We are Nesta. The UK's innovation agency for social good.

We design, test and scale solutions to society's biggest problems. Our three missions are to give every child a fair start, help people live healthy lives and create a sustainable future where the economy works for both people and the planet.

For over 20 years, we have worked to support, encourage and inspire innovation.

We work in three roles: as an innovation partner working with frontline organisations to design and test new solutions, as a venture builder supporting new and early-stage businesses and as a system shaper creating the conditions for innovation. Harnessing the rigour of science and the creativity of design, we work relentlessly to change millions of lives for the better.

Find out more at nesta.org.uk

If you'd like this publication in an alternative format such as Braille or large print, please contact us at: [email protected]

Authors Andy Marsden, Kevin Wiley and Martina Kavan

Acknowledgements

This work benefits from the input of a huge number of contributors who generously gave their time to speak to the project team.

We'd like to thank everyone who contributed to workshops, engaged online and offered a valuable critique of this work.

Introduction

The case for a coordinated approach to low-carbon heat

The UK currently follows an individual-led approach to low-carbon heating. Households decide on their own whether to switch to low-carbon heating, while governments focus mainly on developing incentives and regulations to encourage people to switch. We think the UK also needs to develop a more coordinated approach to switching homes to low-carbon heat. This coordinated approach would mean enabling many households across a street, neighbourhood or wider area – to switch at the same time. We see this approach as likely to be voluntary in most cases - it will allow households to sign up rather than compelling them to do so, which means it must develop attractive offers. This paper sets out how we think this coordinated approach could work.

There are many potential benefits to a coordinated approach. It may make it easier and more attractive for households to switch, and make people more likely to act if their neighbours are. It may reduce costs through economies of scale, and help to build supply chains. Schemes that would benefit from communal infrastructure, such as heat networks or networked ground source heat pumps, may face more barriers if the decarbonisation of household heat isn't coordinated locally.

We envisage that this coordinated approach would be developed alongside the current individual-level model, to complement rather than replace it. It would take time to build up the capacity for a coordinated approach, and the UK faces an extremely tight schedule in scaling up low-carbon heating installations.

This approach would also build on existing work, such as heat network policy and the heat network delivery unit. We propose this should and could go further to ensure that a coordinated approach to heat spans multiple technology types: shared ground loops, ground source and air source heat pumps.

The rest of this section covers the potential benefits of a coordinated approach to low-carbon heat.

Ease and attractiveness for households

A coordinated approach presents an easier and more persuasive option for households, who can opt into a predetermined scheme rather than having to do their own research and navigate the currently complex customer journey. A default of "everyone in my street is switching" may create a new social norm, making people more likely to sign up.

Enabling communal technologies in denser areas

In many densely populated areas, and in some types of housing (particularly where space is limited), communal solutions such as heat networks or networked ground source heat pumps are likely to be the most suitable low-carbon heating option. These solutions by their nature have to be installed and delivered in a coordinated way, as they utilise shared infrastructure. There is a case for stronger local planning and coordinated delivery to fully realise the benefits of these types of technologies for households.

Equitability

Over-reliance on an individual approach may result in largely inequitable outcomes for households. Government retrofit schemes cover social housing tenants and those in fuel poverty. Outside these schemes, and even with current subsidies, low-carbon heating requires significant upfront costs and a proactive approach. This leaves households not able to pay, not covered by schemes, and at risk of being left behind in the long term.

Moving beyond planning to delivery

Energy planning has been patchy in England but has moved faster in Wales and Scotland. All local authorities in Wales are in the process of creating Local Area Energy Plans (LAEPs), and local authorities in Scotland are similarly creating Local Heat and Energy Efficiency strategies (LHEES). These local-level energy plans for Scotland and Wales are due to be published this year. Although these plans are a good first step in the planning of heat decarbonisation, there is still a gap to delivery. More focused heat planning should build on LAEPs and LHEESs, and work with organisations at the regional and national level – including Regional Energy Strategic Planners (RESPs) and Distribution Network Operators (DNOs) – to inform decisions about national infrastructure.

