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Blog Post 23 March 2017 Updated 9 November 2020

Time to test Government’s energy efficiency commitment

by Philip Sellwood, CEO, Energy Saving Trust

The Government is due to publish its Emissions Reduction Plan in the next few months. It aims to set the framework for emissions targets and our carbon budgets, while stimulating low-carbon growth. The background to the plan is that the Government recognises that – without additional policy measures – we will soon be very off-track in progress towards our national 2050 climate change target of an 80% reduction in carbon emissions.

The publication of the Emissions Reduction Plan is a pivotal moment for home energy efficiency in the UK. Energy use in buildings (mostly homes) accounts for 18% of the UK’s carbon emissions and insulating and installing renewable energy in homes is one of the most cost-effective actions the government can take to save carbon.

But even though home energy represents a great way to keep on track with our carbon target, the Energy Saving Trust are concerned that the government may not grasp the opportunity. The failure of the Green Deal programme under David Cameron’s first administration – for a whole host of reasons – has made politicians nervous of an ambitious home energy saving policy programme.

It’s time we put that failure behind us. We want to see a pragmatic effective strategy from government that will help citizens across the UK save energy in heating and electricity use, and generate free, clean energy at home. A strategy that will keep us on track with national carbon reduction targets and have the added benefit of helping tackle fuel poverty and lowering householders’ bills.

So, what are the key elements to look out for when the Emissions Reduction Plan is announced? Well, for me, there are three simple tests that should tell us whether home energy is rightly at the centre of the government’s plans for long-term carbon reduction.

Assisting home improvement

First up; are there any incentives planned to encourage so-called “able-to-pay” householders – typical working home owners – to refurbish their home with energy efficiency upgrades? The only current incentive programme is the Energy Company Obligation but the government has made clear that this funding programme will be targeted only at households at risk of fuel poverty after 2018.

There’s no shortage of ideas about new effective incentive programmes for mainstream householders that could be introduced – ideas that could be delivered at low or no cost to the taxpayer. Council tax and stamp duty incentives would deliver a tax saving for lower energy homes, or homes which have been refurbished.

A well-structured government incentive could unlock funding from the private sector – for example allowing householders planning energy efficiency refurbishments to borrow at a cheap rate on their mortgage. That’s an idea the Energy Saving Trust and other organisations have been developing through the recent, high profile LENDERS project.

A new incentive also provides a rallying point for companies making and selling energy-saving products – making it easier to promote their products and to invest with confidence in taking on staff and developing capacity.

The important thing is to offer at least some ‘carrots’ for householders to invest in upgrading their homes.

Tackling fuel poverty

Focusing investment in home energy improvements on fuel poor homes is a way of hitting two national priorities: reducing carbon emissions and protecting householders from high bills and cold homes. A fuel poor household is defined as a family with an income below the poverty line, living in a home where energy bills are higher than average.

In 2015, the Government offered a sensible plan to tackle fuel poverty with a target that, by 2030, all households in fuel poverty should be living in homes with an energy performance rating of “C”. It’s a strategy and a target that Theresa May’s government continues to refer to and endorse.

Unfortunately, even with – as is planned – all of Energy Company Obligation (ECO) funding directed to the fuel poor after 2018, we’re not going to be on track to meet that 2030 target. The Committee on Climate Change (CCC) says that we need to spend about twice as much per year as is planned through ECO to meet the fuel poverty target.

This is an area where taxpayer funding is both appropriate and needed. Spending on cold homes now will deliver major public sector savings in the medium term: most notably savings for the NHS. And what is more palatable at Westminster than savings for the NHS?

Such investment shouldn’t be seen as a political hot potato – but again, it remains to be seen whether it comes to pass.

Zero carbon newbuild homes

The third and final test offering a clue to our energy efficiency future will be around building new homes with minimal energy use.

In 2015, the government scrapped a long term commitment to introducing zero carbon homes from 2016. That was a mistake, but it’s one the Government can undo with a clear commitment to revising building regulations in the next few years.

As it stands we can be building new homes now that are so energy inefficient they will require new energy efficiency and renewable energy upgrades fitted in the 2030s and 2040s. It’s ridiculous that around 20% of new build homes still have an energy performance rating of C or below.

There is clearly a great demand for new homes, and silence on the subject of future-proofing these properties would not be a good sign.

Applying the three tests

So there you have it; three simple tests. An able-to-pay incentive, a commitment to the fuel poverty targets, and a return to nearly zero energy new-build.

A new Prime Minister and new Government offers a chance to look at home energy efficiency afresh. But when considering the Emissions Reduction Plan and the announcements over the next weeks and months, consider whether they meet the three tests I have set out.

Last updated: 9 November 2020