Fourth Report - Energy Efficiency of Existing Homes

We recommend that the Government review the feasibility of its aspiration to achieve a minimum of EPC band C by 2035, given current progress on improving energy efficiency. As well as setting out how it plans to meet existing targets, … Read more We recommend that the Government review the feasibility of its aspiration to achieve a minimum of EPC band C by 2035, given current progress on improving energy efficiency. As well as setting out how it plans to meet existing targets, it should set out a strategy to increase ambition in line with its commitment to net zero through its Heat and Buildings Strategy. Show less

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We recommend that BEIS review its cost projections on energy efficiency and includes the cost of low carbon heating. The Department should consult the building and retrofit sector to ensure that its top-down modelling reflects real-world costs. It should also … Read more We recommend that BEIS review its cost projections on energy efficiency and includes the cost of low carbon heating. The Department should consult the building and retrofit sector to ensure that its top-down modelling reflects real-world costs. It should also set out the proportion of efficiency improvements it expects to be paid for from the public purse, and how many homes it considers out of scope for energy efficiency improvements under its definition of “cost effective, practical and affordable”. There is a danger that these homes will be left behind, and this could impact on wellbeing and create permanent blight. The Government should explain in response to this report what its strategy is for those homes that will not achieve its energy efficiency aspirations. (Paragraph 32) Current Government policy on domestic energy efficiency Show less

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We support the extension of ECO to 2026 and the extra funding announced in the Fuel Poverty Strategy. The Government must review whether ECO is still delivering Energy Efficiency of Existing Homes 57 value for money and whether the energy … Read more We support the extension of ECO to 2026 and the extra funding announced in the Fuel Poverty Strategy. The Government must review whether ECO is still delivering Energy Efficiency of Existing Homes 57 value for money and whether the energy bill is the most appropriate, fair and effective means of funding the scheme, since the poorest households pay disproportionately towards its costs. Show less

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We recommend the Government reviews the way ECO is funded, in common with the other policy costs that are added to consumer electricity bills rather than gas. Disproportionate use of this regressive funding mechanism is hampering the adoption of low … Read more We recommend the Government reviews the way ECO is funded, in common with the other policy costs that are added to consumer electricity bills rather than gas. Disproportionate use of this regressive funding mechanism is hampering the adoption of low carbon heating options such as heat pumps. We recommend that the Government consults on the balance of levies on electricity versus gas/other fossil fuel heating sources, in order to encourage the uptake of electrifying home heating through the adoption of heat pumps. Show less

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We recommend that Home Upgrade Grants are launched in full before the end of 2021, backed by the entirety of the funding pledged for the scheme, to mobilise supply chains for low carbon heating. The Government should also set out … Read more We recommend that Home Upgrade Grants are launched in full before the end of 2021, backed by the entirety of the funding pledged for the scheme, to mobilise supply chains for low carbon heating. The Government should also set out how it intends to administer the scheme and what role there will be for local authorities who are well placed to identify vulnerable households. Show less

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We recommend that the Green Homes Grant scheme be urgently overhauled and extended to provide a genuine long-term stimulus to the domestic energy efficiency sector. The scheme should not be scrapped or quietly wound down. The Government must address the … Read more We recommend that the Green Homes Grant scheme be urgently overhauled and extended to provide a genuine long-term stimulus to the domestic energy efficiency sector. The scheme should not be scrapped or quietly wound down. The Government must address the design and administration issues with the scheme, and all allocated funding that has not been spent by the end of March 2021 should be rolled over into the next financial year. A multi-annual scheme must be delivered to provide the financial support to owner occupiers and build trust within the industry to encourage installers to get accredited and enable companies to hire staff. In its response to this report the Government should set out how it intends to revise the types of measures included in the scheme, streamline the application process, including the number of quotes required for application, and remove unnecessary bureaucracy at every step. Show less

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We recommend that BEIS and the Treasury undertake a joint review of the preparation, launch, funding and delivery of the Green Homes Grant programme, and that the recommendations of that review be applied to all cross-Government working on programmes to … Read more We recommend that BEIS and the Treasury undertake a joint review of the preparation, launch, funding and delivery of the Green Homes Grant programme, and that the recommendations of that review be applied to all cross-Government working on programmes to deliver net zero objectives. Show less

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We recommend that, following an evaluation of Phase Two, the scheme is expanded with a larger budget, over a multi-year period, and a greater role for BEIS’s local energy hubs to supplement local authority capacity.