Coordinating with other upgrades

A street-by-street approach can enable electricity operators (and possibly other utility providers, such as water and gas grid operators) to plan and deliver the network upgrades required to support the energy transition in line with demand. It may also streamline bureaucracy in local authorities in terms of issuing parking suspensions, traffic management, and so on – for example, the Infrastructure Coordination Service (ICS) in London.

Build supply chain

A coordinated approach can give more confidence to suppliers, at both a local and a national scale, that there will be concentrated local demand for low-carbon heating, and enable them to scale up their operations accordingly.

Economies of scale

Switching whole streets or neighbourhoods together can enable savings thanks to economies of scale, reduced costs of customer acquisition and sales for businesses due to demand being aggregated and fewer costs around travel and scheduling of works. It could also enable new models of financing low-carbon heat that are not possible for individual households.

To highlight how a coordinated approach could help expedite the transition to low-carbon heat, we have mapped a future user journey for someone in a home suitable for an air source heat pump, contrasting this against the current approach. The following diagram highlights how a coordinated approach could increase awareness, create certainty and reduce householder effort.

How a coordinated approach may benefit households

This project to date

This project takes a collaborative approach to explore what processes and structures may be required to enable the planning and delivery of a coordinated approach to the transition to low-carbon heat.

We have engaged stakeholders including community groups, contractors, policymakers, local and national governments, and manufacturers. We have built on their input to develop a policy blueprint.

'Policy blueprint' is a term we use for what is similar to a service map. It illustrates the key players involved, the steps they need to take, and the interactions between them. It allows us to make explicit what resources and processes would need to be in place to make the system work.

The policy blueprint outlined in this document aims to bridge the gap between policy theory and real-world implementation.

Our proposal is not a solution but a framework that requires further testing, iteration and de-risking. The end of this report includes our recommendations for steps to build confidence in this approach and refine details.

Who would be involved?

A coordinated switching approach is likely to involve new institutions or new roles for existing institutions. We have split our thinking about the types of institutions needed into five groups. We have not specified the exact form these organisations should take here, but we have set out the role, skill sets and resources required for these bodies to be effective. The groups are:

1. National planning and governance

The existing organisations that would resource, regulate or work in supporting areas to the National Heat Transition Unit and local heat body.

2. National Heat Transition Unit

A new organisation that focuses on the decarbonisation of heat. It has targets for homes to be switched to low-carbon heating sources and its main role is to support, resource and provide guarantees to local heat bodies.

3. Local heat body

A new local government organisation that produces plans at a local, granular level, identifying the right technology for the right areas, identifying areas suitable for coordinated switching approaches, procuring delivery organisations and ensuring that citizens are involved throughout.

4. Delivery organisations

This group is responsible for the delivery of any shared infrastructure, in-home heating and aftercare, although they may also contribute to consultations on the local heat plans and shaping approaches. Predominantly private sector, this group would nonetheless also include the public sector and community organisations.

5. Citizens/households

The public will be made aware of the change to low-carbon heating early and consulted early on plans by the local heat body to influence the design of schemes. They will also be informed of chosen schemes and any potential backstop dates, such as gas grid decommissioning or boiler bans.

This diagram shows how these five different groups will work together, their responsibilities to each other and how they collaborate.

National planning and governance

Desired outcome

1 Achieve an equitable and cost-effective transition to low-carbon heating 2 Make sure the grid can reliably supply energy to citizens through coordination with local actors

Organisations involved

UK Government, national governments, OFGEM, National Energy System Operator – and Regional Energy Strategic Planners (RESPs)

Incentives

Net zero obligations, national low-carbon heating targets, economic growth

Geographic scope

Individual nations with regional remits from the likes of RESPs and Distribution Network Operators.

Roles and responsibilities

UK Government * Report on the transition to low carbon-heat * Regulatory changes needed to facilitate coordinated switching schemes (i.e. consumer finance regulations) * Devolve necessary powers * Form and fund a National Heat Transition Unit (NHTU) * Set targets for the NHTU to steer planning and signal to the local supply chain.

