The cancellation of the Zero Carbon Homes standard has so far raised energy bills by at least £120 million, according to a new report from the Energy and Climate Intelligence Unit (ECIU).

In 2015, the government scrapped plans to introduce a new requirement the following year for all new build homes to create net zero carbon emissions in their day-to-day running through a combination of onsite generation and energy efficiency.

The ECIU has calculated that if the policy had not been cancelled, the occupants of new homes built since January 2016 would now be paying between £208 and £233 less on their annual energy bill. This is around triple the average intended £76 saving from the government’s recently introduced price cap, the study says.

The total extra energy costs paid by these homeowners until June last year adds up to between £122 million and £137 million. And this figure will rise to more than £2 billion by the end of 2020 when more than 700,000 new homes are expected to have been occupied that would have subject to the requirement.

The lower standards have also resulted in 20TWh of natural gas being wasted over the same period.

The additional costs of building a home to meet the standard would, the report estimates, increase the purchase price by one to two per cent – money which could be recouped through lower energy bills.

“The consensus among academics and policy makers is that reducing demand through energy efficiency is the first action that should be taken in the quest to decarbonise heating supply in the UK,” it adds.

“This task will be made increasingly difficult with the construction of each new home that consumes more energy than it needs to.”

ECIU head of analysis Jonathan Marshall, said: “Successive governments have struggled to devise effective domestic energy efficiency policies, meaning carbon emissions from homes are rising, but Zero Carbon Homes could have made a real difference.

“As well as future-proofing new homes, the policy would have saved families money, reduced Britain’s vulnerability to energy supply shocks, and cut carbon emissions.

“Tackling new build homes is one of the easiest ways of improving the UK’s leaky housing stock and reintroducing this policy could also deliver a boost to firms involved in insulation and low-carbon heating.”

Energy UK chief executive Lawrence Slade commented: “The contribution energy efficiency measures make to both reducing bills for customers and cutting emissions becomes clearer and more compelling all the time.

“It therefore makes no sense to be building homes today that which will require retrofitting in the future to meet the government’s own carbon targets – especially when the need to tackle emissions produced from heating our homes already presents such a major challenge.

“The government should ensure that new-builds are constructed to high energy efficiency standards and actually achieve their stated energy performance rating, with zero carbon homes being the ambition.”

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