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The Government should bring forward the allocation of the £3.8bn of funding pledged before the 2019 general election. This would deliver cost savings at scale. This funding should be frontloaded to reap the benefits of cumulative emissions savings towards net … Read more The Government should bring forward the allocation of the £3.8bn of funding pledged before the 2019 general election. This would deliver cost savings at scale. This funding should be frontloaded to reap the benefits of cumulative emissions savings towards net zero. The Government should also allow housing associations to lead bids, so as to ensure that the available funding is used quickly and effectively. (Paragraph 86) Energy Efficiency of Existing Homes 59 Show less

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Whilst we welcome the launch of the Green Jobs Taskforce and the Green Homes Grant Skills Training Competition, the Government must create a visible, long- term market that makes energy efficiency and heat pump installation a stable and desirable profession. … Read more Whilst we welcome the launch of the Green Jobs Taskforce and the Green Homes Grant Skills Training Competition, the Government must create a visible, long- term market that makes energy efficiency and heat pump installation a stable and desirable profession. The Department for Business, Energy and Industrial Strategy, working with the Department for Education, should commit to the funding of a dedicated training programme to support a long-term strategy for education and training in green jobs. Training is also required to develop the networks of advisers and coordinators which will underpin the successful growth of employment opportunities in the sector. Show less

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We recommend that as part of the forthcoming Heat and Buildings strategy a national retrofit strategy is developed with colleges and other education providers to provide the training and re-training needed to prepare our homes for a low-carbon future. The … Read more We recommend that as part of the forthcoming Heat and Buildings strategy a national retrofit strategy is developed with colleges and other education providers to provide the training and re-training needed to prepare our homes for a low-carbon future. The strategy must address the much-needed increase in certified heat pump installers to meet expected demand including through recruitment incentives, with support for apprenticeships and reskilling. Show less

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We recommend that the social rented sector should be subject to the same standards as the private rented sector.

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In its forthcoming Heat and Buildings Strategy, the Government, acting on the advice of the Climate Change Committee, should set an ambitious and realistic trajectory for owner occupiers to achieve minimum EPC C standards. The CCC recommends that by 2028 … Read more In its forthcoming Heat and Buildings Strategy, the Government, acting on the advice of the Climate Change Committee, should set an ambitious and realistic trajectory for owner occupiers to achieve minimum EPC C standards. The CCC recommends that by 2028 all properties achieve EPC level C at the point of sale. This is a hugely ambitious target and the Government must set out how it plans to raise public engagement and revise its delivery mechanisms to achieve this target and specify where exemptions may be necessary. These measures may include cost caps to be applied to such work and exemptions from the requirement to meet these standards: for instance, on the grounds of affordability or for properties recognised as hard to treat. It should also 60 Energy Efficiency of Existing Homes ascertain the risks of creating a two-tier mortgage market and long-term blight for owner occupiers and the private rented sector of hard-to adapt properties and identify and implement measures to avoid this impact. Show less

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We recommend that the Chancellor of the Exchequer look again at proposals to reduce to five per cent the rate of VAT on the labour element of refurbishment and renovations. The Government should also bring forward proposals to reinstate the … Read more We recommend that the Chancellor of the Exchequer look again at proposals to reduce to five per cent the rate of VAT on the labour element of refurbishment and renovations. The Government should also bring forward proposals to reinstate the reduced rate of VAT payable on Energy Saving Materials at its former level of five per cent and to expand its scope to cover energy storage, heat pumps and electric vehicle charging. Show less

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We support and reiterate the Green Finance Taskforce recommendation that the Government should pilot a stamp duty rebate for homeowners that improve the efficiency of their homes within the first year of purchase. We recommend that the Government work with … Read more We support and reiterate the Green Finance Taskforce recommendation that the Government should pilot a stamp duty rebate for homeowners that improve the efficiency of their homes within the first year of purchase. We recommend that the Government work with the financial sector and major landlords, including local authorities and other social landlords, to stimulate renovation through the introduction of green mortgages, green finance and low cost loans. These instruments would help to address the barriers to energy efficient renovation and retrofit in the form of high upfront costs of energy efficiency measures. The Government should consider how the national infrastructure bank could be used as a vehicle to finance energy efficiency given the scale of success achieved in Germany through its state funded low interest loan scheme. Show less

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The Government should work with the financial services sector to devise and implement a communications strategy to raise awareness about, and to encourage the uptake of, appropriate types of financing measures already on the market being offered, such as green … Read more The Government should work with the financial services sector to devise and implement a communications strategy to raise awareness about, and to encourage the uptake of, appropriate types of financing measures already on the market being offered, such as green mortgages. (Paragraph 134) Energy Efficiency of Existing Homes 61 Show less

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We recommend the EPC methodology is fundamentally overhauled to support low carbon heating measures by indicating, in its headline rating not only the fuel cost of heating a property but also its energy and carbon metrics. The measures in the … Read more We recommend the EPC methodology is fundamentally overhauled to support low carbon heating measures by indicating, in its headline rating not only the fuel cost of heating a property but also its energy and carbon metrics. The measures in the Government’s EPC action plan are not enough to achieve what is needed to support the decarbonisation of homes: we recommend that Ministers look at this again with far greater urgency. Well in advance of 2025, while the energy market is rapidly decarbonising, we would like to see the introduction of EPCs more reflective of real-world performance, and the publication of regular updates on the developing methodology behind EPC assessments. Those carrying out EPC assessments should be suitably qualified and trained in energy modelling and assessment. Show less

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We recommend the Government develop an approved, standardised methodology and data framework for Building Renovation Passports and supports their roll-out, with a view to the eventual replacement of Energy Performance Certificates.