National/devolved governments * Form and fund a National Heat Transition Unit * Raise nationwide awareness of the heat transition * Provide resources to local government * Set the national direction and strategic priorities for the national heat unit within their nation.

Ofgem * Consumer protection

Regional Energy Strategic Planners * Have an overview of the regional picture * Keep regional grid developments aligned with local heat delivery * Work with local heat bodies to develop roadmaps for home decarbonisation schemes

National Heat Transition Unit

Structure

The National Heat Transition Unit (NHTU) could be a team within a department such as Energy Security and Net Zero and could be created by expanding on the Heat Network Delivery Unit. Over time, it could evolve into an external agency, if there were other responsibilities (such as low-carbon heating subsidies) outside of the consideration of this project that it would make sense for this team to have responsibility for.

Desired outcome

1 Local areas have the resources required to design roadmaps and procure the development and delivery of schemes 2 The NHTU has balanced the demands across the UK to ensure an equitable transition

Why is this organisation required?

Planning and coordinating the transition as well as the development of new schemes will require cross-sector expertise. Concentrating that expertise within a single team that provides resources to local teams across the UK will enable those teams to plan and deliver more efficiently.

Incentives

Targets from UK and national governments and mandates set by devolved national governments to guide national direction and strategy

Geographic scope

Individual nations. England, Scotland and Wales

Roles and responsibilities

• Ensure funding is given to local or combined authorities, and their equivalents in devolved nations, to develop local heat bodies
• Provide template team structures and secondment guidance for the recruitment of private-sector expertise
• Provide technical frameworks and expertise on the appropriateness of technology for particular homes
• Ensure local heat bodies have the power to grant exclusivity rights for proposed schemes
• Potentially, offer secondments or advisory expertise from the national heat unit to local areas
• Set targets for Local Government to steer planning and signal to the local supply chain
• Distribute funding for feasibility studies for shared infrastructure schemes that ensure equitable distribution
• Provide template agreements and legal support for the procurement and delivery of schemes and ensure consumer protection
• Distribute funding related to demand guarantees and supporting schemes to attract private investment
• Facilitate new formats of cooperation with finance providers
• Mediate between local heat bodies, NESO (RESPs), DSOs/TSOs and GDNs regarding prioritisation and timelines
• Collate data and feedback from the local heat bodies on the delivery of schemes to iterate best practices, playbooks and guidance

Local heat body

Structure

Combined authorities or local authorities are asked to collaborate at a similar scale to those of combined authorities. There may also be a collaboration with the private sector, for example, seconding technical expertise, or with public sector institutions such as colleges to build training capacity.

Desired outcome

1 To develop viable local heat delivery plans with sustainable roadmaps 2 Plans will have highlighted areas that would benefit from a coordinated or communal approach and have identified the most suitable technology for the right areas 3 Procure and deliver low-carbon heat schemes alongside delivery partners

Why is this organisation required?

To provide granular local-level planning that responds to the local context, and ensure there is an organisation that can flexibly engage with a range of partners (private, community) to deliver. It should include roles that cover procurement, legal, technical, delivery and citizen engagement expertise all, within one team.

Incentives

Targets from the National Heat Transition Unit (NHTU) and commitments to decarbonise any council-owned social housing stock and public buildings

Geographic scope

Combined authority level; where combined authorities don't yet exist, groups of local authorities would collaborate at a similar scale to combined authorities

Roles and responsibilities

• Form a team with expertise in legal, technical, local planning, procurement and household engagement
• Build on any LAEP and plans from the RESP to create a roadmap for the local heat transition
• Pre-market engagement with the supply chain to understand current capabilities and seek advice on the roadmap
• Notify households of plans early and run consultations
• Zone areas based on a preferred low-carbon heating technology
• Identify areas suitable for a coordinated approach
• Shortlisting schemes based on private sector/supply chain input
• Pre-market engagement to ensure that schemes are designed to be appealing and deliverable by delivery organisations
• Define any exclusivity or heat-demand guarantees that underpin scheme viability
• Publishing invitation to tender for areas
• Review schemes and create a roadmap
• Apply for feasibility funding from the NHTU
• Form delivery groups, where applicable, with successful tenders
• Collect data on the performance against the roadmap and update the roadmap
• A point of contact for households

