The UK has around 29 million homes with considerable potential to improve their energy efficiency. Homes account for just under 30% of energy use and around 20% of greenhouse gas emissions in the UK. It is one of the few sectors where emissions reductions have stalled.
Space heating is the dominant driver of energy consumption in existing homes (making up 63% of annual energy consumption), followed by hot water demand and appliance demand. Interventions to improve energy efficiency will bring down energy bills, provide greater thermal comfort, prevent overheating, improve indoor air quality, relieve pressure on the NHS and welfare provision, and provide benefits in reducing annual and peak electricity demand.
The Government has pledged £9.2bn in its manifesto to improve the energy efficiency of homes, schools and hospitals. Decarbonising our existing homes presents an opportunity to build a domestic supply chain and skills base and deliver on the Government’s levelling up ambitions. Driving widespread improvements in energy efficiency is notoriously difficult. Yet energy efficiency investments could be particularly relevant to kick starting the economy in the aftermath of Covid-19 by making it a national infrastructure priority.
The Government’s Clean Growth Strategy (2017) set new aspirations for energy efficiency and has a stated ambition for all homes to be EPC rated ‘C’ by 2035 where cost effective, affordable and practical. Currently 19 million homes are EPC rated D or worse and uptake of energy efficiency measures has stalled. The Committee on Climate Change has stressed that widespread deployment of energy efficiency measures across the UK’s building stock will be crucial to any credible and cost-effective strategy to meeting net zero. This includes improvements to around 6 million cavity walls, 6 million solid walls and 21,000 loft insulation measures. There are over 10 million owner occupied households below the EPC band C. This is the market where the largest carbon savings can be made yet there are no incentives for this market to grow.
In addition to improving household incomes, energy efficiency is key to alleviating fuel poverty. Around 2.53 million households are in fuel poverty in England alone. Current fuel poverty targets are expected to be missed and when compared with 30 other European countries it was found that the UK has the sixth-worst long-term rate of excess winter deaths. Improving the energy efficiency of buildings plays a crucial role in tackling fuel poverty and will help bring down energy bills for the most vulnerable customers. The Government’s manifesto included a commitment to invest £2.5bn over five years providing Home Upgrade Grants for fuel poor homes.
As part of the inquiry, the Committee will follow up on the findings of the former BEIS Committee’s inquiry into energy efficiency, which concluded that major policy gaps still exist, and consider whether its recommendations have been implemented.