Do Care Homes Get Help With Energy Bills?
Managing a care facility in the current economic climate is a complex operational challenge. Energy is a major overhead for care homes, where heating, lighting, laundry, catering, medical equipment and 24-hour occupancy all contribute to high and consistent usage. Many operators are therefore asking: do care homes get help with energy bills?
The position has changed significantly in recent years. The emergency business energy support schemes introduced during the early 2020s have now ended, and there is currently no equivalent universal government assistance with energy bills for care homes. However, that does not mean operators are without options. Care providers may still be able to reduce costs through energy efficiency measures, procurement reviews, reduced VAT, grant opportunities and improved contract management.
In this guide, our energy specialists explain what help your business may be able to access with care home energy costs and the practical steps care homes can take to reduce overheads and improve long-term energy efficiency.
VAT reductions for care facilities
Most non-domestic business energy is charged at 20% VAT. However, care homes may qualify for the reduced 5% VAT rate where energy is used for qualifying domestic or residential purposes.
This can apply because a care home is not simply a commercial premises. Residents live at the property, and much of the energy used supports their accommodation, care and day-to-day welfare.
Qualifying use may include energy used for:
- Bedrooms.
- Communal living areas.
- Kitchens and dining areas.
- Bathrooms and washing facilities.
- Heating and hot water.
- Lighting.
- Facilities directly connected with resident care and welfare.
The correct VAT treatment depends on how the care home operates and how energy is used across the site.
For example:
- A residential care home may qualify for the 5% VAT rate on qualifying fuel and power.
- A nursing home may also qualify where energy is used for residents’ accommodation and care.
- Mixed-use sites may need to split energy use between qualifying residential use and non-qualifying business use.
- Charity-run care homes may have additional considerations where energy is used for non-business charitable activities.
Care home operators should keep clear records showing why the reduced rate applies. This may include evidence that residents live at the property and that energy is used to support accommodation, care and welfare rather than purely commercial activity.
Energy suppliers may not apply the 5% rate automatically. Care homes should check their utility bills to see whether VAT is being charged correctly. If VAT has been charged at 20% when the 5% rate should apply, the care home may be overpaying. If the reduced rate has been applied incorrectly, HMRC may ask for underpaid VAT to be corrected.
Localised green grants
While there is no single UK-wide grant for business energy improvements, some local authorities, combined authorities and regional growth organisations offer funding to help businesses reduce energy consumption and carbon emissions.
Depending on where your care home is located, support may be available for projects such as:
- LED lighting upgrades.
- Heating and boiler improvements.
- Insulation.
- Solar panels and battery storage.
- Heat pumps.
- Building energy management systems.
Eligibility, funding levels and application windows vary between regions. It is worth checking with your local council or Local Enterprise Partnership successor organisation to see what support is currently available.
Audit your energy use
Understanding how your care home uses energy is one of the most effective ways to identify opportunities to reduce costs.
An energy audit reviews where electricity and gas are being used across your site and highlights areas where energy may be wasted. It can also identify whether your current energy contract still reflects your usage patterns.
An audit may reveal opportunities to:
- Reduce unnecessary electricity consumption.
- Improve heating and hot water efficiency.
- Replace older equipment with more energy-efficient alternatives.
- Review operating hours for lighting, ventilation and laundry equipment.
- Identify whether your current energy tariff matches your actual energy usage.
Even small improvements can reduce overall energy costs over the life of your business energy contract. Reviewing your energy usage before your renewal date also provides a stronger basis for comparing business energy quotes from various energy companies and selecting a tariff that reflects how your care home operates.
Lowering costs through energy efficiency
With direct energy bill subsidies limited, care homes should also look at how energy consumption can be reduced across the site. Cutting wasted energy can lower long-term costs and make future energy contracts easier to manage.
Infrastructure upgrades
Improving the building and equipment can reduce daily energy demand.
Common upgrades include:
- Replacing older lighting with LED lighting.
- Upgrading kitchen equipment to more energy efficient appliances.
- Reviewing laundry equipment, especially where washing and drying runs throughout the day.
- Improving insulation to reduce heat loss.
- Installing better heating controls for resident rooms and communal areas.
For care homes, small changes can have a large impact because heating, hot water, laundry and catering often run every day.
Central heating and the Boiler Upgrade Scheme
Heating is one of the largest energy costs for many care homes. Older heating systems, inefficient boilers and poorly controlled electric heaters can increase costs, particularly in larger residential settings.
Care home operators may want to review whether their current heating system is still suitable. In England and Wales, the Boiler Upgrade Scheme provides upfront grants towards eligible heat pumps and biomass boilers for homes and some non-domestic buildings.
Eligibility depends on the property, current heating system and installation type, so care homes should check the scheme rules before planning any work.
Smart technology and monitoring
Smart meters and digital monitoring tools can help care homes understand when and where energy is being used. This can make it easier to spot unusual usage, check the impact of equipment changes and prepare more accurate data before comparing business energy quotes.
Useful steps include:
- Reviewing half-hourly or smart meter data where available.
- Checking for usage spikes outside normal operating patterns.
- Comparing weekday, weekend and seasonal demand.
- Monitoring high-use areas such as kitchens, laundries and plant rooms.
- Using supplier portals to review bills, readings and payment history.
If a care home uses a prepayment meter for any part of the site, management should make sure digital top-up arrangements are reliable and monitored. This reduces the risk of emergency outages in areas that depend on continuous energy supply.
Secure your care home's energy costs
Managing care home energy costs takes more than simply renewing your contract each year. With wholesale prices changing regularly and rising energy costs continuing to affect non-domestic consumers, reviewing your energy contract before renewal will mean you secure greater cost certainty and avoid paying more than necessary.
At Business Utility Hub, we specialise in helping care homes compare business energy contracts from a trusted network of UK suppliers. We check the energy market every day, compare current unit prices and explain your options clearly, so you can make an informed decision before signing a new agreement.
Whether you're looking to reduce your electricity bill, secure a competitive fixed tariff or review whether your current contract still reflects your energy usage, our team is here to help. You'll receive straightforward advice, a dedicated account manager and support throughout the switching process, from comparing suppliers to managing your renewal.
If you're responsible for your care home's energy procurement, now is a good time to review your current contract before your renewal window closes.
Contact us today for a free, no-obligation review.
- Call: 0800 781 2700
- Email: savings@businessutilityhub.co.uk
