Ofgem missed its own network investment targets last year, by a margin that will cost households time and money. The regulator confirmed that spending on the electricity distribution grid fell short of planned levels, as reported by Business Live. Meanwhile, Northern Powergrid announced a £1.4bn investment in the North East, a rare piece of good news for homeowners in that region, but a reminder of the patchy, postcode-lottery nature of grid upgrades across the UK.
Why grid delays hit your wallet
Every time the grid misses a target, the cost lands on household bills. Network charges make up about 12% of the typical electricity bill, according to Ofgem’s latest breakdown. If investment slips, those charges don’t fall, they stay flat or rise, because the network companies still recover their allowed revenue. For a typical 3-bed semi using 3,100 kWh a year, that’s roughly £24 a year in network charges alone, regardless of how much energy you actually use. The missed targets mean those upgrades are simply deferred, not cancelled. So the bill stays, but the work doesn’t happen.
But the bigger problem is connection delays. Homeowners wanting to install a heat pump or solar panels increasingly face grid capacity constraints. National Grid ESO has warned that some areas will need transformer upgrades before new low-carbon technologies can connect. Ofgem’s missed targets mean those upgrades are pushed back, and so is your heat pump installation.
Northern Powergrid, the exception that proves the rule
Northern Powergrid’s £1.4bn plan is a genuine bright spot. The company will upgrade substations and reinforce lines across the North East, which should speed up connections for the 3.9 million customers it serves. But this is one of 14 distribution network operators in the UK. The rest are operating under Ofgem’s RIIO-2 price control, which runs until 2028. Early signs are mixed: some have underspent on their allowances, others have hit targets. The result is a fragmented picture where a homeowner in Newcastle might get a heat pump connection in weeks, while someone in rural Cornwall waits months.
The catch is that network upgrades are funded by all billpayers, not just the region that benefits. So households in the South East are effectively subsidising Northern Powergrid’s investment, while their own local network may still be playing catch-up. Ofgem’s missed targets don’t help anyone, they just mean everyone pays more for less.
What this means for your EPC and home upgrade plans
If you’re planning to improve your home’s EPC rating, and 60% of UK homeowners say they are, per a 2024 Energy Saving Trust survey, grid capacity is the hidden bottleneck. A heat pump can add up to 15 points to an EPC rating, but only if the grid can handle the load. Solar panels can push a D-rated home to a C, but only if the local substation has spare capacity. Ofgem’s missed targets mean that capacity is being built slower than planned.
For now, the best advice is to check with your local distribution network operator before committing to a heat pump or solar installation. Ask about connection costs and timelines. Some operators offer free pre-application checks. And if you’re in the North East, you may be in luck, Northern Powergrid’s investment should start to show results within 18 months. For everyone else, the wait continues.
What to do next
Check your local DNO’s upgrade plans on its website. If you’re in a region with slow investment, consider delaying non-urgent upgrades until capacity improves. For heat pumps, the Boiler Upgrade Scheme still offers £7,500 off installation costs until 2028, but you need a confirmed grid connection within that window. Don’t assume the grid will be ready. Call your DNO and ask. And write to your MP about Ofgem’s missed targets: the regulator answers to government, not to households. The more noise homeowners make, the harder it is for targets to slip again.
Frequently Asked Questions
Contact your local Distribution Network Operator (DNO), find yours via the Energy Networks Association postcode checker. Ask for a 'connection capacity check'. Most DNOs do this for free and will tell you if your local substation needs upgrading before you can install a heat pump or solar panels.
No. Network charges are set by Ofgem's price controls, not by actual spending. If investment targets are missed, the allowed revenue stays the same, so your bill doesn't fall. The money is simply spent later, meaning you pay now for upgrades that happen in the future.
