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Housing sector secures even more funding for homes – Time to reflect on its impacts and how even more housing providers can benefit

Feb 26, 2024

Maria Adcock, Chirpy Heat

As another hugely successful round of HNES funding is announced for the housing sector, securing much needed funding for homes, Maria Adcock, Senior Consultant at Chirpy Heat reflects on some of the impacts and lessons that the funding is having for housing providers and their customers. She also shares some of the tips on how more organisations can secure future rounds of funding.

In the first 4 rounds of funding, HNES has already provided £28.62M of funding for 139 projects across the country. Chirpy Heat has worked with many housing providers with a 100% success rate on applications, securing funding for 42 of the 139 projects.

What is the Heat Network Efficiency Scheme (HNES) funding?

The Heat Network Efficiency Scheme (HNES) is a Government scheme that provides funding to public, private and third-sector applicants in England and Wales to support improvements to existing district heating or communal heating projects that are operating sub-optimally and resulting in poor outcomes for both customers and operators.

The funding comes in two streams:

  • Revenue Funding: This stream funds optimisation studies to ascertain how schemes can be made more efficient. These are often fully funded by HNES.
  • Capital Funding: This funds up to 49% of the capital works required to make a scheme more efficient.

A successful revenue application allows for an optimisation study to be undertaken, which suggests a strategy of works to make the scheme more efficient. These works lead to a capital funding application. The two-part funding streams work hand in hand.

Why the funding matters more than ever?

We all know heat networks represent a unique challenge if they are to deliver on their promise of low carbon, low cost and reliable heating. A key part of this is improving the efficiency of the network.  It directly impacts on energy costs for customers and management costs for landlords. HNES is currently a great opportunity to make a big impact and will also help to meet full regulation that is only a year away.

What lessons can we draw from projects funded so far?

While each scheme presents its own problems, and the fuel source varies from gas boilers to biomass and air source heat pumps, there are some common themes which have been identified across multiple schemes.

  • Lack of inhibitor:  This can be added to the system in both the plant room and in the flats at the heat interface unit (HIU). Dosing with inhibitor helps prevents rust and corrosion in the pipes which can create sludge that can choke pipework, making for a less efficient flow. We found that lots of schemes were not consistent with their use of inhibitor, which requires regular dosing to continue to ensure good water quality.
  • Lack of insulation: Insulation ensures that heat is delivered to where it is required on scheme rather than it being lost enroute. Whether in the plantroom, distribution network or in flats we found there were lots of insulation missing. Whilst retrofitting insulation can be disruptive and labour-intensive, properly insulating heat network pipework can deliver valuable improvements in efficiency and solve issues like overheating in communal corridors, or in cupboards storing hot water cylinders and HIUs.  It also means that customers pay less for the heat delivered to their homes.
  • Thermostatic Valves: Pre-settable thermostatic radiator valves (TRVs) in flats are essential to ensuring heat is delivered into homes effectively and ensuring lower return temperatures to the energy centre.

So how can you access funding and increase your chances of success?

Chirpy Heat completed 40 successful optimisation applications in the first 4 rounds of funding and there are some key actions that can impact on your success rate:

  • Efficiency review:  Carry out a headline efficiency review of all schemes so you can identify the schemes that need the most improvement.  The funding aims to make the biggest impact on the largest number of schemes – and knowing where they are in your portfolio will reinforce your case.
  • Data review: Whilst heat networks have lots of data, much of it is often unreliable or inaccurate and this impacts on how you rate and rank schemes. Get under the skin of your data and find out if anything needs to improve. Reliable data will provide more evidence for your application.
  • Engage internally: Make sure that internal teams are supporting the application and equally importantly that if an optimisation study is funded, then there is support and resources to take action.
  • Have a plan for investment: Carrying out an efficiency and data review and then completing a funded optimisation study is only the first step. Investing in schemes and making changes is what makes the real difference to your costs and customers energy bills.

If you want to discuss HNES funding or any aspect of you heat networks, then drop us a line at

If you and your team want to know how full regulation of heat networks is going to affect your organisation complete your own regulation readiness review at

Chirpy Heat – Simply Better Heat Networks