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News 17 September 2020

Be bold: warm homes by 2030 for a green recovery

As the UK Government prepares to launch the £2 billion Green Homes Grant (GHG) scheme, we look at how this could be a springboard for an ambitious action on England’s 16 million thermally inadequate homes.

As a down-payment on the £9.2 billion of energy efficiency investment set out in 2019 Conservative manifesto, the GHG is an excellent start. But, to sustain the jobs and economic benefits we need to maintain this rate of delivery.

The Government committed over £9 billion in its 2019 manifesto for energy efficiency. If the remaining investment were to be bought forward in this parliamentary session and then matched in 2024-2028, we could fulfil this commitment. The public contribution would stimulate over three times the level of private investment (or more, if, as we recommend, that homeowners are encouraged to retrofit to a higher standard on a voluntary basis).

Just as the phase out date for petrol and diesel cars has been pulled forward, it is time to upgrade our ambition for homes – to improve ‘as many homes as possible to an adequate standard of energy efficiency by 2030’ (a minimum of Energy Performance Certificate level C or equivalent fabric standard).

Any new programme needs to tackle the issue of demand head on. We don’t insulate our homes for a myriad of reasons. But mainly we don’t, because (like successive governments) we’ll get round to it at some point. Minimum standards are necessary to overcome this inertia barrier and to speed up deployment – relying on voluntary action alone will not be get us to net zero by 2050.

For this reason, we recommend new regulation requiring homes to reach this minimum standard before sale / rent or major renovation (with the date set between 2026-2030, partly depending on the level of fiscal stimulus).

Regulation won’t be enough by itself; it needs to be part of a wider framework of support including funding (for low-income households), finance and incentives, and technical and practical support.

Ultimately, getting our homes to net zero rests on persuading people to make (or accept) changes to their homes – and, given the scale of investment required, on most of us underwriting the cost (ideally as voluntary consumers). While the market can make it attractive (financially or otherwise) to act and the minimum standards can help ‘make the market’ and require certain sectors to act, there won’t be large-scale uptake unless people feel comfortable about moving away from what they know.

It is this area – engagement – where we need the real boldness. The first two stages are information and ‘buy-in’. While the public are generally supportive of action to tackle climate change, there is widespread confusion on what they need to do. A government-backed communication campaign to provide a strong narrative, key messages on what net zero means for our homes, our cars and way of life is needed here. On ‘buy in’, we suggest more citizen involvement in decision-making – building on the UK Climate Assembly process – so that people are part of the change rather than having net zero being ‘done’ to them.

Where we need to focus is the third stage – tipping people from knowledge or acceptance to action. This is where, if the Government can get it right, it can reduce the cost and speed up the transition by getting customers (driven by the market within a framework of regulation) to invest. The scale of change we need requires more than just linear knowledge provision and could be delivered by the creation of a new low carbon homes advisory service for England, which focuses on the uptake of complex measures and unfamiliar technologies.

To ensure that, where appropriate, homeowners rather than the state finance the improvements, homeowners will need to be able to access adequate and convenient finance to do this. This could include loans and other financial products, building on the recommendations of the Green Finance Institute.

If not now, then when?

We can’t get to net zero emissions without first fixing our leaky homes. From 2030, the focus needs to shift from this preparatory work to rolling out low carbon heat at scale. The pandemic-induced economic crisis now means that this necessary work can support our economic recovery.

One of the overriding messages that emerged from the recent Climate Assembly report was a call for greater urgency. Mark, one of the Assembly members, summed this up when asked to give a final message to politicians: “Don’t be scared, be bold, aim big. People are willing to change if educated properly and given the facts.”

Read our full position on warm homes by 2030 and our supporting information document.

Last updated: 26 January 2021