were referred, with:

• 42 customers benefiting from HelpU;
• 64 customers benefiting from Water Direct;
• 38 customers benefiting from Customer Assistance Fund; and
• 28 customers benefiting from Water Sure.

Money management advice

1,910 customers received money management advice in 2022-23 and an additional 1,564 customers received debt management advice.

Welsh Government’s Warm Homes Nest scheme helps households in fuel poverty by reducing energy bills through free energy efficiency improvements in the home.

Customers contacting Nest for advice and support are assessed for their eligibility to receive a package of free home energy efficiency improvements. 

The criteria for home improvements are: 

• A household member is in receipt of a means-tested benefit and the property is privately owned or rented with an indicative energy rating of E, F or G; or 
• A household member is living with a health condition (in a D, E, F, G rated privately owned or rented property) and in receipt of an income below defined thresholds.

Health criteria data

A total of 25,261 households were assessed through the health criteria between July 2019 and the end of March 2023 having failed to meet the scheme’s means tested benefit criteria. Of these, 11,929 (47.2%) met the health condition and property criteria and were referred for an income assessment with 6,838 (27.1%) passing the income assessment and therefore meeting all health criteria   – 5,188 of these have had measures installed.
Many health criteria referrals were vulnerable households:

• 68.2% aged 60 years old or more;
• 49.9% in single income households aged 60 years old or more;
• 25.2% in two adult households aged 60 years old or more;
• 52.2% of households were living in a property with an energy efficiency rating of E, F or G;
• 47.8% of households were living in a property with an energy efficiency rating of D;
• 59.7% of households have an income below 80% of the income thresholds; and
• 18.6% less than 50% of the income threshold.

Home energy improvement package installation process
Nest works in partnership with Rent Smart Wales to ensure all private landlords are officially registered before being allowed access to support from the scheme for their rented properties.

A fully qualified assessor will:

• visit the customer’s home to complete a whole house assessment;
• identify the most appropriate and cost-effective measures for the property; and
• confirm the eligibility of the customer.

The Nest team ensures all required permissions and consents (landlords, planning etc.) and third-party requirements (gas connections, asbestos removal etc.) are completed prior to agreeing the installation dates with the customer.

A network of Wales-based installers provides the installation services under the management of the Nest team. An inspection is undertaken of the completed installation package and remedial work of any identified defects is completed quickly and effectively.

Nest home energy efficiency improvement packages are designed for individual properties, so there is no standard package of measures, but it could include a new boiler, central heating system, or loft insulation and some may include newer technologies like solar panel PVs, air source heat pumps and external wall insulation.

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Type of off-gas measures installed 2022-23

The majority of home energy improvements were for gas fuel (82.47%). The installation rate of other fuel types are shown in the chart below:

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Household and property characteristics

Nest aims wherever possible to bring people out of fuel poverty. 

During the initial application process, householders are asked to confirm their income. This information is assessed against modelled running costs for their household. This allows the Nest Advice Team to assess whether the customer is living in fuel poverty.

Households who spend over 10% of their income on energy bills are regarded as living in fuel poverty, with households spending over 20% are classed as living in severe fuel poverty.

Fuel poverty profile

Prior to receiving home energy efficiency improvements, 63.3% of households contacting Nest were estimated to be living in fuel poverty. This includes 25.8% of households living in severe fuel poverty.

Tenure of home energy efficiency improvement package recipients

81.2% of households that received a home energy efficiency improvement package were owner-occupied, with 18.8% of households being privately rented.

Age profile of home energy efficiency improvement package recipients

More than half of households that receive a home energy efficiency improvement package had an age profile of 60 or over:

• 0.7% were under 24 years old;
• 45.3% were between 24 and 59 years old;
• 20.6% were between 60 and 69 years old; and
• 33.4% were aged 70 or older.

Home energy efficiency improvement package recipients by urban and rural classification

The breakdown by urban and rural classification of customers receiving a home energy efficiency improvement package shows 59.6% of households were living in urban areas and 40.4% were living in rural areas.

Home energy efficiency improvement package recipients by gas connection

The proportion of customers who were not connected to the mains gas grid prior to receiving measures under the scheme was 16.3%.

Home energy efficiency improvement package recipients by property type

The proportion of home energy efficiency improvement package recipients based on property type is as follows:

• 30.7% were semi-detached;
• 30.4% were mid-terrace;
• 12.4% were bungalows;
• 10.3% were end-terrace;
• 9.3% were detached;
• 6.2% were flats; and
• 0.7% were park homes.

Nest home energy efficiency improvements have delivered estimated energy bill savings averaging £422 per household per year, making a real difference to fuel-poor households.

