Heat Network Billing and Metering Changes: What landlords need to know in 2025

Big changes are on the horizon for landlords operating properties with communal heating systems. With the Energy Act 2023 bringing heat networks under Ofgem regulation and full enforcement due by 2026–2027, now is the time to prepare for new billing and metering requirements.

Here’s what you need to know to stay compliant, protect your tenants, and avoid financial penalties.

What's changing? 

The Energy Act 2023 introduces a new regulatory regime for heat networks:

• Ofgem will become the official regulator for heat networks by 2026.
• Landlords who supply heat (usually through communal systems) will be classified as “heat suppliers”.
• All heat suppliers must provide transparent, consumption-based billing, which means compliant metering is essential.

New metering requirements

Under the new rules, landlords must:

• Install accurate individual heat meters or heat cost allocators wherever technically and economically feasible.
• Ensure that billing is based on actual consumption, not estimates or flat fees.
• Provide tenants and leaseholders with clear billing information, similar to what is expected from gas and electricity suppliers.

Billing transparency and fairness

The new regulations aim to improve fairness and consumer protection. You must:

• Pass on any government energy subsidies, for example, the Energy Bills Discount Scheme, in a “just and reasonable” way.
• Provide itemised bills and consumption data to residents.
• Offer simple complaints handling and routes to redress; this will be likely through the Energy Ombudsman.

What does this mean for you as a landlord?

These requirements could affect:

• Your capital budget: Installing or upgrading meters and integrating new billing software will cost money.
• Your service charge structure: You may need to separate energy billing from other service charges.
• Your operations: You’ll likely need to train staff or partner with metering specialists to manage compliance.
• Any leases or tenancy agreements: You’ll need to review these to reflect the regulatory requirements, including heat supply terms and consumer protection provisions.

Is funding available?

Yes, but it’s limited:

• The Heat Network Efficiency Scheme (HNES) offers some funding for metering and system upgrades.
• Local authorities and retrofit grants, such as the Warm Homes Grant, may help in certain cases.
• You’ll still need to plan for upfront costs, especially if metering needs to be retrofitted across multiple properties.

What happens if you don't comply? 

From 2026, Ofgem will have the power to:

• Fine landlords who fail to comply.
• Enforce corrective actions or compensation for residents.
• Publicly name non-compliant suppliers.

Timeline of events

Here’s what the next two years look like in implementing this new legislation:

What should landlords already be doing?

Landlords should already be looking at conducting technical audits of all unmetered heat networks as well as mapping out funding or applying for grants.

The new metering and billing rules mark a major shift in how heat networks are managed. For landlords, this is both a challenge and an opportunity - to improve efficiency, support sustainability goals, and offer better service to residents.

Take action now 

• Audit your buildings for metering readiness
• Budget for installations or upgrades
• Start engaging residents and updating lease agreements if needed

Need help creating a compliance roadmap? Reach out to get in touch with our experts for support navigating the changes.