Ad hoc energy incentives are as inefficient as an old gas boiler. It's time for a long-term plan says construction sector

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5 min read05 July 2023 Partner content

This Net Zero Week, the Chartered Institute of Building sets out how Government can embrace long-term energy incentive strategies.

Back in 2021 the Chartered Institute of Building (CIOB) commented on the publication of the long-awaited Heat and Buildings Strategy (the Strategy). At the time, we welcomed the intentions of the Strategy to incentivise the installation of low-carbon heating systems. However, we also warned that elements of the Strategy, such as the Boiler Upgrade Scheme (BUS), did not go far enough to meet the UK’s legally binding carbon neutrality targets. Now over a year since the introduction of the BUS, this has proven to be the case.

Over the past few months, the BUS has been under intense scrutiny from both chambers of Parliament, with MPs and Peers questioning its validity and the impact that it has had in driving homes towards net zero carbon output.

In February 2023, the House of Lords Environment and Climate Change Committee concluded that the BUS is failing to deliver on its objectives and has suffered from the same low take-up as the now defunct Green Homes Grant (GHG). In a letter from the chair of the Committee to the Minister for Energy Efficiency and Green Finance, Lord Callanan, it was noted that “if the current take-up rate continues, only half of the allocated budget will be used to help households switch to low-carbon heating systems”.

The Committee also noted that:

Public awareness of low-carbon heating systems is limited, and the promotion of the BUS has been inadequate,
There is a serious shortage of heat-pump installers and insufficient independent advice for homeowners,
Upfront costs remain too high for many households even when the grant is taken into account,
More progress needs to be made on bringing down the overall running costs of heat-pumps to make it a realistic alternative option to traditional boilers.

It is unfortunate that, once again, the Government failed to listen to the calls of organisations like CIOB, the Federation of Master Builders and the Construction Leadership Council (CLC) who warned that this would happen. This is even more frustrating as the issues highlighted by the Committee are almost identical to the failures of the GHG which ultimately upgraded only 47,500 homes against a target of 600,000.

A quote from the Public Accounts Committee’s assessment of the GHG seems to summarise the situation well as they stated that this “continues government’s troubled record of energy efficiency initiatives and risks damaging the Department’s future efforts to harness both consumer and industry action to deliver Government’s net zero commitments”.

This is underpinned by consumer data of 2,000 UK adults gathered by CIOB in February 2023 which indicates that 53% of respondents had not heard of any of the following schemes: BUS, Home Upgrade Grant, ECO Plus/ECO+ Scheme or the Social Housing Decarbonisation Fund. Alongside this, 15% of respondents indicated they were unaware of whether their home needs energy efficiency improvements.¹ This shows that the Government is failing to promote current schemes or make homeowners aware of what can be done to improve their homes energy efficiency and reduce its carbon output.

There are many leading industry voices all calling for the same thing; a longer-term national strategy to retrofit the whole house which will go much further in promoting the carbon neutrality of the home. However, the Government has continued to opt for piecemeal short-term measures that only tinker at the edges and are not developed in consultation with industry.

On retrofitting, in 2023 alone, the Environment Audit Committee has called for at least one million new energy efficiency installations by 2025, the Greener Futures Partnership unveiled a retrofit framework worth £1.48bn, the satellite HotSat-1 was launched to map the heat signature of buildings to highlight dwellings that are wasting energy, co-directors have been appointed to lead the new National Retrofit Hub and companies such as Mace are coming forward to back the adoption of a ‘retrofit first’ principle as part of UK planning policy.

All of these examples, alongside many more, show that the construction industry and built environment at large are ready and willing to push forwards in retrofitting the UK’s existing building stock.

At this point, after so many failed initiatives, it is clear that the only reasonable step to ensure we meet our legally binding carbon neutrality targets is a commitment to a fully costed and modelled strategy such as the one proposed by the CLC. Their National Retrofit Strategy has been backed by many key bodies within the built environment and presents a twenty-year blueprint which sets out how the construction industry can work with the Government to retrofit the UK’s existing homes.

Retrofitting our outdated housing stock is and will not be an easy task. It will take significant time and funding and will have to be done in conjunction with a comprehensive strategy to bring the right skills into the sector to manage demand. Most importantly it will require political will and cross-party collaboration to ensure it is successful. The time for short-term, poorly communicated strategies that do not provide a clear financial commitment is at an end. It is time for the Government to listen to the industry and work with us to make sure this does not end up with the same fate as the doomed energy schemes of the past.

1. Survey of 2,000 UK adults in February 2023 conducted by Opinion Matters

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