SAP ratings: an explanation

The Nest scheme calculates the effects of energy efficiency improvements on the homes using a Reduced Data Standard Assessment Procedure (SAP)1 rating. [1] The software measures the SAP rating before and after suitable measures are installed. The aim is to install a package of measures to increase the energy rating of a property towards a SAP rating of C where possible and when it is cost-efficient to do so. The actual measures installed are remodelled to account for any amendments to the original package due to technical issues or customers changing their mind.

The Nest assessor establishes the current SAP rating of the property and the potential SAP rating if a home energy efficiency improvement package is installed. Band A properties are very energy efficient and will have the lowest running costs whereas band G properties have poor energy efficiency ratings and consequently will have higher running costs to maintain the same standards of heating and lighting.

Benefits are based on modelled outcomes and the actual reductions and savings will depend on the individual customer’s behaviours. It is often the case households in fuel poverty do not heat their homes effectively and therefore, in some cases the benefit to the customer will be increased comfort and wellbeing through the ability to heat the home more effectively rather than a reduction in fuel bills.

Changes in SAP rating before and after installation of home energy efficiency improvement packages

SAP rating before installation

The SAP ratings of households before the installation of home energy efficiency improvement packages were as follows:

• 5.2% of households had a SAP rating of E;
• 32.6% of households were rated F; and,
• 62.3% of households were rated G.

Note: due to how the percentages have been calculated, there is a rounding error of 0.1% for this section.

SAP rating after installation

The SAP ratings of households after the installation of home energy efficiency improvement packages were as follows:

• 23.2% of households had a SAP rating of C;
• 60.2% of households were rated D;
• 13.7% of households were rated E; and
• 2.9% of households were rated F.

Household savings: cost, energy and carbon dioxide emissions

The table shows the breakdown of modelled energy savings per household receiving measures by local authority, with an estimated average saving of £422 per year or 21,715 megajoules (units of energy) per annum.

It also shows the breakdown by lifetime carbon emission reductions for households receiving a home energy efficiency improvement package.

Total lifetime emissions are modelled to reduce CO2 by over 109,301 tonnes.

 [1]  RdSAP and SAP – The Standard Assessment Procedure is the UK Government’s methodology for assessing and comparing the energy and environmental performance of dwellings. The reduced data SAP (RdSAP) was introduced later as a more cost-effective tool to assess existing dwellings.

During 2022-23, Welsh Government invested £26.9 through Nest measures.

Installations of home energy efficiency improvement packages by local authority area against the distribution of fuel poor households by local authority area

The graph illustrates the percentage of installations completed by local authority area in 2022-23.

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Average spend per household on home energy efficiency improvements by local authority

This chart shows the average spend on home energy efficiency improvements by local authority. The spend is higher in some local authorities due to the number of properties not on mains gas.

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Customer satisfaction with Nest has been consistently high over the life of the scheme: 98.8% of customers reported satisfaction with the advice services and installations provided by Nest in 2022-23.

All householders advised by the scheme are issued with a postal survey and asked to rate the service according to their satisfaction. Householder satisfaction is recorded and managed (including any complaints) relating to each stage of the customer journey.

The complaint volume in 2022-23 represented just 1% of all customers who received a home energy efficiency improvement package. The majority of customers were satisfied with the installation service provided.

The Partnership Development Managers (PDMs) have worked with a wide range of organisations to help reach vulnerable households with Nest support during 2022-2023. These included:

• all 22 local authorities in Wales;
• health boards: Hywel Dda University Health Board, Powys Teaching Health Board, Betsi Cadwaladr University Health Board;
• energy and water companies: SP Energy Networks, National Grid, Dŵr Cymru, Hafren Dyfrdwy;
• advice agencies: Citizens Advice Cymru, Warm Wales, Groundwork and local/regional agencies;
• organisations that support older people: Age Cymru, Age Connects, Care & Repair;
• regional voluntary councils: Ceredigion Association of Voluntary Organisations (CAVO), Denbighshire Voluntary Services Council (DVSC), Gwent Association of Voluntary Organisations (GAVO), Pembrokeshire Association of Voluntary Organisations (PAVO), Pembrokeshire Association of Voluntary Services (PAVS), Flintshire Local Voluntary Council (FLVC), Association of Voluntary Organisations in Wrexham (AVOW);
• services that support customers with health conditions: Parkinson’s UK, Alzheimer’s Society, Wales Infected Blood Support, Hospice of the Valleys; and
• organisations that support marginalised communities in Wales: Race Equality First

Outreach activity

The PDMs attended several outreach sessions and network meetings across Wales during 2022-23. Their activity included:

• Attending “cost of living roadshow” events with Dŵr Cymru, Citizens Advice, Warm Wales, Cambrian Credit Union, Groundwork, Ceredigion, and Gwynedd councils;
• Attending MP and MS cost of living events in Aberconwy, Ammanford, Cardigan, Port Talbot, and Ynys Môn;
• Delivered public talks to vulnerable service users in partnership with Disability Wales and Parkinson’s UK;
• Visiting Ceredigion, Powys and Wrexham County Borough Council’s Warm Hubs throughout winter;
• Presenting to advisers and staff at Warm Wales, Local Citizens Advice, Macmillan, local Care & Repair branches, Hafren Dyfrdwy and Scope; and
• Attending Networking meetings held by North-East Wales Wellbeing Network, Ceredigion Association of Voluntary Organisations (CAVO), Denbighshire Voluntary Services Council (DVSC), Pembrokeshire Association of Voluntary Organisations (PAVO), Pembrokeshire Association of Voluntary Services (PAVS), and Betsi Cadwaladr University Health Board.

