Energy efficiency improvements are key to reduce the financial burden on households
4 min read
High energy prices have become a sad fact of life for households across the country.
Although recent months have brought some welcome news that falling wholesale energy prices will begin to feed through to household bills, energy bills are sadly nowhere near returning to pre-2022 levels. It is therefore likely that families will continue to seek debt advice and short-term relief to help with the increased financial burden.
The experience of the past year has thrown into sharp relief the urgent need to implement measures to permanently reduce this burden on households and businesses. One such solution is to introduce comprehensive policies to upgrade the energy efficiency of the United Kingdom’s housing stock.
We should not wait for another winter before setting about improving our energy efficiency schemes
The government’s Energy Company Obligation (ECO) was designed to do just that, and since its inception in 2013 it has saved low-income customers £17.5bn in lifetime energy bills. Sadly, the fourth and most recent iteration of the scheme has been delivering at a far slower pace than its predecessors. Between April last year and March 2023, only 10 per cent of the 450,000 households the scheme is meant to support over its four-year lifetime have received support. At a time of heightened energy costs, it is a source of deep concern that the rate of progress on this vital programme has been so sluggish.
In May, analysis by the Local Government Association (LGA) detailed that the energy efficiency scheme supported just 60,000 homes in 2022, down from almost half a million homes in 2013. In addition, the program has been plagued by issues related to slow rollout, cost inflation, demanding minimum requirements, and a shortage of installers.
Fuel poverty is particularly acute in Wales, where we have some of the oldest and most inefficient housing stock in Western Europe. Data by the Department of Levelling Up, Housing and Communities shows that five out of the 15 local authorities with the lowest percentage of dwellings rated at EPC C or above are in Wales, with Gwynedd third from bottom at 23 per cent – and my own constituency of Ceredigion only slightly better at 25 per cent.
We should not wait for another winter before setting about improving our energy efficiency schemes. To assist with the rollout of the ECO scheme, ministers must look again at the cost assumptions and bring them in line with inflation. Increased costs are quoted by too many installers as the reason for the slow rollout of the scheme to date, and worryingly a factor driving many to leave the supply chain altogether.
The government would therefore do well to look at ways of boosting the supply chain. Uplifting the cost assumptions for various measures will be important, as will widening the scheme’s eligibility to allow more households to participate in the scheme. One way of doing so would be to introduce greater flexibility to the scheme’s minimum improvement thresholds, another would be to extend it further to the private and social rented sectors. Such changes are of course not possible without proper funding, which is why the UK government should bring forward the allocation of the £6bn committed to energy efficiency in the Autumn Statement.
Adjustments to, and greater funding for, the ECO schemes could realise significant benefits across a range of policy areas. A more efficient housing stock would not only bring about a marked fall in lifetime energy bills, it would also see improvements to health outcomes, new jobs in the decarbonization sector, and help meet important climate targets.
Without much-needed adjustments to the government’s energy efficiency schemes I fear we will not achieve these important goals. Research for the Warm This Winter campaign showed that 18 per cent of the population were living in cold and damp homes last December – and a quarter of those with disabilities live in such conditions. It has often been remarked that the truest measure of a society’s humanity can be found in the way that it treats its most vulnerable members. I firmly believe that by delivering these improvements to the ECO schemes, we can make a lasting contribution in the struggle against fuel poverty.
Ben Lake, Plaid Cymru MP for Ceredigion and chair of the Fuel Poverty and Energy Efficiency APPG
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