Pressure is building to roll out energy efficiency measures across our housing stock, and rightly so – the UK has some of the leakiest housing stock in Western Europe¹. On top of this, the October price cap rise is expected to bring the average bill to over £3000². It is a cliché but the cheapest energy is the energy we don’t use.
Whilst schemes exist to help the most vulnerable and fuel poor, increasing prices mean that many of the “able to pay” households will also be struggling to heat their homes over the winter. Targeting support towards the fuel poor is absolutely the right thing to do. However, the reality is, if we are serious about achieving net zero, 28 million UK homes will need to be net zero as well, which means insulating all of them. But without a supportive policy environment, we are unlikely to see this shift. Currently, there are no incentives or policy mechanisms targeted to enable energy efficiency retrofits for these consumers. This policy void needs to be addressed.
So, tapping into the able to pay sector is absolutely critical – The Treasury has recognised this, with reports of Rishi Sunak previously considering an energy efficiency programme for homeowners in the UK³.
This builds on a proposal that has been recommended to Government by industry to introduce a part funded able to pay scheme, which complements the current Energy Company Obligation (ECO). This new scheme, known as ECO Plus, would be focused on insulation measures and would be a similar size to ECO (£1 billion). But would a scheme of this nature be successful?
History suggests it might, with high demand for the Green Homes Grant for example. To understand whether the market could deliver, Gemserv conducted some research, on behalf of EDF Energy, EON, OVO and ScottishPower. We sought to understand the readiness of supply chain and appetite for a proposed scheme.
For ECO Plus to be a success, the supply chain must have confidence in, and be able to, embrace a scheme of this size. Something, the Department for Business Energy, and Industrial Strategy is acutely aware of. To provide this certainty, the energy companies have proposed that following a similar structure to ECO makes sense.
We surveyed over 130 individuals from across the energy efficiency supply chain and held six depth interviews in June. Our key findings were:
- The energy efficiency supply chain is operating with some spare capacity.
- The ECO Plus scheme is expected to create jobs in nearly every business.
- On average, with the introduction of ECO Plus funding, companies expect to expand capacity by up to 120% after 1 year.
- Only 25% of respondents saw challenges to scaling up with the main one being the availability of a qualified workforce.
- There is a need for certainty in demand with respondents calling for ECO Plus to be a long-term programme (5 years or more) to enable a successful ramp up of capacity.
With momentum building for the need to insulate the UK’s housing stock we are hopeful this research will inform a new energy efficiency scheme for the able to pay sector.
The full report, which has been shared with civil servants, can be found here.
Note: The survey findings reflect the supply chain’s view of their own capacity to deliver additional installations and no separate independent assessment has been undertaken of this, either with respect to the staffing and material resources which would be required, or the volume of suitable properties.
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