Net zero ‘at risk’ unless grants cover whole cost of home upgrades

The UK’s net zero ambitions are at risk of being missed if the government does not cover the whole cost of home upgrades in grants to poor households, a report by two charities has warned.

National Energy Action (NEA) and Energy Action Scotland’s 2021 Fuel Poverty Monitor suggested more funding needs to be made available to vulnerable households, including for ancillary services such as rewiring.

It makes a number of recommendations aimed at removing the barriers and “maximise the opportunities” for fuel poor households in the move decarbonise domestic heating.

These include calls on UK regional governments to increase levels of funding, and calling for a ban on household contributions within the Energy Company Obligation (ECO) and any other decarbonisation scheme that is aimed at fuel poor households.

Speaking to Utility Week Matt Copeland, NEA’s head of policy and public affairs, used heat pumps as an example of an area where vulnerable households could benefit from more funding in addition to the £5,000 grants promised by the recently announced Boiler Upgrade Scheme.

He said: “We need to understand that if we are to reach net zero, then those costs will need to be covered for those technologies to work.

“For a heat pump to work often homes that are of a certain age need rewiring. If the grant that a low-income household is receiving doesn’t cover the cost of that rewiring, that heat pump might not be installed because they can’t cover that cost.”

Copeland added that the most reasonable place for those costs to be covered is within the Boiler Upgrade Scheme grants. He explained that costs for ancillary services such as rewiring were on a “sliding scale”, from hundreds to thousands of pounds which low-income households are unlikely to be able to afford.

Asked about who would qualify for this additional funding, he said: “In terms of the ECO qualification criteria, they use means tested benefits principally as the proxy for having a low income. I think that’s a pretty good proxy, but you can also take your pick of any income band as well for less automatic income levels.”

Elsewhere the report reiterates the charity’s calls for the prohibition of household contributions within ECO.

Copeland added: “The ECO scheme doesn’t necessarily cover the whole cost of the measure itself, you might qualify through ECO for some insulation or a heat pump but you can be asked for a contribution from the installer towards that and if you don’t give a contribution you might not get the measure.

“That is a bigger problem at the moment and that is something we see consistently happening, because those client contributions aren’t banned.”

Among the report’s other recommendations include for the government to commit to keep a “long-term price protection mechanism” in place to ensure policy costs on bills continue to be passed through in a “transparent and fair manner”.

Additionally there are calls for Ofgem to create a “reliable and consistent mechanism” to allow low-income households to uprate their connection to the electricity network when they install low carbon heating, at no upfront cost within the ED-2 price control.

Furthermore, the regulator should establish a working group of suppliers, energy networks and consumer groups to develop a good practice guide on how gas connections can be capped if a household is no longer using gas for heating or cooking.

Frazer Scott, director of Energy Action Scotland and co-author of the report, said: “In Scotland fuel poverty affects more than 1 in 4 households and is rising. Eliminating fuel poverty must be the priority.

“By doing this we save lives, reduce costs to our national health service and when done well, reduce our carbon emissions. Zero emissions first programmes have the potential to increase inequalities and we must ensure that this cannot happen.”