Maintaining a consistent and forward-thinking UK Energy Efficiency Policy is key to the UK’s future decarbonisation plans, but what are the challenges, and where is there the most room for improvement?
Improving the energy efficiency of UK households can significantly contribute to lowering carbon emissions. This is not the only benefit, with reduced bills, improved occupant health, and much more being delivered. The problem is that the UK’s energy efficiency policies must be entirely fit for purpose
Let’s take stock of the current challenges the policies impose and explore what can be done to address them.
Challenges in UK Energy Efficiency Policy
In the UK home energy efficiency policy landscape, there are two distinct streams: the funded market and the paid-for market. These strands both operate under a unique set of regulations. However, what they both share is misguiding and confusing regulations.
Within the funded market, stringent regulations have created unforeseen challenges for companies responsible for implementing home efficiency measures. The industry has been flooded with new rules in recent years, which have only added to hindering its potential growth.
While some policies are under review, serious groundwork is needed to align policies effectively. One example of this not happening is the recent implementation of conflicting guidance that came our way from a regulator, contradicting PAS 2035 – an energy efficiency retrofit standard which is accredited to SCIS.
Regarding the market of people who can afford to pay, a major problem is understanding and following Section 75 of the Consumer Credit Act. While it was created with good intentions to safeguard consumers, it has made it harder for them to obtain loans for energy efficiency upgrades.
The consequences of this have been a decline in funding, causing the industry to shrink significantly. This decline has been clear for all, with more businesses exiting the ECO market than ever.
The industry is 18% of its size just five years ago.
Lagging behind global initiatives to enhance household energy efficiency
This lack of urgency is even more obvious when you look at the progress made by other countries across the globe. For example, France installs hundreds of thousands of heat pumps annually, while Germany is effectively phasing out fossil fuel heating. China is also well ahead in its solar initiatives in comparison. This needs to be a wake-up call for the UK to make a push to make its energy efficiency strategies more effective, and policy adjustments will provide the momentum it needs.
What can be done? Four key considerations for change
So, what could a new, effective approach to policy look like?
Success will depend on the combination of learning from the past mistakes made in the implementation of regulations and being able to seize the opportunities in the industry.
- Firstly, green mortgages offer a significant opportunity for consumers to access energy-efficient upgrades affordably. With zero per cent interest options, homeowners can make upgrades without taking a hit in their monthly mortgage costs. The benefits can also include raising property value, reinforcing the case for green mortgages as high-return investments.
- Secondly, there must be a data-driven approach to guide performance effectively. If this is done correctly, it can accelerate energy efficiency efforts, with quantitative data playing a pivotal role in shaping informed policy decisions and encouraging consumer adoption. Specifically, advocating for smart meter data to be publicly available is essential. With 20 million potential smart meters in the UK, the data can be leveraged to help the energy efficiency industry target properties that most need support.
- Thirdly, fostering cross-industry cooperation can act as a vital catalyst. The alignment of assessors, brokers/lenders, installers, and consumers throughout the retrofitting and energy efficiency installation process is important in effectively driving transformative change. Establishing clear and inclusive policies, informed by insights from those actively addressing practical challenges on the front lines, is essential. It is an urgent call for all stakeholders within the industry to advocate for their involvement in shaping policies that reflect pragmatism and align with shared objectives aimed at creating feasible and energy-efficient residences.
- Lastly, instead of gradually introducing stricter PAS standards, which could significantly impact the well-being of homeowners and occupants, we should instead implement measures that remove obstacles to the widespread and affordable adoption of energy-efficient upgrades.
Here’s one bold idea: the government provides £67 per kilowatt of energy generated to renewable energy producers like solar farms. These incentives add up substantially. Surely, energy efficiency upgrades, which save kilowatts of electricity, should also receive compensation in the form of incentives for consumers. This could be crucial in allowing homeowners to invest in energy-efficient measures.
A final word on the UK Energy Efficiency Policy and its variations
History has demonstrated that conflicting energy efficiency policies and regulatory uncertainties can impede progress and hinder growth. However, there is an opportunity to rescue this situation.
By implementing accessible policies and initiatives, fostering cross-industry collaboration, and establishing fair compensation schemes that work seamlessly, we can kickstart progress in energy efficiency. It’s time we take pragmatic actions that benefit both consumers and the environment, and we all have a role to play in this effort.
This piece was written and provided by Nicolas Gillanders, CEO, South Coast Insulation Services (SCIS).
