The government has been urged to establish a new framework to support the financing of energy efficiency upgrades for homeowners.
An open letter has been signed by 29 signatories, including 20 members of the Association for Decentralised Energy (ADE), ahead of a record increase to the price cap which comes into effect tomorrow (1 April).
The ADE is calling on ministers to rapidly accelerate progress on rolling out green measures such as insulation across owner-occupied homes to protect the public from future price rises, support national energy resilience and make meaningful progress towards net zero.
The ADE said this framework should include “pull” factors, using mechanisms such as tax changes, to directly incentivise consumer upgrades with private finance.
Consumers must be also be incentivised to make the switch to more efficient options with “push” factors, such as requiring homes to meet minimum energy efficiency standards at point of sale.
Elsewhere supply chains will also require greater financial incentives and stability to scale-up to required demand. The ADE said this would greatly reduce the public cost of delivering net zero, as it could remove the direct need for a Treasury-funded scheme for owner-occupied homes.
“All these elements should be combined in one package of reforms, which would allow private finance an easier pathway to funding owner occupier retrofit,” it added.
ADE said the money unlocked would “go a long way” as 63% of homes require less than £1,000 per home to upgrade to EPC Band C.
The trade association also said bills would be cut through reduced energy costs, and UK energy security would be boosted as gas demand will be reduced and reliance on imported supplies limited.
ADE policy manager, Chris Friedler, said: “One year on from the closure of the Green Homes Grant and almost six months from the publication of the Heat and Building Strategy, there is still no overarching policy to keep leaky homes warm for homeowners.
“With the twin crises of climate change and skyrocketing gas prices, the government should commit to a framework for new financial innovations coupled with new policy incentives and investment in the retrofit supply chain to get the UK’s transition to warmer, cheaper and more environmentally sustainable homes moving.”
In response to the letter a government spokesperson cited the Heat and Buildings Strategy and pointed to a £6.6 billion investment to decarbonise homes and buildings, as well as requirements for higher minimum performance standards.
They added: “Just last week we announced plans to reform the VAT reliefs available for families looking to install energy saving materials. Consumers will pay a 0% rate on materials such as solar panels, heat pumps and insulation, and the scope of who can access the reliefs has been expanded.”
NEA
Elsewhere in the sector fuel poverty charity National Energy Action (NEA) has unveiled a public petition for the government to take action ahead of the increase to the cap.
At the time of writing the petition has garnered more than 1,200 signatures, 50% of its target of 2,500.
Adam Scorer, chief executive of NEA, described the price increase as the “biggest energy price shock in living memory”.
He continued: “Millions of people will be priced out of adequate levels of heating and power. For all the anticipation of these price rises, many people on the lowest incomes will be crushed by the reality.
“Quality of life for millions of people will plummet. Warm homes, cooked food, hot water, clean clothes – all cut back or cut out. Debt will spiral. Physical and mental health will suffer. This energy crisis is about to bite down hard on those least able to cope. Charities like NEA will try to pick up the pieces for those in greatest need. It will be a near impossible task.
“Last week, the UK government chose not to prioritise support for those on the lowest incomes. It has crossed its fingers that the market will right itself. This ‘wait and see’ policy could cost lives next winter.”
NEA said soaring energy prices will rise by approximately £14.40 per week.
The petition calls on the government to:
- Exempt vulnerable households, in particular prepayment energy users, from paying the £40/year levy that will follow the £200 energy bill rebate
- Provide additional support for low income households ahead of next winter, for example through a bigger Warm Home Discount that reaches more people, or by expanding the Winter Fuel Payment beyond pensioners
- Develop a social tariff that is additional to current energy market protections, providing a below cost energy price to low-income households
- Help to clear utility debts through starting a payment matching scheme, matching every pound that a household makes towards their utility debt repayments
Scorer added: “More urgent support is needed from the UK government. But also, over the coming months, there must be a coherent plan from government, energy sector, health bodies, local authorities and charities to support those at greatest risk next winter.
“Morally or financially, this is too costly for the UK government to ignore. Public health experts have warned there is a damaging overlap between the health impacts of living in a cold home and Covid-19.”