Routine checks carried out by quality watchdog TrustMark have uncovered widespread cases of botched solid wall insulation on homes.
The Government has now launched a crackdown on firms that fitted insulation panels since 2022 under the Energy Company Obligation 4 and Great British Insulation Scheme.
It said it would urgently review how installers are certified and monitored. Ministers have also separately instructed the energy regulator Ofgem to take oversight of remedial work to ensure it is swiftly delivered.
Installers responsible for substandard work will be forced to make good work at no cost to households.
They will remain banned from installing new solid wall insulation on any government scheme if they fail to do so.
Failings under the Government scheme range from missing or incomplete paperwork, insufficient ventilation, or missing or exposed insulation, which if left unchecked could lead to damp and mould.
Other insulation schemes involving cavity wall insulation and spray foam insulation are not part of the new crackdown.
Ofgem has now begun writing to all the households affected, explaining that qualified professionals have started a system of checking every installation under these schemes.
Minister for Energy Consumers Miatta Fahnbulleh said: “I know this news will be concerning for people who have had external or internal wall insulation fitted through either scheme we have inherited.
“That is why we are taking action to put this right, forcing installers to fix any poor-quality installations as soon as possible and at their own expense.
She added: “It is clear the existing system of protections for consumers we inherited is in dire need of reform. This will be front and centre of our Warm Homes Plan, as we work to make sure no households are let down in this way again.”
She said that it was now clear the system could no longer command confidence, and ministers would now press ahead with a sweeping overhaul through the Warm Homes Plan, so that people could be confident of the quality of upgrading and insulating homes.
This would involve tightening regulations on how installers working in people’s homes are certified and monitored, to where homeowners turn to for rapid action and enforcement if things go wrong.