Policy & advocacy news
What does the budget mean for community energy?
27 November 2025
Yesterday’s Budget saw the Government make important progress on striking the balance between making energy bills fairer whilst supporting further fuel poverty work and electrification on our way to Clean Power 2030. This includes a plan for the government to refund electricity suppliers for 75% of the domestic portion of the Renewables Obligation until 2029. Alongside other budget measures, this is set to cut average household energy bills by £150, and for the poorest who are reliant on electric heating, up to £400.
The Chancellor also announced the cancellation of the ECO scheme. While it was not a perfectly designed programme, ECO delivered important work to tackle fuel poverty, providing funding for home energy efficiency upgrades to people who would not otherwise have benefitted from them.
Community energy organisations are ideally placed to play a key role in the successor scheme to ECO, leading on area based delivery, providing trusted advice and funding to home owners and tenants alongside local authorities and installers. The government must rapidly roll out the upcoming Warm Homes Plan to maintain delivery of fuel poverty alleviation work, with the community energy sector as a major partner. Swift publication of the Local Power Plan will also unleash the sector to start building more solar, wind and hydro in parishes and neighbourhoods across the country.
Fuel poverty
Perhaps the most significant energy policy announcement was the scrapping of the Energy Company Obligation (ECO) Scheme from March 2026 to reduce fees levied on energy bills.
ECO was the government’s main programme supporting home insulation for fuel poor households. The announcement of the closure of the scheme before the Warm Homes Plan is published leaves a level of uncertainty over the government’s wider approach to tackling fuel poverty.
The Chancellor announced an additional £1.5bn of capital investment for the Warm Homes Plan aimed at fuel poverty alleviation. However, James Dyson, Senior Researcher at E3G, points out that this is intended to replace £6.4bn of ECO funding.
With the cancellation of the ECO scheme and the Warm Homes Plan expected soon, a new programme of fuel poverty alleviation is coming. CEE, with support from the Heat and Energy Efficiency Working Groups, has lobbied ministers to ensure that community energy is given a leading role in delivering trusted local energy advice and retrofit and clean heat projects. Read more about our clean heat policy proposals.
ISAs
The Chancellor announced the following change to ISA rules to encourage greater investment in stocks and shares:
“From 6 April 2027 the annual ISA cash limit will be set at £12,000, within the overall annual ISA limit of £20,000… In addition, financial services firms will be providing new, easily navigable ways for people to find the right UK investment for them.”
We will be following up with contacts within government to explore whether savers will be able to invest in community energy Innovative Finance ISAs as part of this change.
Neighbourhood Health Centres
The government plans to deliver 250 new Neighbourhood Health Centres, with 120 operational by 2030. These will be delivered through the NHS Neighbourhood Rebuild Programme through a combination of public sector investment and Public-Private Partnership.
This may represent an opportunity for community energy organisations. The sector has a strong record of delivering partnership projects with GP surgeries and other NHS buildings. We will keep members updated with details on potential ways to get involved with the scheme as they are published.
Mayoral Strategic Authorities
Funding was allocated to (or reconfirmed for) several Mayoral Strategic Authorities (MSAs) through a variety of schemes including:
- The Mayoral Revolving Growth Fund
- Total £500m
- A strategic investment partnership which will see central government and Mayors sharing risk to overcome access to finance barriers in key city regions, accelerating investment, unlocking development and boosting growth
- MSAs: Greater Manchester, West Midlands, Liverpool City Region, North East, West Yorkshire and South Yorkshire
- Local Growth Fund
- A fund to invest in growth-driving interventions, including local infrastructure, business, and employment support and skills programmes.
- £902m over four years total
- MSAs: Greater Manchester, North East, West Midlands, South Yorkshire, West Yorkshire, Liverpool City Region, Greater Lincolnshire, Tees Valley, Hull & East Yorkshire, York & North Yorkshire and East Midlands.
- Integrated Settlements
- At least £13 billion from 2026/27 to 2029/30 total
- MSAs: Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, Liverpool City Region, the North East, and Greater London
While this does not represent new funding in most cases, it does serve to emphasise the opportunities available to community energy organisations if they can work with Mayoral Combined Authorities on local energy projects. We strongly recommend that government creates the mechanisms and levers in blended and community finance to ensure strong early collaboration with communities before rolling out funded projects.
EV excise duty
New charges for Electric Vehicles are likely to impact community energy car club projects. From April 2028, EVs will pay 3p per mile in addition to existing road taxes. A consultation on these changes closes in March 2026.
However, to encourage EV uptake and support the development of infrastructure, the government is investing an additional £100m in the public charging network and introducing a 10-year 100 per cent business rates relief for eligible EV chargepoints and EV-only forecourts.
Growing the Co-operatives and Mutuals Sector
The Chancellor reiterated the government’s plan to launch a call for evidence on how best to grow the co-operatives and mutual sector. This comes off the back of a manifesto commitment to double the size of the sector.
Apprenticeships
SME apprenticeships will be fully funded for eligible people under the age of 25.