Heat networks, regulated from 27 January 2026

Ofgem now regulates your heat network. Here is how to be ready.

From 27 January 2026 heat network operators and suppliers in Great Britain must meet Ofgem's authorisation conditions: fair standards of conduct, written heat supply contracts, accurate metered billing, a complaints process that ends at the Energy Ombudsman, a priority services register and records that prove it all. Most operators have never run a regulated billing function. We have, and we set them up.

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27 Jan 2026
Authorisation conditions in force
12 months
Back billing limit for heat customers
5 years
Performance records operators must keep
Who is affected

Landlords, housing associations, councils, developers and ESCOs are now energy suppliers in the eyes of the regulator

If you supply heat through a network, the conditions apply whether or not you think of yourself as an energy company. Bills must be accurate and, on metered networks, based on actual readings taken at least once a year. Back billing is a last resort limited to twelve months. Customers need a heat supply contract, a complaints route, a priority services register and protection from disconnection in winter or where vulnerable people live. Operators must maintain the network to good industry practice and keep performance records for five years. Ofgem has said its early focus is support rather than enforcement, which makes this the cheapest moment to get it right.

What we do

From the regulations to an operation that meets them

Compliance gap review

A short, fixed scope review of your networks against every authorisation condition, with a prioritised plan: what is already compliant, what needs a process, what needs a system, and what it will cost.

Billing and metering set up

Selecting and implementing a billing and metering approach with no vendor ties, from meter data and tariffs through to accurate bills, annual actual reads, back billing controls and the cost data you need to evidence fair pricing.

Customer operations and evidence

Heat supply contracts, a complaints process that works before the Ombudsman is involved, the priority services register, vulnerability and disconnection safeguards, and the records Ofgem and your residents will ask to see.

Why PEF

Regulated billing is what we do

We have delivered billing and customer platforms for regulated energy and water suppliers, controlled £9bn of public money for Ofgem and government, and we sit on no vendor's side. We do not design heat networks, and we say so. What we bring is the discipline of a regulated supplier, applied to organisations that have just become one.

See our Ofgem compliance work

FROM DECISION TO VALUEThe route we take a system through01CaseCase and options02SelectIndependent selection03DesignDesign to the case04BuildControlled build05TestTest to evidence06Go liveCutover and hypercare07BenefitsTracked and bankedNo software to sellSenior led at every stepAssured by people who have done it
How we work

Proportionate, documented, defensible

Every authorisation condition mapped to an owner, a process and a record
Billing built on actual meter data, with back billing controls from day one
Evidence designed for a regulator, not reconstructed for one
No vendor ties on metering or billing systems
Common questions

Heat network regulation, answered

Does this apply to a small residential network?

If you supply heat, hot water or cooling through a network in Great Britain, the authorisation conditions apply. Scale affects how much process you need, not whether the rules reach you.

Our heat costs go through the service charge. Are we still covered?

Yes. The billing and conduct conditions apply alongside the Landlord and Tenant Act limits on service charges. Ofgem encourages keeping back billing to twelve months even where the statutory limit is longer.

Do we need a new billing system?

Not always. Many operators need accurate meter data, a tariff structure and a process before they need software. The gap review tells you which, and when a system is needed we select it with no vendor ties.

How long does a gap review take?

A few weeks for a typical portfolio. You get a condition by condition view of where you stand and a prioritised plan with costs and owners.

What happens if we are not compliant yet?

Ofgem has said its early focus is guidance and support, with enforcement for extreme cases. A documented plan that you are visibly working through is what they expect to see, and it is also what protects you if a complaint reaches the Ombudsman.

Can we get funding to improve our heat network?

Possibly. The Heat Network Efficiency Scheme offers grants for optimisation studies and part funding for improvements to existing networks in England and Wales, subject to eligibility and the budget in each funding round.

Funding

The Heat Network Efficiency Scheme

The Heat Network Efficiency Scheme, HNES, is a £107 million government grant scheme for existing heat networks in England and Wales, run for the Department for Energy Security and Net Zero. Revenue grants can cover up to 100% of an optimisation study into why a network performs poorly, and capital grants can fund up to, but not including, half the cost of the improvements, with priority for networks serving residential customers in need. Funding runs in rounds, with the next expected to open on 30 November 2026, subject to budget. With Ofgem regulation now in force, it is worth using the scheme to fix performance problems before they become compliance problems.

Related reading

Working with a billing agent?

Our explainer on heat network billing agents and the Ofgem rules sets out who carries the obligations, what changes for bills and complaints, and six things to check in your agent contract.

Be ready before the first complaint reaches the Ombudsman

A gap review takes a few weeks and tells you exactly where you stand. Start there.

Book a confidential conversation