Energy efficiency – overcoming government apathy

The heat sector is in virtually universal agreement that energy efficiency is an essential first step in decarbonising heating in UK homes. Despite this broad consensus, the government appears to remain apathetic towards energy efficiency.

It was the glaring omission from the recent Energy Security Strategy – a document that focused squarely on securing sources of generation into the future rather on the third of all homes that are still without cavity wall insulation and the remaining half of homes without adequate loft insulation.

Against the backdrop of the gas crisis brought about by the ongoing war in Ukraine which is seeing household bills increase to unaffordable levels, members of Utility Week’s Heat Council convened at Utility Week Live to consider the options for how to overcome government apathy and stimulate progress on energy efficiency.

They put forward a range of ideas and measures that could be implemented in the short-term, potentially even in time to help households this winter.

Retain and expand Eco with Eco+

All attendees agreed that as the only measure that has consistently delivered, the Energy Company Obligation (Eco) should be a key delivery mechanism for energy efficiency measures and welcomed the increase in funding for Eco4.

However, of critical importance is the need to stimulate the ‘able to pay’ market, which could be done through the creation of an Eco+ scheme which would see householders make a contribution to measures.

Such a scheme could be created through or alongside the regulations that are still to be laid out for Eco4 and could be scaled up in time for this winter.

It would need to last until 2030 or beyond to avoid the boom-and bust-effect that has been seen with other scemes, and there could be a role for the UK Infrastructure Bank.

Bring EPCs up to date

While an enhanced funding scheme would act as the ‘carrot’, stimulating the market will also require an element of ‘stick’, which could come in the form of minimum Energy Performance Certificates (EPCs).

Around 40% of households do not have up to date EPCs, but a way to rectify this while also engaging customers would be for government and the industry to run a national home census.

However, attendees also recognised that the methodology behind EPCs is fundamentally flawed and urgently needs updating.

Allow energy suppliers to market energy efficiency measures

Trust was highlighted as one of the major barriers to stimulating the energy efficiency market, but also one of the most difficult elements to overcome.

While local tradespeople were considered among the most trusted parties in the market, smaller companies do not currently benefit from the funding schemes as the burden to join is high, so are unlikely to impart advice.

Fundamentally attendees believe that market reform is necessary to allow energy suppliers to offer bundles of products and services to lower customers’ energy bills. An obligation on suppliers to reduce customer demand year-on-year would also be helpful.

In the meantime a temporary suspension of the rules preventing marketing of energy efficiency products when energy suppliers install smart meters could be worthwhile.

Changing the emphasis from installing as many smart meters as possible in a timespan to ensuring time for tailored advice was also considered a good idea.

Energy suppliers could also provide more tailored energy efficiency advice to those in fuel poverty, but this would require funding from government.

Other sources of information could come from the Energy Savings Trust if its role was expanded in England to match what it already does in Scotland, with there also being a role for both councils and local action groups to share advice and best practice.

Ahead of this winter, a national campaign for energy efficiency fronted by a high-profile figure such Martin Lewis could also be run.

Engaging with householders will require all these approaches as customers trust and seek advice from different players in the market.

Other ideas put forward by the council include:

• Ensure any energy efficiency schemes cover a wide range of technology types, including double glazing and thermal storage.
• Speed up the smart meter roll-out as the first step to helping people understand their energy consumption.
• Work with landlords to ensure tenants do not miss out on improvements to their building’s energy efficiency.
• A Green Stamp Duty would incentivize people to improve energy efficiency, with lower stamp duty paid in response to energy efficiency improvements.
• In designing further interventions on heating and energy efficiency, learn the lessons from the smart meter roll-out.
• Local authorities should set minimum standards for housebuilders to ensure installations such as microbore piping are not barriers to heat pumps in the future.

A focus on energy efficiency is one of the key recommendations from Utility Week’s Energy Reset campaign. To read more and to see the full report, download it for free here.