Boosting the energy efficiency of UK homes can go a long way in the battle to reduce carbon emissions. The clear benefits have been established for some time – lower carbon emissions, reduced energy bills, minimised risk to occupants’ health and wellbeing, and more.

However, the UK’s energy efficiency policies – or rather, a lack of urgency on enacting said policies based on feasible delivery and consumer uptake – are holding it back. With this in mind, let’s delve into the challenges that they present as well as the opportunities.

Unpacking energy efficiency in the UK
The two streams of UK home energy efficiency policy, the funded market and paid-for market, are governed by a unique set of regulations. Unfortunately, what these separate strands have in common is murky or misguided policy, which in turn casts doubt on the UK’s ability to meet its 2050 net zero commitments.

In the funded market, stringent regulations have raised issues for companies responsible for installing home energy-efficiency measures. Recent years have seen a barrage of new rules, making it difficult for the energy efficiency industry to thrive. While some policies are under review – a welcome step forward – more must be done to improve policy alignment. The recently launched Great British Insulation Scheme (GBIS) – which promises £1bn in funding to upgrade our draughtiest homes and complements the Energy Company Obligation (ECO) scheme – is a step in the right direction.

But only recently, for instance, SCIS received a document from a regulator that stipulated a way of working that contradicted PAS 2035 – an energy efficiency retrofit standard that SCIS is accredited to. It is this kind of policy confusion that is inhibiting progress.

When casting our eyes to the able-to-pay market, one key roadblock has been navigating Section 75 of the Consumer Credit Act. While this measure was well-intentioned when it was introduced, in practice it has impeded consumers from obtaining loans for energy efficiency measures. The consequent drying up in funding flow has led to industry contraction, discouraging competition and emerging talent from honing their skills. More businesses have left the ECO market in the last few years than ever before – the industry is now 18% of the size it was five years ago.

Falling behind global efforts 
Energy efficiency policy inaction becomes even more of a concern when considering the great strides forward being made around the world.

For instance, France is installing hundreds of thousands of heat pumps annually, while Germany is phasing out fossil fuel heating systems. China is five years ahead with its solar initiatives. 

The UK needs a kick up the backside to get its energy efficiency strategies working effectively – and it is policy that can provide this drive.

...renewable energy producers... receive £67 from the government per kilowatt of generated energy... Surely energy efficiency upgrades, which save kilowatts of electricity, should also receive compensation, directed as incentives for consumers.

Four considerations to inspire change
So, what could a reinvigorated approach look like in reality? A combination of applying hard-earned lessons from past regulation, seizing current opportunities and putting innovative thinking into practice will be crucial to success.

Green mortgages
UK energy efficiency policy isn’t all doom and gloom. Green mortgages have emerged as a beacon of hope, enabling consumers to finance energy-efficiency upgrades affordably. With 0% interest options, homeowners can afford energy-efficient upgrades, ultimately reaping greater savings than their monthly mortgage costs. Such upgrades increase property values, further solidifying the case for green mortgages as a high-return investment. Learning from effective policy and implementation is vital to maintaining the pace of progress.

Informing performance efficacy
To stimulate further energy efficiency moves, quantitative data can be a huge support in driving informed policy direction and consumer uptake.

Advocating for the public availability of smart meter data should be a key industry action point. With 20 million smart meters now in the UK, this data could be a valuable resource for targeting properties in need of energy efficiency upgrades. Also, such data would allow for the assessment of tangible differences before and after energy efficiency measures are implemented. This would function to provide crucial feedback on the effectiveness of energy efficiency measures.

Cross-industry collaboration
The end-to-end retrofitting and energy efficiency installation journey must seamlessly connect assessors, brokers/lenders, installers and consumers, if the UK is to catalyse change effectively.

As such, black-and-white policy clarity supported by consultation with front-line stakeholders who grapple with the practical implications of policy adjustments is key. I would encourage all industry players to demand a seat at the table to ensure that policies are not only realistic, but also reflect collective goals to help consumers create more cost and energy efficient homes. 

Bolder initiatives
Rather than slow rolling the introduction of tougher government regulations and standards which would significantly impact the health and wellbeing of homeowners and occupiers, we should deploy initiatives that dismantle barriers to installing energy efficient upgrades at scale and at affordable cost.

This is one idea that we can be bold about. Observe how renewable energy producers – such as solar farms – receive £67 from the government per kilowatt of generated energy. These sums add up considerably. Surely energy efficiency upgrades, which save kilowatts of electricity, should also receive compensation, directed as incentives for consumers. This could be an important step to unlock homeowners’ buy-in to invest in energy efficient measures.

Looking ahead
History has shown that conflicting energy efficiency policies and regulatory uncertainty can hinder progress and stifle growth. But there is also an opportunity to correct things.

Accessible policies and initiatives, cross-industry collaboration, and equitable compensation schemes working cohesively and in tandem will be essential to kicking energy efficiency progress into high gear. It’s past time to make progressive and practical moves that benefit consumers and the environment, and we all have a role to play.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.