Delivery organisations

Desired outcome

1 To be engaged early with plans 2 To have long-term confidence in the industry and direction of travel 3 Clarity on the eligibility criteria and process for responses to tenders and calls for competition 4 To deliver viable and sustainable low-carbon heating schemes before merging

Supporting organisations

Supply chain, community interest groups, energy suppliers

Incentives

Commercially viable schemes

Geographic scope

May operate nationally or locally

Roles and responsibilities

• Recruit and build a supply chain nationally and locally
• Comment and contribute to local area energy plans
• Second expertise into local heat bodies
• Run feasibility studies where required
• Meet requirements for procurement with the local heat body
• Respond to invitations to tender
• Join into a delivery agreement with the local heat body
• Deliver any communal infrastructure
• Sub-contract to fulfil delivery as required
• Deliver in-home transition
• Provide technical support and aftercare for households
• Notify households of the offers available to them
• Enter into a contractual relationship with consumers that is guided by national consumer-protection standards
• Deliver communal infrastructure (where applicable)
• Deliver the in-home transition to low-carbon heat
• Facilitate households' behavioural change and offer customer support
• Meet any aftercare obligations
• Facilitate reporting on the scheme, collect data on scheme performance and report upwards

Citizens/households

Desired outcome

A warm, affordable home with minimum disruption; to ensure that any in-home work happens at the most appropriate time for them

Community groups may look to promote, form or propose schemes for their local area, building group-up consensus, or going further and proposing and delivering community-owned schemes

Supporting organisations

Households and community groups

Incentives

A more affordable route for improving comfort and health in homes; less disruption

Geographic scope

Individual properties or community areas

Roles and responsibilities

• Be aware of changes required to the way we heat homes
• Be aware of any local heat plans and the potential impact on their communities and homes
• Influence and feed into schemes, if relevant and of interest
• Understand the timescale for the switch and any 'back-stop' date on which fossil fuel infrastructure is to be decommissioned
• Understand the options for their home
• Make a switch at the most opportune moment for them
• Community groups may help with household engagement
• Community groups may propose and deliver community-owned clean-heat schemes
• Community groups may support the community in the transition, liaising with other stakeholders on behalf of households

What would those involved be responsible for?

We have split the process of planning and delivering a coordinated switch into five key stages:

1. Resourcing

Ensure that resources are provided to enable the formation of teams and that there is a strong and consistent signal for all involved on approach and direction; local zoning offers an initial plan for consultation from industry and citizens.

2. Planning

During this phase, the planning is refined at a local scale and local decarbonisation schemes are identified. Feasibility studies may be conducted on schemes that require high capital expenditure, for example, heat networks.

3. Procurement

The procurement of services would lean on existing procurement services provided by national governments. This is the stage where specialist organisations are procured to deliver schemes. There will most likely be a mix of public, private and community groups forming delivery bodies.

4. Delivery

Delivery would take different routes depending on the schemes being delivered. It may require shared infrastructure to be delivered before in-home technology, or it may just require in-home delivery.

5. Reporting

Valuable learnings will be elicited across the spectrum of planning and delivery that will help improve future plans and reduce risk and friction in delivery. We think that a designated reporting step would ensure that feedback is acted upon.

For each of the five stages, we have included a high-level summary of what each group would be responsible for on subsequent pages.

How might this work?

To illustrate how the proposal may work, and what the actors would be doing to progress from planning to delivery, we've illustrated a number of key journeys through the proposal.