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We recommend the Government’s present basic energy advice service available in England is upgraded to a specialist bespoke advice service similar to the Home Energy Scotland network. This should include measures to identify the most appropriate financing programme for each … Read more We recommend the Government’s present basic energy advice service available in England is upgraded to a specialist bespoke advice service similar to the Home Energy Scotland network. This should include measures to identify the most appropriate financing programme for each consumer. Show less

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We recommend that within its Heat and Buildings Strategy, the Government consider stipulating the use of sustainable materials in public sector energy efficiency contracts as a first incentive to drive the UK’s domestic supply chain of these materials. (Paragraph 159) … Read more We recommend that within its Heat and Buildings Strategy, the Government consider stipulating the use of sustainable materials in public sector energy efficiency contracts as a first incentive to drive the UK’s domestic supply chain of these materials. (Paragraph 159) 62 Energy Efficiency of Existing Homes Show less

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The scale of the challenge to retrofit existing homes to tackle the climate crisis is enormous. Energy efficiency is a precursor to the transition to low carbon heat, so action must be taken in the 2020s to set homes on a decarbonisation trajectory to meet our net zero targets. The …

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There is a wide variation in the costs for bringing all homes in the UK up to an EPC grade C. We have heard of costs averaging £18,000 to retrofit a property, before addition of a heat pump. Given that there are around 19 million properties in the UK in …

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While the energy efficiency of two million homes has been successfully upgraded under the ECO, the number of measures installed has reduced significantly in recent years and the Government’s fuel poverty targets are not expected to be met. The inability to use ECO with other sources of funding is hampering …

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We welcome the clarification provided in the Energy White Paper that Home Upgrade Grants will focus on the worst-quality off-gas grid homes with low income households in England. We consider that this focus is the right one. Using the indicative costs for improving energy efficiency and heat pump installation and …

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We welcome the Government’s introduction of a scheme for owner occupiers to fund energy efficiency improvements. Such a scheme is essential in order to achieve the ambition to reach energy efficient homes by 2030, given this is by far the largest pool of housing stock across the UK. But the …

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It is commendable that the Government has been keen to avoid fraud in administration of the scheme by only allowing Trustmark and PAS registered companies to participate. But the anti-fraud precautions have been so complex that vouchers are simply not being issued. Consumers are frustrated by delays in delivery, and …

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Sustained delivery of measures to support the transition to a 68 per cent reduction in emissions by 2030, and net zero by 2050, will require strategic planning and thorough engagement with all stakeholders. The Government’s strategic ambitions here require multi-annual spending commitments which may need to supersede Spending Review perspectives. …

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We welcome the Green Homes Grant Local Authority Delivery scheme, and, in particular, the fact that it can be used to deliver improvements across all tenures. We consider that it has real potential to help build local authority capacity and energy efficiency supply chains by supporting area based approaches.

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We welcome the Social Housing Decarbonisation fund and support its aims to retrofit social housing at scale. However, to date only a fraction of the funding has been made available for demonstrator projects that may well not deliver the efficiencies that larger schemes could achieve.

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The proposed extension to the Warm Home Discount provides no apparent incentive to poor or vulnerable customers to invest in improving the energy efficiency of their homes. Energy efficiency is the most sustainable long-term solution to fuel poverty. The money earmarked for additional years of the scheme could be better …

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Stop-start Government policies and intermittent funding streams have resulted in a dearth of installers of energy efficiency measures. A lack of accredited tradespeople has hampered the initial delivery of the Green Homes Grant, and there is a significant risk that the Government will not meet its heat pump installation targets …

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We support the introduction of minimum energy performance standards across all tenures. Without these minimum standards, it is unlikely the Government’s overall ambitions on retrofitting energy efficiency will be achieved.

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Green finance options are essential to encourage owner occupiers to take action on energy efficiency. We welcome the ambition of some leading lenders to make green mortgages available, and the Government consultation on how mortgage lenders can help householders to improve the energy performance of their homes.

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Alongside an extension of the Green Homes Grant, other financial incentives, such as low interest loans, will need to be made available to owner occupiers and landlords to achieve the thorough retrofit of domestic housing stock the Government envisages. The Green Finance Institute has identified 21 possible products. It is …

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Despite the need to make progress in improving energy efficiency of 19 million homes to achieve net zero Britain objectives, no mention was made in the Budget statement on 3rd March by the Chancellor of energy efficiency, nor any steps taken to improve delivery of the Green Homes Grant, his …

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Energy Performance Certificates have a range of flaws, with their inability to reflect real-world energy performance being the biggest challenge. Desk-based assessments with out-of-date software are doing nothing to improve the market value of decarbonised homes and do not accurately reflect the progress the country is making in improving the …

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Building renovation passports have the potential to provide much more accurate data on energy usage and could be used to unlock green finance. They provide homeowners with long-term renovation strategies which can minimise disruption to their properties and thereby encourage more extensive retrofitting of energy efficiency measures.

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We have heard of the benefits of a bespoke advice service on energy efficient retrofitting. We consider that such a service will be essential in order to achieve the pace of change needed to meet the net zero target.

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Sustainable building materials are not being utilised to anywhere like their full potential in the UK. The use of natural fibre insulation could have significant benefits for the UK’s older housing stock.

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