Decarbonising heat in UK care homes

Care homes play a vital role in communities across the UK, but their heating systems are now under the spotlight. A Baxi survey of over 400 care home managers reveals a sector eager to decarbonise but facing major barriers in funding, skills, and access to guidance. 

Across the UK, around 17,000 care homes are responsible for close to 1.5 million tonnes of CO₂ emissions every year. Some 40% of those emissions come from heating, cooling and lighting, with water heating alone accounting for up to 30% of daily energy use at peak demand. 

Yet many care homes are struggling under financial pressure. A third of providers are reportedly considering exiting the market, while over two-thirds have sought internal efficiencies and a third have curbed investment. Three in 10 have even closed parts of their organisation or handed back contracts. Against this backdrop, the challenge of decarbonisation can feel overwhelming – but the latest findings from Baxi show the appetite for change is still strong. 

Appetite for decarbonisation 

Baxi’s survey of 404 senior and middle management care home leaders, conducted across both public and private sectors, found that almost all respondents are already acting or planning to act. Nearly 97% of care homes surveyed had either already decarbonised (46%) or were taking steps to do so (50.5%). Only around3% had not yet begun the journey. 

Among those yet to decarbonise, 88.5% said they have future plans to do so, showing an industry that is motivated but often uncertain about how to proceed. However, the data also suggests that while enthusiasm is high, confidence and capacity to deliver are not. 

The challenge of heating 

Gas boilers remain the dominant heating system across the care sector, with 42% of respondents naming them as their main source of heat. The majority of care homes have relatively modern systems – 79% had replaced theirs within the last six years – and 77% of staff rated their current system as “good” or “very good”. These figures highlight a key issue: satisfaction with existing systems can dampen the urgency to change, especially when cost and reliability are top concerns. Any transition to low-carbon heat therefore needs to deliver affordability and dependability. 

The survey found that 85% of managers view running costs as an important or very important factor in decisions to decarbonise. Energy efficiency (42%) and ease of installation (39%) were also cited as major drivers, alongside system reliability and alignment with net-zero targets. Focus group participants, including care home energy managers and a mechanical and electrical contractor, emphasised that continuity of heat is essential to maintain quality of care. For many, the initial steps to decarbonisation involved optimising their current systems – such as setting lower flow temperatures or improving controls – rather than replacing them entirely. 

What technologies are being considered? 

Solar energy emerged as the most popular low-carbon technology among survey respondents, closely followed by hybrid systems, heat pumps and heat networks. Hybrid heat pumps were slightly preferred to standalone models (43% vs 41%). Boiler replacements continue to be common, creating a significant opportunity for low-carbon alternatives to gain ground in the refurbishment market. Several focus group participants noted that optimisation work was often being undertaken in preparation for a future transition to heat pumps. 

Almost half of respondents said their decarbonisation projects related to new-build rather than retrofit schemes, which could indicate that cost remains a deterrent to retrofitting existing facilities. Nevertheless, all respondents planned to decarbonise within ten years, and 45% said they aimed to do so within the next one to three years. 

Barriers to progress 

Despite this strong intent, significant obstacles remain. When asked what would help accelerate progress, more than 40% of managers identified the need for technical advice, easier access to funding, and case studies from other care homes as key enablers. Respondents also highlighted the importance of practical guidance on procurement and installation, as well as training for internal staff. 

The focus group echoed these findings, calling for clearer information on when to replace heating systems and how to create achievable decarbonisation plans. Participants also wanted advice from manufacturers on viable changeover points and support from consultants to identify financially and operationally realistic pathways. 

The funding dilemma 

The survey shows that 94% of respondents either have, or expect to have, a budget for decarbonisation. However, most of these budgets are modest. The most common allocation sits between £40,000 and £50,000, while 71% of respondents reported budgets between £30,000 and £70,000 – levels that may be insufficient for comprehensive system replacement projects, depending on the size and complexity of the care home. 

Almost all respondents had either applied for, or considered applying for, public funding. The Local Authority Delivery (LAD) scheme and the Public Sector Decarbonisation Scheme (PSDS) were the two most popular routes, with 53% and 50.5% of managers respectively exploring these options. 

Yet many reported serious challenges when navigating funding applications. The top difficulties included a lack of internal resource or expertise to complete applications, complex processes, short windows for submission, and the high level of additional work required to meet strict eligibility criteria. Some public-sector respondents also mentioned delays in competition and perceived “bias or discrimination” in funding decisions. These barriers are particularly concerning given that the majority of managers surveyed are not energy or construction professionals. Without specialist support, the process of decarbonising – even when the desire is there – can feel opaque and inaccessible. 

Why care homes must decarbonise 

Care homes are subject to a unique set of regulatory, environmental, and social pressures. They fall under both general energy legislation and health-specific frameworks. 

Under the Energy Savings Opportunity Scheme (ESOS), large organisations must assess and report on their energy usage. Phase 4 of ESOS, due in 2027, will further tighten compliance requirements. In parallel, Minimum Energy Efficiency Standards (MEES) require privately rented non-domestic buildings to achieve an EPC rating of E or above – with proposals to raise this to EPC C by 2028. A similar consultation is expected to extend the requirement to public-sector care homes by 2030. 

Beyond regulation, social and market drivers are also playing a role. Investors increasingly prioritise Environmental, Social and Governance (ESG) performance, meaning that low-carbon care homes are more attractive to funders. Sustainability credentials can also help with staff recruitment and retention, particularly among younger, more climate-conscious workers. For families and residents, an environmentally responsible provider may carry reputational appeal and align with their own values. 

Policy recommendations 

Drawing on its research and focus group findings, Baxi has set out five clear policy recommendations to accelerate heat decarbonisation across the care sector: 

1. Introduce funding schemes and ring-fence specific funds for care home heating system decarbonisation, to give providers clarity and confidence. 

2. Provide specific guidance on eligibility and application processes for these funding schemes, ensuring care home leaders can navigate them effectively. 

3. Address the sector’s skills gap, particularly around technical knowledge, procurement, and access to grant funding. 

4. Create national databases of contractors and developers experienced in delivering heating projects within the care sector. 

5. Tackle the imbalance in price between gas and electricity, accelerating plans for rebalancing levies so that electrical heating systems become more affordable. 

These steps, Baxi argues, would give the care home sector the focus it urgently needs – providing clarity for managers, stimulating the supply chain, and unlocking the potential for a coordinated push towards net zero. 

A net zero blind spot 

Jeff House, Director of External Affairs and Policy at Baxi, believes the findings underline a pressing need for targeted action. He said: “It’s encouraging to see from the survey that there is clear appetite among care home leaders to decarbonise their heating and hot water provision. But the evidence of some clear barriers means there is plenty to be done in order to make this ambition a reality.  

“We’d like to see the Government give the care sector some much-needed focus through funding dedicated to heating decarbonisation, and specific guidance around eligibility and access. Doing so will not only ensure the sector benefits from clarity and certainty, but will also ensure the wider supply chain can be mobilised in a bid to tackle what has felt like something of a net-zero blind spot up to now.” 

Towards a sustainable future 

For care homes, the path to decarbonisation is complex but unavoidable. Regulatory pressures, financial constraints and operational challenges all intersect with the fundamental responsibility to provide safe, warm, and reliable care for residents. 

The Baxi survey shows that the will to change is overwhelmingly present – yet without tailored support, technical guidance and fair access to funding, that ambition risks stalling. With clearer policy direction and better-targeted resources, the sector could turn its enthusiasm into tangible progress – improving energy efficiency, cutting costs, and helping the UK move one step closer to its net zero goals. 

www.baxi.co.uk/commercial