Rebound effect: Gas savings from insulation quickly disappear

The drop in gas consumption initially seen after insulation is retrofitted in existing homes quickly vanishes as the savings from improved energy efficiency are cancelled out by increased underlying energy usage, a new study from the University of Cambridge has suggested.

Researchers said it is extremely difficult to identify the specific causes of this “rebound effect” but they may include changes in behaviour such as turning up heating and opening windows in stuffy rooms or the construction of building extensions.

The study, published in the journal Energy Economics, analysed the gas consumption patterns of more than 55,000 homes in England and Wales for at least five years both before and after the insulation of loft and cavity wall insulation between 2005 and 2017.

Although households retrofitting cavity wall insulation saw an average drop in gas consumption of 6.9% in the year of the installation, this reduction shrank to 2.7% in the first subsequent year. The savings over the following years were negligible, with consumption eventually rising slightly above pre-retrofit levels in the fifth year following installation.

For loft insulation, average gas consumption was 4% lower in the year of installation and 1.8% lower in the following year. The savings were also minor in subsequent years, with consumption narrowly exceeding pre-retrofit levels from the fourth year following installation.

The figures account for variables such as the age and size of buildings, the weather and gas prices. The researchers behind the study noted that energy use was influenced by gas prices and so there may currently be greater savings from insulation due to the ongoing energy price crisis.

They said retrofitting insulation is vital but must be combined with the installation of low-carbon heating systems to have a significant impact on emissions.

“The recent spotlight on increasing the energy efficiency in UK buildings is both welcome and long overdue, and there are very real benefits to households from good insulation, not least in terms of health and comfort,” said study co-author professor Laura Diaz Anadon, director of the Cambridge Centre for Environment, Energy and Natural Resource Governance.

“However, home insulation alone is not a magic bullet. High gas prices will reduce the rebound effect in the short term, as homeowners have the need to keep costs down at the front of their minds. In the long term, simply funding more of the same insulation roll-out to meet the UK’s carbon reduction and energy security targets may not move the dial as much as is hoped.”

Her co-author, Dr Cristina Penasco, from Cambridge’s Department of Politics and International Studies, said the failure to combine insulation retrofitting with the replacement of fossil fuel heating would represent a missed opportunity: “When trying to get middle income households to conduct energy renovations, as the government are currently doing, it makes sense to further encourage heat pump installation at the same time.

“This could be through incentives such as more generous and focused grant schemes, as well as obligations for boiler manufacturers and additional investments in skills for installers.”

Another finding from the study was that reductions in gas consumption following the retrofitting of insulation were lower for poorer households, with those in the bottom 20% by income actually increasing their consumption.

“Households in more deprived areas often have to limit energy use, so any savings created by home insulation can quickly get redirected into keeping a house warmer for longer,” said Penasco

“This is a good outcome if policies are aimed at reducing fuel poverty in low-income households, but will not help with the UK’s emissions reductions targets or reliance on gas.”

“People do not deliberately squander energy savings,” she concluded. “There is a need for education to lessen the rebound effect we have documented. Media appearances by ministers to discuss flow temperatures of boilers are positive signs that parts of the government are starting to think about this.”