1. How a local heat body would navigate zoning through to a roadmap of schemes

1. Local heat body – from zoning to a roadmap of schemes

As the local heat body, we have taken the Local Area Energy Plan (LAEP) provided by the combined authority and gone a step further. Using frameworks given by the National Heat Transition Unit (NHTU), we have started identifying the most suitable heating technologies for the different housing types and tenures on each street within our jurisdiction.

We have zoned the streets based on the suitability of specific heating technologies. These proposed heat zones have been published on our local government's consultation platform, utilising an existing third-party service like Commonplace.

We are actively promoting this heat-zone consultation both locally to residents and the supply chain. Delivery organisations have the opportunity to contribute to the consultation, offering local or national perspectives and experiences. Citizens and community groups are also encouraged to participate, suggesting changes to the proposed zoning, raising concerns, or expressing support. Community groups may propose community-led delivery models based on their involvement with local communities.

The NHTU has provided templates and guides on potential scheme structures to support our local heat body in moving beyond zoning and into developing deliverable schemes. We refine the zones, grouping areas to create sustainable and more commercially viable schemes. This approach offers flexibility in the implementation. For instance, one scheme could be an area-wide collective-purchasing agreement for air source heat pumps, with the zoning helping to quantify potential demand.

Once the schemes have been defined, our local heat body will prioritise them based on various factors, such as grid constraints, tenure, property types, and the affluence of the area. This prioritisation will create a roadmap that will be shared with the NHTU, which will act as a mediator for any potential negotiations with Regional Energy Strategic Planners and Distribution Network Operators.

The roadmap may need to be adjusted slightly to ensure that regional and national infrastructure supports the proposed schemes. Once finalised, we will publish the roadmap and proceed with the procurement of our priority schemes.

2. Local heat body – the delivery models it may utilise

3. Local heat body – from feasibility to procurement

As a local heat body, we start by zoning the local area based on guidance from the National Heat Transition Unit. We publish a consultation on this zoning.

We review feedback from the public consultation and National Heat Transition Unit (NHTU), zoning is amended as appropriate and we use guidance from the NHTU to start to move beyond zoning to define potential schemes and delivery models for areas.

We start to move into pre-market engagement where we meet with local and national delivery partners to discuss our draft schemes and delivery models. These conversations shape the schemes further, building fidelity and confidence in feasibility.

For relevant schemes, such as heat networks, we may commission third parties to run more in-depth feasibility studies. These would rely on templates from the NHTU that ensure feasibility procurement is quick and standardised. Funding for these would be released by the NHTU.

After pre-market engagement and feasibility studies, we submit a roadmap to the NHTU. Our priority schemes may need to be changed based on the feedback from the NHTU, Regional Energy Strategic Planners and Distribution Network Operators.

We then make the final decisions on planned costs/investments, financial/legal structures, and delivery structuring to translate into procurement contracts, using finance, legal and procurement expertise built internally. The NHTU is available to provide additional advice/support as needed.

We publish a contract notice. This would vary depending on the scheme, our resources and any feasibility model. It could take the form of a call for competition for joint venture partners or an invitation-to-tender for a concessionaire.

We decide to include a few key outcomes (requirements within procurement contracts) for the project, such as a minimum threshold for local workers.

We then move to awarding the contract. Drawing contracts from templates provided by the NHTU and ensuring that consumer protection and after-care considerations are included.

4. Delivery organisations – from consultation to successful bid

As a local networked heat pump provider we look at the heat zoning completed by the local heat body. We register our support for relevant zoning but also suggest amendments to the zoning to include properties we think may be suitable.

We ensure that we're signed up and accepted onto the national procurement platform. This means that we're ready to respond to opportunities in our area but also allows us to see the kind of schemes being put to tender nationally.

We see that the roadmaps are published by the local heat body. We are asked to consult on feasibility work for a number of the schemes, this may involve us being invited to meetings with competitors to discuss potential plans and hear more detail from the local heat body.

Priority schemes are uploaded to the national procurement portal. We prepare responses to our preferred schemes, building on the feasibility work to create a more in-depth system design. Due to the risk of shared infrastructure, we prefer to go further at this stage and state our preferred system design.