Attending events

The PDMs attended 413 events and meetings in 2022-2023. These included many cost of living-focused events in partnership with local authorities, charities, and support organisations, including Dŵr Cymru, Age Well Nefyn, and Race Equality First.

Delivering training

The PDMs delivered a total of 19 training sessions to organisations including Bridgend and Rhondda Cynon Taf Jobcentre Plus Work Coaches, Ceredigion Flying Start Health Visitors, Ceredigion Community Connectors, Torfaen Care & Repair Caseworkers, Hywel Dda Long Covid Support Team, and Community Mental Health Teams.

Direct mail with local authorities

The PDMs worked with 18 local authorities to deliver direct mailing campaigns to promote Nest, reaching a total of 44,029 households. These were Blaenau Gwent, Bridgend, Caerphilly, Cardiff, Carmarthenshire, Ceredigion, Flintshire, Gwynedd, Neath Port Talbot, Newport, Merthyr Tydfil, Monmouthshire, Pembrokeshire, Powys, Rhondda Cynon Taf, Swansea, Torfaen, and Ynys Môn. This was an effective way of reaching vulnerable households at risk of fuel poverty.

Importance of partnership work for Nest

The PDMs have continued to work alongside primary partners such as Dŵr Cymru, Citizens Advice Cymru, Care & Repair Cymru, SP Energy, Warm Wales and others to ensure residents in Wales are made aware of how to access available support.

Nest ensures our community benefits strategy incorporates and delivers outcomes to:

• generate employment and training opportunities for priority groups;
• deliver and support educational and equality and diversity initiatives;
• help build capacity in community organisations; and
• support our supply chain development.

Key achievements in 2022-23 include:

Educational support initiatives

The Nest team continues to deliver our interactive renewable technology and energy efficiency workshop to both primary and secondary schools  across Wales, with an increasing focus on net zero and carbon reduction. This year, over 500 students have taken part; creating new, innovative product ideas.

The Nest team has also supported schools with ‘ready for employment’ sessions, including conducting mock interviews and providing CV guidance.

For the second year, The Maelor School in Wrexham has participated in our WJEC Welsh Baccalaureate Employability and Enterprise challenge.

Building capacity in community organisations

Alzheimer’s Society Cymru

Nest’s Community Engagement Manager was a Dementia Friend Champion. This voluntary position has now evolved into becoming an Alzheimer's Society Ambassador. As part of this role, the Nest team is able to deliver Dementia Friend awareness sessions as before, but also maximises other opportunities in visiting support groups and fundraising.

The Nest team has been invited to attend a number of Alzheimer's Society socialisation groups across south east Wales, where the team runs a cupcake-decorating activity.

Cost of living crisis

The Nest team supported many cost of living crisis advice sessions across Wales, organised by MPs and local authorities, helping residents access much-needed support.

Support our supply chain development

This year the Nest team supported our contractors to upskill their staff and grow their business for Solar PV, with an application fund available of up to £1500 for employee training.

Supply chain development testimonial: Electrical Innovation

“Our primary focus is to expand our knowledge and expertise in the renewable energy sector to combat global climate change and the ever-increasing energy costs that customers are encountering. 

We have identified training requirements and have enabled a further three employees to access this training with the Nest funding. This has now enhanced our business skill set and increased our volume of Solar PV installations.’’

Our outlook for 2023 – 2024

Our aim is to invest more in our volunteering time as well as practical help to community activities that need assistance. The Nest team continues to enhance and develop its community benefits activities by seeking new partnerships and supporting community organisations throughout Wales.

The Nest scheme has been running since 2011, but the ongoing cost of living crisis means the need to tackle fuel poverty and help those most in need is as important as ever.

The Nest scheme will continue to tackle fuel poverty in Wales and:

• Work with a range of partner organisations to ensure the scheme reaches those households in most need;
• Continue the rollout of solar PV and battery storage to eligible households and deploy newer technologies including air source heat pumps;
• Continue to contribute to Welsh Government’s energy and poverty strategies;
• Continue to assist housing co-operatives and support the private rental sector; and
• Operate within the values set out in the Well-being of Future Generations Act including collaboration, integration, and prevention.

Visit the Nest website for more information about the Nest scheme, including how to get in touch with the team.