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News 8 December 2020

Coordinated and collaborative action is needed on housing to meet net zero

by Mike Thornton, Chief Executive 

The extension to the Green Homes Grant scheme is a vital part of the government’s recent ten-point green plan – improving the energy efficiency of homes and cutting emissions while stimulating jobs and ensuring wider health and financial benefits for communities.

Around 15% of UK carbon emissions come from the housing stock, so to ensure the level of change required for homes across the UK, we must now scale up and strengthen supply chains to accelerate further decarbonisation of heating.

The Government can help to fast-track the energy efficiency industry and enable collective action by delivering two things: investment and certainty. Clear and firm targets, alongside further long-term investment from government, will be crucial to providing the certainty of demand which then allows the supply chain to invest.

There are three main areas where Government must invest to provide certainty in the energy efficiency market, which will accelerate progress towards the UK’s net zero target:

  • improving energy efficiency in existing homes
  • stimulating mass-market deployment of low carbon technologies
  • enabling the take up of 3.3 million heat pumps into new build, electrically heated and off-grid homes

It’s vital that existing housing stock is not left behind amidst the push to create green new build homes and commercial buildings. 62% of properties in England are currently rated below EPC ‘C’ standard in England, meaning that we have a long way to go to achieving a basic standard of energy efficiency across existing properties. We need all homes in the UK to achieve an EPC ‘C’ or equivalent by 2030 if we are to meet net zero targets. A stimulus measure and commitment from government of £18bn over 10 years could deliver the Clean Growth Strategy target of EPC ‘C’ five years early – while generating £60 billion of private investment and providing 150,000 new jobs.

We need sustained investment and commitment from the Government to scale up low carbon technologies for homes by 2030. The Green Homes Grant extension is a welcome step towards this, but to unlock demand and investment from householders themselves, the Government also needs to stimulate the use of low carbon ‘granular’ technologies that make small but important changes to homes. For example, smart thermostats, rooftop solar and electricity storage batteries can deliver rapid decarbonisation, more jobs and a higher return on investment with less need for public investment. A sustained programme in these markets will drive private investment, decreasing costs for the consumer and creating an affordable option for all, ensuring that no one is left behind in the transition to net zero.

A crucial step in the decarbonisation of heating will be the scale-up of the heat pump market. The commitment to installing 600,000 heat pumps per year by 2028 is certainly important – but we need the scale of ambition to reach further, to phase out conventional heating by 2035. We back the Committee on Climate Change’s target of installing 3.3 million heat pumps across the UK by 2030. There is no doubt this will be a challenge – but it’s achievable with the right backing from government and a clear plan.

While we applaud investment in new technologies such as hydrogen we can’t afford to wait for these to be shovel-ready; in contrast energy efficiency measures and low-carbon heating can start growing the economy and creating jobs immediately. Urgent action and commitment to existing technologies such as heat pumps needs to be made now if we are to provide private investors with the certainty of demand to accelerate the market and reduce costs for consumers.

The short-term cash injection into the energy efficiency market of £1 billion – outlined in the Ten Point Plan – is a good starting point. Now we need commitment from the government to a multi-year programme of action underpinned by greater investment.

Government has a dual role here, as a funder of key programmes but also as an enabler to bring forward private investment by instilling confidence and longevity to the market through a mix of public investment and a clear policy framework and consistent messaging. This will reduce the public investment required, driving private investment, and reducing costs for the consumer. The path to decarbonising our homes will be a challenging one, but the Government can play a crucial role by underpinning the market and becoming the catalyst for collaboration between the public, businesses, and policy makers.

This was first published by edie in the Energy Saving Trust blog.

Last updated: 26 January 2021