Cutting energy bills is within reach - let's make it happen
The Prime Minister started his term with bold commitments on tackling the current state of the economy and cost of living crisis and his Chancellor’s Autumn Statement, offers real potential.
We know that millions across the UK are asking themselves how they will afford their energy bills next Spring, and we know that this country has some of the leakiest housing stock in Europe – meaning households are paying over the odds for heating. This is why home energy retrofitting needed to be a priority for this Government and, thankfully, it appears that is the case.
Hunt and Sunak have announced a new long-term commitment to drive energy efficiency improvements to bring down bills for households, businesses and the public sector. The overarching ambition is to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030 against 2021 levels.
With an existing packet of £6.6bn dedicated to energy retrofitting, the Government has bolstered its efforts and added an additional £6bn of funding, which will be made available from 2025 to 2028. And a new Energy Efficiency Task Force will be established to deliver the change.
This is all very welcome news which will make a huge difference across the country. But, as a nation, we need to open our minds to energy retrofit, and there are some immediate actions which will boost demand. Firstly, the Construction Leadership Council (CLC) had been urging the Government to consider an information campaign aimed at householders, encouraging them to improve energy efficiency of their home. The PM has now authorised an £18m information campaign called 'Help for Households’ to offer technical tips and advice to cut energy use without jeopardising warmth. And, secondly, there needs to be a capacity building programme to remedy challenges in work supply.
If the pandemic taught us anything it’s that we need to build resilience. External factors like energy security, cost of energy bills and growing public awareness of the benefits of energy retrofitting mean this is a swiftly moving arena – but there is an urgency on tackling the nation’s energy challenge. The situation has become urgent. Insulated homes are no longer a nice to have but a national imperative.
That is why we need a dedicated drive to deliver green renovations across the nation.
The demand to retrofit is one of the most complex challenges from a policy and regulatory perspective. While it is clear there are positives to retrofit – such as saving money, and healthier, more easily mortgageable homes – there remains barriers in both supply and in demand.
The Government has rightly started with social housing through its Social Housing Decarbonisation Fund and other similar schemes, benefitting those who are most at risk of fuel poverty. But how to increase the appetite of retrofit in other parts of the housing market is less clear.
The existing shortage of private rented housing reduces the appeal to increase regulation for rented homes, as it could compound the lack of available residential lettings. Meanwhile, those who own and occupy are seemingly unconvinced on the benefits with anecdotal evidence from energy companies offering free insulation finding it difficult to secure willing participants. It is no understatement that an English man (or woman)’s home is their castle. It’s probably the single biggest asset most of us will ever invest in and as such the barriers to stoking demand are high.
To help kickstart the Landlord and owner-occupied retrofit market, the Government can, and should, work with industry on a medium-term plan for funding and financial incentives building on the £6bn announced in the Autumn Statement.
The construction industry stands ready to tackle this issue head on, and we’ve set out a blueprint of how to do this in the CLC’s National Retrofit Strategy. In this strategy we show how our industry can work with the Government to undertake the momentous task of retrofitting millions of homes across the country overseen by a National Retrofit Hub. It shows retrofit is the clear solution to how net-zero ambition can lead to economic growth. Along with the obvious benefits to living in warmer homes, investing in retrofit will also provide a significant economic boost to the construction sector and the wider UK economy, providing hundreds of thousands of skilled green jobs.
While the construction sector is primed to retrofit, a nationwide drive would require an extra boost of capacity in the market. The Government should uphold commitments to current minimum energy efficiency standard targets and dates, both for social housing and private rented sectors, as set out in the Net Zero & Heat and Buildings Strategies. And, accreditation for retrofit installers needs to be recognised in policy and regulatory decisions.
The challenges facing everyone as they look to heat homes is something the construction sector can help to solve, whilst boosting economic growth at the same time, and we’ve got the blueprint.
The Government has committed the investment – now we need sector wide coordination.