Written evidence submitted by Energy & Climate Intelligence Uni

Lockdown in leaky homes

executive summary

During the coronavirus pandemic, the British public has been advised to stay at home as much as possible, increasing the amount of energy used within households. Energy experts and fuel poverty campaigners have warned of the impacts on energy bills were this situation to extend into the winter months.

This analysis shows that, were this to happen, winter heating costs for families living in the leakiest homes could increase by £49 per month more than for those in houses that do not waste as much heat. It also finds that, even with the additional costs of a winter lockdown, heating bills for more efficient homes will still be lower than those faced by families in leaky homes year after year.

This risks more families being forced to live in cold, uncomfortable homes and jeopardises missing fuel poverty targets, as more households may be unable to afford to heat their homes. Moreover, this could exacerbate financial concerns that millions of Brits already face as a result of the ongoing crisis.

For families on the edge of fuel poverty, energy efficiency measures installed as part of the Government’s new Home Upgrade Grants are expected to save households around £750 on energy bills each year,1  as well as reducing energy waste and curbing emissions. The simplest additions – loft and cavity wall insulation – can save more than £200 per year.

Regional disparities in energy efficiency levels mean certain areas will be affected more by increased energy bills during lockdown. To help those in need, the Government has already announced support packages and committed to ‘levelling-up’ across regions. In the longer term, however, experts agree that the solution is improving building performance and limiting energy waste, rather than helping to pay costs of high bills.

In the 2019 Conservative manifesto, more than £9 billion was committed to increasing the energy efficiency of buildings, yet expected announcements on how this would be spent were missing from the 2020 Budget. At the same time, energy efficiency installation rates have fallen by more than 95% in recent years.

The findings in this report highlight the material impacts that delays to effective energy efficiency policy are having on thousands of families. It is widely seen as crucial that the nation addresses its poor levels of energy efficiency – the UK ranks worst out of 13 comparable European countries for fuel poverty and has some of the leakiest homes in Europe.2

There is currently an increased focus on energy efficiency as part of a post-coronavirus recovery package, with the Government set to release four major documents that are expected to tackle building efficiency during 2020. This report highlights the importance of getting these right.

1      https://www.conservatives.com/news/our-manifesto-gets-brexit-done-and-unleashes-the-potential-of-the-whole-country

2      https://www.e3g.org/docs/ACE-and-EBR-fact-file-2013-03-Cold-man-of-Europe.pdf

introduction

The Government’s response to the 2020 coronavirus pandemic has led to British families spending more time at home, as schools are closed and workers – where possible – carry out their jobs remotely. This change has already caused an increase in domestic energy consumption, and therefore an increase in energy costs borne by British families.3

Energy experts and fuel poverty campaigners have expressed concerns over the effects of remote working and spending more time inside the home on household finances, especially for families under financial stress, should the current situation continues through the winter months when central heating would be used for a large proportion of waking hours.4

Recent polling shows that over half of Brits (56%, rising to 75% for families with children)5 recognise that they are currently using more energy as a result of lockdown however only 35% have thought about the impact that this will have on energy bills. A recent Ofgem survey6 revealed that 44% of respondents also expect their financial situation to worsen during the next 6 months.

At  the time of writing, it seems likely that large swathes of the population will continue to    spend significantly more time at home – including working – until at least the end of 2020, with millions of households facing inflated heating bills as winter encroaches. This is particularly concerning in light of fears of a potential ‘second wave’ of coronavirus occurring over the next few months or years.

The UK has some of the least efficient and leakiest housing stock in Europe, with the average British home losing heat three times more quickly than its Swedish counterpart,7   while the proportion of people living in leaky homes in the UK is almost a third higher than in France.8

Leaky homes not only waste more energy through roofs, walls and windows, but also inflate energy bills and make reducing carbon emissions more difficult.

Cold and draughty homes have been linked to multiple health issues, as well as excess deaths during winter months. This, combined with the increased costs, has led to leading advisory bodies prioritising the need for improved building efficiency.9

3      https://www.theguardian.com/money/2020/may/04/uk-household-energy-bills-to-soar-by-32-per-month and https://www.bbc.co.uk/news/technology-52331534

4      https://inews.co.uk/news/environment/draughty-houses-lockdown-coronavirus-energy-efficiency-2548215

5      https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/bulletins/personalandeconomicwellbeingintheuk/may2020

6      https://www.ofgem.gov.uk/

7      http://www.energybillrevolution.org/wp-content/uploads/2013/12/ACE-Research-Comparing-the-UK-and-Sweden-3.12.13.pdf

8       https://www.e3g.org/docs/ACE-and-EBR-fact-file-2013-03-Cold-man-of-Europe.pdf

9      https://www.theccc.org.uk/wp-content/uploads/2019/02/UK-housing-Fit-for-the-future-CCC-2019.pdf and https://www.nic.org.uk/news/ mps-highlight-need-for-swift-action-to-boost-energy-efficiency-of-uk-homes-and-workplaces/

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energy efficiency in the uk

Despite being seen as crucial for  reducing both fuel poverty and carbon emissions, efforts       to improve the energy performance of Britain’s building stock has slowed in recent years. For example, the BEIS Select Committee highlighted10  that rates of installation of loft and wall insulation are now around 95% lower than they were in 2012. It also found that, in order to achieve targets set in the 2017 Clean Growth Strategy, retrofit installations needed to increase seven-fold.

