977. The Heat and Buildings Strategy only commits to government spending in this Parliament, but more is needed to drive down the cost of heat pumps and deliver energy efficiency. The Review heard that the Heat and Buildings Strategy also does not go far enough to address issues that we have seen reflected in our own analysis and is crucial to allowing all households to benefit from the transition: long-term support to low-income households with upfront capital costs, electricity rebalancing, electric vehicle charging price, and access to finance. Coordinated action across multiple sectors is needed to ensure consumers can realise their net future benefit in the long term.
978. Government needs to go further and faster to decarbonise our homes beyond EPC C and maximise the opportunities that energy efficiency and low carbon heating have to offer by looking ahead to a new NZPC (Net Zero Performance Certificate). That is why the Review is calling for a new mission, to bolster energy efficiency for households, including low carbon heating and solar.
Mission: Energy efficiency for households. This will not only reduce energy demand and bolster our energy security, but also save consumers money on their bills. This should be driven a set of specific actions to be taken over the next ten years. | |
Issue | Action recommended |
The distributional impact of current energy efficiency policies means that not every household is benefitting. | Government to choose from options that help increase heat pump efficiency: • Mandating minimum efficiency for installations • Heat pump coefficient of performance competition • Accelerated training and installation standards |
There are high upfront costs for energy efficiency measures and low carbon heating, and running costs are high especially in inefficient homes. | Government should extend the Boiler Upgrade Scheme to 2028 and consider whether grant levels should be increased in light of inflationary pressures, before being scaled down over time. This should happen alongside efforts to increase awareness of government support. Support for those unable to afford the upfront costs associated with improving energy efficiency and moving to low carbon heating systems should be continued and expanded, namely through the Home Upgrade Grant (HUG), Social Housing Decarbonisation Fund (SHDF) and other existing schemes for low-income households. |
There is a significant skills supply gap for energy efficiency and low carbon heating. | Government should set the policy framework and supportive investment environment to encourage reskilling and greater training opportunities in the heat pump sector and work to encourage adoption of standards to increase firms able to take up existing schemes. |
There is a lack of legislative certainty on what is the expected standard for homes. | Government should legislate for all homes sold by 2033 to also have an EPC rating of C or above in line with the aforementioned NZPC, with exclusions around certain properties (e.g. listed properties, on grounds of affordability). Government should also mandate landlords to include 'average bill cost' alongside the EPC (and possible future NZPC) rating, when letting a property out. This will help renters understand what costs to expect, while also helping to put a premium on energy efficient homes. |
There is a lack of information and advice for consumers on how to upgrade their home. | Government should expand its energy efficiency advice service in 2023, ensuring that it helps consumers to access qualified traders and providers in local areas. Government should support establishing retrofit hubs by 2025 to bridge the gap between households and suppliers. These could enable installers to seek training and impartial advice and could connect households to suitable installers. |
Government should ensure the right policies are in place to achieve the UK's demand reduction targets, building on the 2022 Autumn Statement announcement, with interim targets and milestones to hit this goal. Noting the UK's 2050 net zero ambitions, the government should publish clear analysis of which mix of policy measures gets the UK to the 15% target and assure future funding for those policies. |