Bring forward long-term energy-efficient homes plan, British businesses urge Ministers

In a new report on ‘Warming Britain Affordably’, published today (10 January), the Aldersgate Group welcomes the fact that the Autumn Statement includes a new ambition for the UK’s buildings and industry to reduce energy consumption by 15% by 2035.

But it warns that this needs to be built upon with a more robust long-term plan to improve the energy efficiency of all homes – homes being the focus given the impact of the energy price crisis on households and the Government’s ambition for all homes to meet EPC ‘C’ standards or higher by 2035. Delivery on this ambition is not running on track, the UK’s climate advisors confirmed last summer.

The Aldersgate Group is emphasising that a robust home energy efficiency approach would bring economic benefits as well as environmental benefits, creating a “thriving market” for insulation and double glazing while also generating significant savings on home energy bills.

In order to ensure that the UK seizes these benefits, the report argues, the Government should make a string of interventions to create demand for energy efficiency retrofits, make retrofitting affordable to the general public, ensure there are enough trained workers to deliver and improve consumer protections and trust.

Organisations participating in the Aldersgate Group include CBRE, Interface, Ikea, John Lewis Partnership and Wilmott Dixon. The report states that the private sector is “ready to play its role in delivering a low-carbon and energy-efficient built environment”. It continues: “It is now time for the Government to urgently plug the regulatory and policy incentive gaps that still exist to unlock this opportunity.”

On demand creation, the report notes how many homeowners are not in a position to invest in retrofitting services and products without an incentive. The Aldersgate Group wants to see all energy efficiency products benefitting from a zero rate of VAT – not just products installed by tradespeople. It also recommends changes to Stamp Duty to incentivise people to improve their home energy efficiency when moving property.

The UK Government’s last two national energy efficiency incentive schemes for homes, the Green Deal and the Green Homes Grant, are broadly regarded as failures in their early closures and lack of clarity provided. The Aldersgate Group is, therefore, seeking assurances that other publicly funded schemes will be protected from cuts and will be extended and expanded in the future. Its report names the Boiler Upgrade Scheme, which provides grants to homes replacing boilers, and the next phase of the Energy Company Obligation (ECO) scheme, which obliges energy suppliers to fund efficiency improvements in the homes of vulnerable customers.

Unlocking private-sector funding is also regarded as important. The report floats the idea of the Government, through the UK Infrastructure Bank, working with bands to develop and launch products supporting homeowners looking to make their homes more energy efficient. Also floated is the idea of a ‘Green’ offshoot of the Bank of England’s Term Funding Scheme for homeowners.

Skills and support

Of course, creating demand for retrofit is no good if there are not enough skilled tradespeople to carry out installations. A lack of professionals qualified to deliver the services covered by the Green Homes Grant was cited by the Government as a key reason for the failure of the scheme; it was developed and launched rapidly, leaving little time for industry consultation.

The Aldersgate Group’s report “urgently” calls for an energy efficiency installation strategy – a plan for upskilling the necessary tradespeople. This could be produced using the expertise of the Green Jos Taskforce, its report notes. The Taskforce was convened in late 2020 and produced its first report to Ministers in the summer of 2021. It comprises representatives from businesses in the energy and construction sector, National Grid, academia, business groups and environmental NGOs, tasked with producing advice on delivering the UK’s ambition to host two million green jobs by 2030.

Another topic covered in the report is the need to improve customer trust in the retrofit sector by making advice easily accessible and implementing new consumer protections. The Energy Saving Trust, a member of the Aldersgate Group, has called this “crucial”.

One intervention that the report recommends is the launch of an Energy Advice Service – a body that would provide free and bespoke advice for each member of the general public, based on the unique specifics relating to their home. New quality marks could also be instated to prove that homes have undergone credible upgrades.

“We know that giving households access to comprehensive, independent and tailored advice offers them clear direction and support to insulate their homes, in turn reducing energy use and bills,” said the Energy Saving Trust’s head of policy Stew Horne.