We're notified of winning the delivery of the scheme; in this instance we partner with local government. We agree on terms.

We start to notify households of the shared ground-array schemes, the cost to consumers and the sign-on dates - including any later connection opportunities. We work with the local authority to reach all households within the project area and notify them of any confirmed transition dates for their area, such as when their gas grid section will be decommissioned.

5a. Citizens – notification and installation of a low-carbon heating scheme: shared infrastructure

I have seen messages about the switch to low-carbon heat.

I'm made aware by a letter and the local authority's social media that a heat-zoning consultation will take place. Apparently, this will indicate what future technology is most suitable for my home.

I receive a letter notifying me that the zoning and consultation has been made public. I see that I am in a shared infrastructure zone. Some guidance is provided on what this means for my heating and the technology that would most likely be used.

I receive an email from the local heat body about plans for the heat transition in my street – a networked heat pump or a heat network might be installed on my street in the next three years. I learn more about different heating technologies.

I receive a letter from the local heat body about an offer from a developer of networked heat pumps. It describes the works planned for the next ten months, estimates of upfront and running costs and the benefits of connecting. I am given a clear point of contact.

I have the option to consult an advisor from the local heat body about my options. Alternatives to the networked heat pump are explained - I know the age of my boiler and the latest date at which I can replace it. I communicate with neighbours about the plan.

I decide not to commit in the first wave because my boiler is quite new. But I do start preparing my home to connect to the shared infrastructure in the future.

A year later, my boiler starts having issues. I opt for the networked heat pump, signing a contract with the developer. I choose a convenient date for in-home upgrades and am made aware of the plan for street disruptions.

Infrastructure is installed in my street. I am informed about the timeline and anything I need to do before installation work commences in my home.

A heat pump is installed in my home and connected. I pay the upfront cost, which is similar to that of a boiler replacement, with the government subsidy going straight to the network owner.

5b. Citizens – notification and installation of a low-carbon heating scheme: an individual heat source

I have seen messages about the nationwide switch to low-carbon heat.

I'm made aware by a letter and the local authority's social media that a heat-zoning consultation will take place. Apparently, this will indicate what future technology is most suitable for my home.

I receive a letter notifying me that the zoning and consultation has been made public. I see that I am in an air-source heat pump zone. Some guidance is provided on what this means and what an air-source heat pump is.

I receive an email from the local heat body about plans for the heat transition in my street. The best option for me will be an air-source heat pump. I learn more about heat pumps and their benefits.

I receive a letter from the local heat body about a collective-purchasing offer. It indicates a likely cost bracket and explains the benefits of heat pumps. I am given a clear point of contact.

I am offered the opportunity to consult an advisor from the local heat body about my options. Alternatives to the current offer are explained - I know the age of my boiler and the latest date on which I can replace it. I receive advice on associated upgrades to my home.

I express initial interest in purchasing a heat pump alongside my neighbours. I am informed of the work needed if I decide to have a heat pump installed.

I receive a quote for the installation of a heat pump from the local heat body's chosen supplier. As my boiler is quite old and I'm already planning some renovation work, I decide to accept the introductory offer.

The supplier has secured an installer to come and put a heat pump in my home, plus make associated upgrades. I am made aware of how to maintain the new system and my rights as a consumer.

6. National Heat Transition Unit – ensuring there is feedback and evaluation

As the National Heat Transition Unit, we actively provide support to local heat bodies as they form teams, draft proposals, and conduct pre-market engagement. We may proactively reach out to local heat bodies for informal check-ins and offer assistance. Through the support provided and reviewing of drafted plans, we identify necessary additional guidance and update the national playbook to reflect any recommendations that may improve local heat bodies' drafted plans.

If local heat bodies find the national resources to be missing key contract templates, and/or if guidance is proving insufficient for procurement and structuring, they should contact us to address these gaps.

As tenders and responses are received on the national procurement portal, we evaluate competitiveness across project categories and assess whether supplier constraints are needed. We refine the national playbook based on live data, such as the risk/opportunity balance attractive to private investment for different projects and structures.

