The UK’s heat network sector has entered a new regulatory phase, with formal oversight coming into force from 27 January 2026.
The changes bring heat networks under the authority of the national energy regulator, extending consumer protection rules, pricing expectations and service standards to a part of the energy market that has grown rapidly but remained largely unregulated.
The shift has direct implications for retail and commercial buildings that rely on communal heating and hot water systems.
New rules bring heat networks into line with regulated energy markets
Heat networks supply heating, cooling or hot water from a central source to multiple homes or businesses, and are commonly used in shopping centres, mixed-use developments, offices and large retail estates.
Until now, customers connected to these systems did not benefit from the same protections as gas and electricity users.
Under the new framework, heat network operators and suppliers must meet clear requirements on customer service, billing transparency and pricing fairness. The regulator has set expectations that charges should be understandable, based on underlying costs and communicated clearly to end users.
This marks a significant change for a sector where pricing structures and service standards have varied widely.
Companies operating heat networks are required to register with the regulator and comply with a set of authorisation conditions. These include handling complaints effectively, supporting vulnerable customers and maintaining reliable service.
A transitional period allows firms time to complete registration and adapt systems, with full registration expected by early 2027.
Implications for retail property owners and commercial operators
Retail and commercial buildings are among the largest users of heat networks, particularly in urban developments and large property portfolios.
Landlords, managing agents and facilities managers will need to understand how the new heat network regulation applies to their sites, even where heating services are outsourced to third-party operators.
The rules may influence operating costs, service contracts and reporting obligations.
Property owners will need to ensure that heat network arrangements meet regulatory standards and that customers, including retail tenants, receive accurate billing and clear information about energy charges. In some cases, this could prompt reviews of existing supplier agreements or metering arrangements.
For retailers occupying buildings served by heat networks, the changes are expected to improve visibility over heating costs and service performance. Clearer rules on pricing and complaints handling may also help reduce disputes between tenants, landlords and heat suppliers.
Regulatory oversight aims to support long-term investment and trust
The introduction of heat network regulation is also intended to support long-term investment in low-carbon heating infrastructure. Heat networks are seen as a key part of the UK’s wider energy transition, particularly in dense commercial and residential areas where electrification may be challenging.
By setting minimum standards and providing a clearer compliance framework, the regulator aims to improve confidence among customers, property owners and investors. Enforcement powers are available where firms fail to meet their obligations, although the regulator has indicated it will focus first on guidance and engagement to help the sector adjust.
For the retail and commercial property sectors, the start of heat network regulation represents a structural change rather than a short-term policy update.
Businesses with exposure to communal heating systems will need to monitor compliance closely as the rules bed in, ensuring that buildings, suppliers and contracts align with the new regulatory environment.
