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Social Housing Decarbonisation Fund (SHDF): Get Wave 3 ready


On the 13th May, the Department for Energy Security and Net Zero (DESNZ) released draft guidance for SHDF Wave 3. This article highlights some key changes to the SHDF application process, compared with previous years.


    Starting from the beginning, what is SHDF?


    SHDF provides grant funding to improve the energy performance of social housing, through the installation of energy efficiency measures and low carbon technologies.


    This includes insulation, solar panels, heat pumps, smart controls, and other energy efficiency and low carbon heating measures such as draft proofing, windows, and doors.


    The fund facilitates a widespread adoption of decarbonised heating systems to help:

    • 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

    Since the first demonstrator wave was launched four years ago, over £1bn of funding has been awarded through the SHDF. This funding has seen proposed energy performance improvements to over 100,000 homes.


    Last year, around £1.2bn of further funding for SHDF was announced for future waves.

    Who is eligible? 

    Registered providers of social housing and registered charities that provide social housing are eligible to apply. There are other eligibility criteria, related to the scale of the project, which are outlined in the recently released draft guidance.



    Wave 3 Draft Guidance: Some key changes

    1. Two funding routes

    There are now two routes to access funding under SHDF Wave 3: Challenge Fund and Strategic Partnerships:

    • The Challenge Fund has been designed for most applicants to access, funding will be available in principle for bids that have met the minimum standard.
    • Strategic Partners will be led by organisations that can deliver retrofit on a large scale and at lower cost due to their past experience and expertise.

    For both funding routes, you can apply as a consortium. This increases an applicant’s ability to work at scale, and enables the combination of strengths from different organisations.

    RISE tip:

    If you are thinking of applying for funding through a consortium, attend our upcoming masterclass Achieving Success in Your Consortium on Friday, 31 May, 12-1pm. 

    This session is for anyone either thinking of joining/forming a consortium or already in an existing one. Our experts will uncover lessons learned from previous projects, management tools and tactics, and how to set goals and achieve success.

    2. Consistent cost cap


    There will now be a consistent cost cap across all homes. This will not vary by starting EPC band or wall type as it did in Wave 2. This is with the aim of simplifying the process for applicants.


    3. Performance outcomes


    Grant Recipients are expected to get homes to EPC C. If this is not achievable within the cost caps, homes are expected to attain the maximum EPC grade achievable within the cost caps.


    4. Minimum number of homes


    Most Wave 3 Challenge Fund applications must include a minimum of 100 eligible social housing properties at EPC band D-G per application.


    However, small social housing landlords (defined as managing 1000 homes or less) have no minimum requirement and therefore can apply with less than 100 homes in scope. It is, however, expected that providers wishing to apply with less than 100 homes will actively consider joining a consortium given the benefits this can bring.


    Strategic Partnership applicants will be expected to propose projects of significant scale, retrofitting multiple thousands of homes.


    Get Wave 3 ready in four steps


    Step one - read the draft guidance 


    The SHDF Wave 3 Draft Guidance outlines more information on eligibility criteria, expected performance outcomes, delivery timescales and more.


    Read the draft guidance for your opportunity to feedback on Wave 3 ahead of the release of the final guidance.


    Step two - Catch up on our Introduction to Wave 3 Webinars


    DESNZ Policy and Delivery leads joined the RISE Programme Director, David Kemp, to introduce Wave 3. The sessions covered:

    • aims of the fund
    • overview of the eligibility requirements
    • support that will be available to prospective applicants

    There were two webinars held for the Strategic Partnerships funding route, and  two webinars held for the Challenge Fund. These will be available to view on the RISE website in the coming week.



    Step three - Listen to the Introduction to SHDF Wave 3 Podcast


    This podcast outlines this wave of SHDF support. Host Sarah McClelland (Associate Director, Sustainability, Turner & Townsend) is joined by Elliot Marcus (Social Housing Decarbonisation Policy Lead, DESNZ), Alice Kaiser (Senior Project Manager, DESNZ) and David Kemp (Director, Turner & Townsend) to discuss;

    • the key features of SHDF wave 3, and the differences with previous waves of funding,
    • the detail behind the Strategic Partnerships and Challenge Fund routes
    • who can apply for this new wave,
    • the free, expert support that is available to all potential applicants through Retrofit Information, Support and Expertise (RISE).

    Listen on Spotify, Apple Podcasts, or wherever you listen to podcasts.  


    Step four - Sign up to RISE


    The RISE team will continue to update you on upcoming masterclasses, online courses, and more, to support your SHDF application. 


    Sign up to our newsletter, and follow us on LinkedIn, to keep up to date.


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