The energy efficiency of homes across the UK is measured by Energy Performance Certificates (EPCs). These range from A – G, with A being the most efficient. EPCs are required when a home is bought or let and underpin many of the Government’s energy performance statistics and targets.

One key Government target is to bring all homes in England to EPC band C wherever ‘practical, feasible and cost-effective’11   by 2035, accelerated to 2030 for social housing or for families living in fuel poverty.

Current statutory energy efficiency commitments require all fuel poor homes in England to be levelled up to the same minimum energy efficiency standards of a current new-build home, which is EPC band C, by 2030. According to the Committee on Fuel Poverty (CFP), progress towards this target is flat-lining as only 12.4% of all households meet the 2030 requirement.12

The latest fuel poverty statistics13   reveal that there is still some way to go to reach these targets (Table 1), although rates of fuel poverty did decrease by 0.7% from 2017 to 2018, an improvement on the 0.2% fall the year before. The CFP has identified that “overall progress is stalling, with a mixed performance across each of the three main measures”.14

Table 1: Governmental fuel poverty statistics. Source: BEIS (2020)15

10     BEIS Select Committee (2019). Building to net-zero.

11     BEIS (2017). Clean Growth Strategy.

12     https://www.gov.uk/government/statistics/annual-fuel-poverty-statistics-report-2020

13     https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/882404/annual-fuel-poverty-sta- tistics-report-2020-2018-data.pdf

14     https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/754361/Committee_on_Fuel_Pov- erty_Annual_Report_2018.pdf

15     https://www.gov.uk/government/collections/fuel-poverty-statistics

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The Conservative Party’s 2019 election manifesto contained pledges for energy efficiency worth £9.2 billion over ten years (Table 216). It also committed to “levelling up” spending across the regions, creating more jobs and opportunity for areas outside of London and the south east.

Many regions with the leakiest homes and highest incidences of fuel poverty would benefit from increased spending on energy efficiency and growth in highly skilled job opportunities.

Table 2: Building efficiency pledges made in the Conservative 2019 Election manifesto

It is also widely recognised that achievement of net zero carbon emissions by 2050 will necessitate extensive improvements to the building fabric of the entire housing stock; upgraded heating systems will also be required.17

The current flagship energy efficiency scheme in England, the Energy Company Obligation (ECO) scheme has been in place since 2013. It has, however, been amended in several iterations over the years and has fallen wide of delivering the scale changes needed to meet energy or climate targets.18

ECO was refocussed onto fuel poor homes in 2018. While helping households most in need, it has been suggested that additional schemes should be brought in to address as many homes as possible, reducing both costs to the consumer and carbon emissions.19

To this end, the BEIS Select Committee energy efficiency inquiry states that “following the example of the devolved nations, we recommend three tiers of funding consisting of ECO, centrally funded local authority schemes, and a further national funding safety net, to provide a comprehensive strategy for energy efficiency for fuel poor households”. The Committee believes that this would allow significant investment to be unlocked, thereby pushing up installation rates.

16      https://assets-global.website-files.com/5da42e2cae7ebd3f8bde353c/5ddaa257967a3b50273283c4_Conservative%202019%20 Costings.pdf

17     CCC (2019). Net-zero: the UK’s contribution to stopping global warming

18      https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/1730/1730.pdf

19      https://www.cse.org.uk/downloads/reports-and-publications/fuel-poverty/policy/insulation-and-heating/beyond-the-ECO.pdf

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While the BEIS Select Committee recommend that ECO should continue to be targeted at fuel poor households, there remains an absence of programmes to tackle the rest of the housing stock.

Simple energy efficiency measures such as loft and cavity wall insulation can save an average household around £215 on their annual energy bills whilst making the home feel a lot warmer and less draughty.20   Such measures pay back investment costs in just 2 – 5 years, before locking in lower energy bills for decades to come. Estimates for more extensive retrofits, such as those in the Conservative Manifesto, reach annual savings of £750.21

More efficient, warmer homes are also more adapted to the UK’s net zero future, futureproofing homes for low carbon heating systems, which generally require a higher level of energy efficiency.

The Committee on Climate Change (CCC) and BEIS Select Committee, consumer groups such as Citizens Advice, National Energy Action, as well as the Government in its manifesto promises, all acknowledge the significant opportunities that energy efficiency offers.

Although setting out their intentions to boost energy efficiency across the UK, leaders across the energy industry have suggested that current policies in place do not align with the Government’s EPC or net zero targets and should be amended and improved.22

For example, the CCC says “current policy is failing to drive uptake of energy efficiency in existing homes – installation of loft and wall insulation is at just 5% of peak market delivery in 2012, despite significant remaining cost-effective potential.” It recommends that “the uptake of energy efficiency measures such as loft and wall insulation must be increased” including long-term policy for able-to-pay households and in social housing.

This report will examine the effects of slow progress on energy efficiency on domestic energy bills, should remote working and social distancing measures continue into the winter months.     It will assess the extent to which heating bills are likely to rise in inefficient homes across the    UK compared with those with better energy performance and how increasing installation of energy efficiency measures could help to combat these rises.

20       https://www.bi.team/publications/evaluating-the-nest-learning-thermostat/

21       https://www.conservatives.com/news/our-manifesto-gets-brexit-done-and-unleashes-the-potential-of-the-whole-country

22       https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/1730/1730.pdf