Energy efficiency drive could boost economy ‘right away’

Many energy efficiency upgrades can already be carried out safely within Covid-19 guidelines, according to a new report from the Energy Efficiency Infrastructure Group, which says home insulation projects could create 42,500 full time jobs over the next two years.

The report was issued on the same day as the OECD warned the UK will suffer a bigger economic hit from the coronavirus pandemic than any other advanced nation. It explains how upgrading homes to make them more energy efficient could help to provide an immediate economic boost as part of a green recovery package.

The Energy Efficiency Infrastructure Group (EEIG) rejected concerns that energy efficiency work cannot be carried out within homes due to the constraints imposed by the health and safety guidelines introduced to stop the spread of the novel coronavirus.

The report says much energy efficiency upgrade work can be “readily accommodated” within these guidelines and with minimal household interaction “right away”, for example on the exteriors of buildings and in self-contained spaces.

But it cautions that, like in Denmark, the government and businesses must work with unions and employees to ensure this return to work is carried out in a safe way that also addresses “long-standing concerns” over working conditions in the sector.

It says energy efficiency can deliver an economic stimulus “quickly and reliably” because shovel-ready projects, delivery mechanisms and supply chains are already in place via existing schemes like the supplier-funded Energy Company Obligation (ECO) and those set up by social housing providers and local authorities.

The report estimates that the energy efficiency supply chain could support the creation of a total of 42,500 full time equivalent jobs over the next two years. These jobs could be supported by the investment of £2.8 billion in energy efficiency, the bulk of which has already been committed.

EEIG, which is made up of environmental and construction bodies and companies, says that more than half (£1.5 billion) of this sum could be brought forward if the government confirms “in full” its manifesto commitment of £9.2 billion for energy efficiency investment over the lifetime of this parliament. Additional incentives worth £1.2 billion, including a stamp duty rebate for energy efficient properties and cutting the rate of VAT on building energy renovation to five per cent, could leverage a further £3.2 billion of private investment.

The report also calls for the £100 million ear-marked for home Clean Heat Grants from 2022 to be brought forward while maintaining the domestic Renewable Heat Incentive scheme they are designed to replace. It says ECO should be maintained but run alongside a new system of area-based Home Upgrades Grants run by local authorities proposed by EEIG.

In the longer term, the report calculates that the investment in net zero home renovations will support more than 150,000 jobs during the next decade, helping to “level up” the performance of the UK economy. The measures could also cut energy bills to the tune of £7.5 billion per annum, providing a “persistent boost” to consumer spending.

The Local Government Association has also published new research today suggesting that the low carbon economy could create nearly 700,000 jobs over the next decade.