The Warm Homes Plan must improve rural energy efficiency
Duncan Carter, Corporate Affairs Manager
| Calor Gas
Successive governments have overlooked rural households when implementing energy efficiency schemes. Duncan Carter from Calor outlines how the Labour government can provide greater choice and better target rural communities via the Warm Homes Plan due later this year.
There remains a stark divide between the energy efficiency of our rural and urban housing stock. Older rural homes are typically three energy efficiency bands lower than modern ones, with rural owner-occupied homes being the least energy efficient across all tenures. The more rural the area, the lower proportion of properties with an energy performance rating of C and above. This trend continues to persist, meaning rural homeowners spend more on energy compared to their urban neighbours.
There are over 1.4m predominantly rural homes off the gas grid, and these include the homes Calor delivers energy to, helping to keep them safe, warm and working for the past 90 years in lieu of access to the gas grid.
We’ve developed a significant amount of expertise and knowledge on rural energy efficiency and fuel poverty issues in this time. We’ve used these insights to ask for improved rural access to government energy efficiency schemes, as many have under-served rural communities, often due to the complexity of delivering national schemes that aren’t designed for rural housing needs.
As well as improving rural energy efficiency, low carbon heating solutions are needed for those homes unsuitable for heat pumps. This includes many rural homes where it will be expensive and technically challenging to improve energy efficiency so a heat pump would run efficiently. That’s why Calor is proud to be the first supplier of BioLPG in Britain, a Renewable Liquid Gas (RLG) which we introduced in 2018. This is a ‘drop in solution’ being all home currently heated by LPG are ‘renewable ready’, and we’re working hard to bring more RLGs to market. Current government schemes don’t yet support the RLGs in the same way government supports hydrogen and sustainable aviation fuel. This must change if we are to avoid leaving some households behind in the journey to net zero.
The government has committed to £13.2bn over the course of this parliament (2024-29) to improve the nation’s energy efficiency, which is approximately one-third more than the last Conservative administration. However, this sum has been criticized as lacking the ambition to meet our carbon budgets. The government’s Warm Home Plan, which is expected in the spring and coincides with the Spending Review, must effectively target the least performing homes, many of which are in rural areas so that they are not left at the back of the queue. Previous Government energy efficiency schemes such as the Green Deal have failed to deliver. In a challenging public spending environment we can’t guarantee government will find more money, so this points towards expanding current schemes within the Warm Homes Plan rather than wholesale reform.
It will also mean the government will need to target support at those most in need, while incentivizing those with their own means to improve their home’s energy efficiency. The energy secretary, Ed Miliband, appears to favour carrot over stick, so it remains to be seen if the government will seek to regulate energy efficiency in the owner-occupier sector as Scotland has mooted.
So, how can existing government energy efficiency schemes, such as the Energy Company Obligation (ECO), Great British Insulation Scheme (GBIS), Warm Homes: Local Grant (WHLG) and the Home Upgrade Grant (HUG) be improved?
A new report from the New Economics Foundation has recommended government ends competitive funding – whereby local authorities bid for available funding – which is the case for GBIS, WHLG and HUG.
HUG, for example, is targeted at low-income homes and those off the gas grid with EPC ratings between D and G. Local authorities had to bid for the first and second phase, which are now closed to further applications. Under HUG Phase 1, 4000 homes were upgraded using 6,400 measures. This has increased under HUG 2 where a further 4500 homes have been helped. The Warm Homes: Local Grant works in the same way. An expansion of area-based schemes to all local authorities would help more rural homes most in need.
The government should also reverse some unfair changes made to the latest ECO scheme (ECO 4), which saw obligated energy suppliers prevented from replacing or repairing old LPG or oil boilers in off-gas grid homes. This is unfair as the scheme still allows replacement boilers in homes connected to natural gas so does a disservice to people with homes less suited to heat pumps. For many homes off the gas grid, replacing existing boilers is often the most cost effective way to both lower bills and emissions. This isn’t contrary to net zero as every LPG boiler is ‘renewable ready’ and can use RLGs as supply increases.
Lastly, it has been suggested owner-occupiers or the ‘able-to pay’ market will be offered loans to improve the energy efficiency of their property and install clean heat systems. It’s important that the government takes learnings from previous schemes such as the Green Deal to overcome barriers associated with previous loan models. Any scheme will need adequate consumer protections in place and provide incentives such as low or zero percent interest loans to be attractive to cash-poor households still struggling due to cost-of-living pressures.
It will also be important to give owner-occupiers a wide choice of solutions to improve the energy efficiency and decarbonise the heating of their properties. Heat pumps, batteries and solar have been mooted as the technologies of choice, but these might not be suitable for many rural properties that require deep-retrofit. Other technologies, such as hybrid heat pumps should be included and can be net zero compatible if they work alongside a boiler running on RLGs.
We urge the government to consider rural energy needs as it prepares its Warm Home Plan – a one size fits all approach hasn’t worked to date and rural solutions are there to prevent rural homes being left behind if it cares to look.
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