If local heat bodies face issues with contract conditions or lack of leverage hindering the achievement of key outcomes, they should report these challenges as encountered. We update templates and guidance accordingly and provide additional support and leverage where possible.

Local heat bodies report simplified metrics annually and more detailed reports every five years. In the first two years, they provide additional detail to identify outliers for case studies, to refine national best practice guidance. We'll engage delivery organisations for limited case studies consolidating these to refine guidance.

We may facilitate and/or engage with a couple of working groups to refine guidance - such as one on individual homes and one on infrastructure. The infrastructure working group includes RESPs, DSOs, GDNs, and a rolling membership drawn from different local heat bodies, highways authorities and planning authorities. This group would highlight potential improvements to coordination, to align on key outcomes and enable more cost-saving opportunities.

We'll use standardised metrics to track progress against our national heat transition goals such as gas grid decommissioning, transitioned homes and their heat efficiency, and supply chain growth. While we will provide additional support as needed, we may require that any underperforming local heat body take certain actions in order to receive our support for any new schemes.

Our recommendations

There is a strong case for the UK to develop a coordinated approach to low-carbon heating. This approach would require new or strengthened institutions and additional resources but would bring a number of benefits to government and households. We recommend developing this approach gradually, building on existing policy successes, such as the Heat Networks Delivery Unit. This coordinated approach should aim to gradually scale up over time, complementing the individual-led approach that the UK currently uses.

To scale up a coordinated approach, we recommend the following actions as first steps:

1. Develop local heat bodies in as many areas as possible, to fill the gap in heat planning and coordination at a local, granular level.

These bodies should look at the creation of heat zones, consulting industry and the public, before identifying more granular deliverable schemes. Understanding the resources, guidance and playbooks required by local areas to deliver these plans will be critical.

Bodies should be built from the ground up and be flexible to accommodate the local context. The development of local bodies should build on this work, convening stakeholders to understand their requirements, ultimately de-risking roll out.

2. Pilot the development of several communal shared-infrastructure schemes.

Government should fund these pilots in some of the more advanced local areas, which are most likely to be city regions. These should vary in approach to technology, property and tenure type. The pilots should understand how a scheme could be designed, communicated with households, put to tender and delivered using a competitive bidding process. These pilots should seek to understand to what extent schemes require guarantees by the government to mobilise private finance.

3. Pilot a coordinated approach to individual home upgrades.

Government should fund these pilots in some more advanced local areas. These pilots should focus on how groups of homes could benefit from switching to individual low-carbon heat sources (i.e. air source heat pumps). The pilots should understand the extent to which local government-led low-carbon heat zoning and planning is enough to signal to households and trigger action. The pilots should test commercially viable offers for collective purchasing and potential partnerships with finance providers. This approach could look similar to the group-purchasing of solar panels, operated by a third party in partnership with a local authority.

4. Data gathering and feedback loops should be piloted as part of recommendations 2 and 3 above.

The role of a national agency should be examined to ensure that it is providing the best possible support for delivery partners and local government. The pilot should also seek to understand how this information should be integrated back into guidance, playbooks and the formation of teams at local government level.

Alongside these specific recommendations, participants in our workshops also consistently raised a number of wider policy measures that are worth considering:

• Reducing the price ratio of electricity to gas
• Setting clearer dates for gas grid decommissioning
• Introducing a mandate to connect to communal infrastructure – for new builds, large consumers and building owners, in line with the Department for Energy Security and Net Zero's current heat network zoning proposals. We do not expect this would apply to existing individual homes

58 Victoria Embankment London EC4Y ODS +44 (0)20 7438 2500 [email protected] X @nesta_uk f nesta.uk www.nesta.org.uk ISBN: 978-1-916699-26-7

Nesta is a registered charity in England and Wales with company number 7706036 and charity number 1144091. Registered as a charity in Scotland number SC042833. Registered office: 58 Victoria Embankment, London EC4Y ODS. CC BY NC SA