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Publications / Blogs

Energy efficiency: a long-term solution to the rising cost-of-living

Energy UK is one of many organisations calling for more support for energy efficiency measures in response to the rising cost-of-living, the urgent need to reduce gas demand, and achieve Net Zero carbon emissions.

Energy efficiency is a complex market, with lots of moving parts

Helping households to improve the efficiency of their homes has always been a tricky policy area for Government. This is due to a range of factors, not limited to the significant cost of measures. The Climate Change Committee estimating that to upgrade the energy efficiency of existing properties and install low carbon heating technologies, it would require around £250 billion of investment over 30 years.

Indeed, while we have seen some successful schemes, including the Energy Company Obligation, which has delivered around 2.7 million measures to British households since its commencement in 2013, saving each home an average of £290 on their annual energy bills, the retrofit supply chain remains quite small and risk-averse. The National Audit Office found that only an additional 1,008 companies gained accreditation to deliver measures in response to the Green Homes Grant Scheme, meaning that even when funding has been brought forward, there has been a critical asymmetry between supply and demand.

Finally, access to information, the perceived hassle-factor of securing installers you can trust to deliver the best options for you, and adapting the day-to-day to disruptive building works are all extra hurdles that make energy efficiency installations a challenging project for consumers. As set out by Citizens Advice, the consumer experience for arranging these measures is complicated, and there are too many opportunities for things to go wrong.

ECO+ would simplify the consumer journey for retrofit and address some of the core challenges to growing the energy efficiency market

Energy UK’s proposed energy efficiency scheme, ECO+, would be a voluntary, energy supplier-led and Government-funded scheme that would provide partial subsidies for building fabric energy efficiency measures. This would be available to owner-occupier households in Council Tax bands A to D, who are not currently eligible for ECO4.

Consumers would go to participating energy suppliers to access subsidies, who would then also arrange for the work to be done by utilising their existing relationships with trusted supply chain partners that have been established through ECO. Customers would pay for the costs of measures that are not covered by the subsidy, unlocking private investment into the retrofit of homes and creating opportunities to leverage private finance products.

To keep things as simple as possible, ECO+ would borrow from elements of the ECO’s administrative and competency framework, enabling the scheme to ramp up quickly and ensuring that there are adequate consumer protections in place if and when things do go wrong.

Energy UK will continue to work with Government on shaping forthcoming energy efficiency schemes to make them a success. To find out more about ECO+, read the full report here.

Supporting energy efficiency

Beyond accelerating uptake in the short-term, the market for energy efficiency needs to be consistently delivering improvements through the 2020s to help us meet our climate targets at most efficient cost to consumers. Energy UK has this week joined a broad range of organisations and companies to show support for energy efficiency ahead of the fiscal event on Friday 23 September. This support was shared on Twitter with a high-level infographic and card representing the logos of all those supporting. This activity aimed to ensure that #energyefficiency remains high on the agenda as a long-term response to the cost-of-living crisis.