Written evidence submitted by National Energy Action (NEA) (DHH0038)
1.1 NEA works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm, dry home. To achieve this, we champion and deliver energy efficiency programmes, aim to improve access to energy and debt advice, provide training and co-ordinate other related services which can help change lives.
2.1 On the 27th June 2019, the UK became the first major economy in the world to legally commit to ending its contribution to global warming by 2050, meaning that emissions from domestic households will need to be almost entirely eliminated by 2050 or even sooner. All scenarios for meeting this challenge require:
a) A significant proportion of homes to increase the thermal efficiency of their building fabric; and
b) A significant number of homes to make the switch to using lower carbon fuels to heat the home.
2.2 The technologies required to meet many of these challenges already exist or are being developed. The real difficulty lies with what the changes means for people. Making the required changes is a material challenge for all households, and for many it will be substantial. 2.4 million households In England are estimated to be living in fuel poverty. This means that they are on a lower income, living in a home that cannot be kept warm at a reasonable cost. They already face stark choices as to where to spend their limited resources, with many living on negative budgets, where their income does not even cover basic costs. Poorer homes are more likely to choose to ration their energy usage, heating their homes to an inadequate, unsafe standard, in order to save money and make ends meet. Simply reducing usage below these levels without physical changes to their homes would be significantly detrimental to health.
2.3 In contrast to the more centralised approaches used in the decarbonisation of power, heat decarbonisation requires a decentralised approach that focuses on people and the way they heat their homes. This task is by no means insignificant, and the UK needs to install more than 21,000 measures every week up to 2035. The Committee on Climate Change has said that 19 million heat pumps are expected to be needed by 2050. A straight-line trajectory from 2020 implies around 630,000 heat pumps a year.
2.4 This challenge is currently in part being addressed by the UK Government through three policies that contribute to the decarbonisation of heat in domestic homes but not at the pace and scale required to meet the aforementioned targets:
2.5 The Energy Company Obligation (ECO), which is an energy efficiency scheme working across Great Britain, provides grant funding to cover some, or all of the costs of energy efficiency or heating measures and is notionally targeted at fuel poor households. It is paid for through a levy on electricity bills, and contributes £640m/year towards measures across England, Wales and Scotland.
2.6 The Renewable Heating Incentive (RHI) provides a subsidy, based on the amount of renewable heat made by a qualifying heating system for households across England, Wales and Scotland. It is funded through general taxation. This scheme ends in 2022 and is due to be replaced by a grant scheme that would cover at least a portion of the upfront costs of primarily heat pumps. It is not expected to be targeted at any particular demographic.
2.7 The recent Green Homes Grant which is providing £2bn into energy efficiency and renewable heat for homes in England. Approximately £500m will fund vouchers for low income households and a further £500m is directed through local authorities (£200m this financial year and £300m next financial year) to help low income households install energy efficiency and low carbon heat improvements to their homes.
2.8 For fuel poor, and other financially vulnerable households, many still find it difficult to afford new low carbon technologies to heat their homes. There is currently both a lack of support to move away from high polluting technologies (e.g. solid fuels) and low carbon but expensive ones (e.g. direct electric heating) to new, technologies such as heat pumps. This support is especially needed for electrically heated properties, where the prevalence of fuel poverty is twice than that for gas users.
2.9 Beyond the upfront costs, the barriers that NEA perceive to be greatest to fuel poor households decarbonising their heating are:
2.10 In addition to these hurdles, others will be created due to the high projected cost of reaching net zero. How this is done will be of material importance to the poorest households living in the leakiest homes and costs must be recovered in an equitable way.
2.11 NEA therefore believes that there are 13 actions that must be taken in order to ensure a successful, fair and equitable decarbonisation of heating in homes:
Provide adequate and long-term funding mechanisms
Act on distributional impacts to achieve equity
Provide targeted advice and enhance consumer protection
Develop whole systems approaches
 For more information visit: www.nea.org.uk.
 NEA also work alongside our sister charity Energy Action Scotland (EAS) to ensure we collectively have a UK wider reach.
 A major recent focus for the charity has been NEA’s Health and Innovation Programme (HIP) which was a £26.2 million programme to improve energy efficiency within fuel poor and vulnerable households in England, Scotland and Wales. Launched in April 2015 by NEA as part of an agreement with Ofgem and energy companies to make redress for non-compliance of licence conditions, it remains the biggest GB-wide energy efficiency programme implemented by a charity which puts fuel poverty alleviation at its heart. For more information on HiP visit: https://www.nea.org.uk/hip/
 From the latest fuel poverty statistics dataset https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/882404/annual-fuel-poverty-statistics-report-2020-2018-data.pdf
 Citizens Advice estimate that 40% of households in debt are living on a negative budget. A negative budget is where a debt adviser assesses that a client cannot meet their living costs. https://www.citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/Life%20on%20less%20than%20zero%20(October%202020).pdf
 BEIS have found that fuel poor households, on average, use £319 less energy than they are required to in order to reach a comfortable temperature. This is in contrast to a shortfall of £133 for the whole population. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/789775/Comparison_of_theoretical_energy_consumption_with_actual_usage.pdf
 The National Infrastructure have said “Improving the insulation of buildings makes sense both now and in a low carbon future. The Commission’s analysis suggests that there are over 21 million individual improvements to buildings in England that together could save billions of pounds. This includes insulating 10 million lofts, 6 million floors and almost 5 million walls. This is equivalent to 21,000 improvements being installed every week between now and 2035. The current rate of progress is around 9,000 improvements installed per week.” https://nic.org.uk/app/uploads/CCS001_CCS0618917350-001_NIC-NIA_Accessible-1.pdf