Building a market for energy efficiency
Energy efficiency is an enduring solution to helping consumers reduce their energy consumption, improve the comfort of their homes, and achieving the Government’s 2030 fuel poverty and carbon reduction targets.
The energy industry has been actively supporting energy efficiency for over two decades and real progress has been achieved. Since 2013, over 2.2million measures have been installed under the Government’s current programme – the Energy Companies Obligation (ECO).
ECO is a government energy efficiency scheme that requires large energy companies in Great Britain to install energy efficiency measures in customers’ homes to help reduce carbon emissions and tackle fuel poverty.
Industry has, however, long been concerned that households and the energy efficiency sector are overly reliant on supplier obligations like ECO. A top-down approach through obligations on suppliers has, in our view, led to an expectation that energy efficiency measures should be provided free of charge, undermining the value of energy efficiency to the public.
The Government’s Clean Growth Strategy is an opportunity for positive change by refocusing on a long-term strategy around creating public demand and a competitive market for energy efficiency measures.
Energy UK believes Government could help kick-start a sustainable energy efficiency market via a combination of incentives and funding mechanisms to engage different consumer groups. These incentives should be supported appropriately by regulation to trigger demand, consumer education campaigns to promote demand and be underpinned by a robust quality and standards framework to ensure consumer confidence.
We recognise that financial support with energy efficiency measures, like that provided for via the ECO, will still be required to support those households most in need. Energy UK strongly believes that the fairest and most progressive method of funding such support is through general taxation. Supplier obligations (such as ECO) are financially regressive as the costs are distributed among energy consumers regardless of their ability to pay.
We look forward to continuing to engage with Government as it works to put in place the foundations of a sustainable market for energy efficiency.