Affordable warmth, clean growth

As the Government prepares to publish its Clean Growth Plan, a major alliance¹ has called for an ambitious new infrastructure programme to help to decarbonise the UK’s buildings and, in the process, boost the economy.

With one-third of UK carbon emissions coming from buildings, the report, “Affordable Warmth, Clean Growth”, recommends a comprehensive Buildings Energy Infrastructure Programme and dedicated delivery agency to achieve major energy savings and de-carbonise the UK heating supply. Prepared by leading consultancy Frontier Economics, it sets out an action plan to make all homes energy efficient within 20 years.

Achieving this goal will require the adoption of world-leading quality standards for retrofitting and constructing homes, area-based schemes led by local authorities, additional funding sources that won’t raise energy bills and financial incentives to encourage households to take up energy-saving measures.

Key recommendations include:

  • A target for all homes to be brought up to an energy performance rating of C (on the A to G scale) by 2035, with all low-income households achieving a C rating by 2030
  • A requirement for new homes to be constructed to a zero-carbon standard by 2020
  • Subsidies for all low-income home-owners to make energy efficiency renovations to their properties
  • A demonstrator programme to test the most attractive schemes to unlock able-to-pay households’ investment in energy saving renovations, including zero interest loans, low interest equity loans you don’t have to pay back until a home is sold and salary sacrifice schemes like those for childcare vouchers
  • Changes to Stamp Duty to encourage renovations when people move home
  • Tax allowances for private landlords and 50% subsidies for social landlords to undertake energy efficiency renovations

It also recommends strengthening regulation in the private rented sector from 2025 to prevent landlords from renting out homes which have below average energy performance, and applying sensible minimum standards when homes are sold to help address health risks and deaths caused by excessive cold. The regulations and minimum standards, properly enforced, can significantly bring down the cost of the programme to the public purse.

There are 19 million homes in the UK with needlessly poor levels of energy performance (below a C rating). Up to a quarter of the energy consumed in homes could be saved cost-effectively, with the technical potential for energy use in homes to be cut in half. Despite this, the level of funding for energy efficiency measures has been cut by 50% since 2012 and the number of major insulation and efficient heating measures being installed has crashed by 80%. The alliance is calling on the Government to reverse that fall and to make buildings’ energy performance a capital infrastructure investment priority.

The full report is available to download for free.