Energy campaigners call for billions in extra UK clean heat funding

A coalition of energy providers, environmental campaigners, charities and building engineering bodies is calling for a substantial expansion of incentives to create more energy efficient and sustainably heated homes.  This should include billions of pounds in funding to help ramp up the effective adoption of heat pumps, according to a recently published open letter.

The Energy Efficiency Infrastructure Group (EEIG) has written to Prime Minister Boris Johnson, Chancellor Rishi Sunak and other senior Cabinet members to lobby for improved short and longer-term strategies to ensure more affordable, cleaner heat.

The open letter said that ongoing concerns about the impact on homeowners from a surge in gas and energy prices expected this year should necessitate the need to mass retrofit existing buildings so that less fossil fuels are required for domestic heating.

It stated that there was not any single overnight fix for creating or renovating homes to ensure a widescale shift to cleaner heat. Instead, the letter argued that a range of commitments were needed from UK authorities.

These would include honouring commitments within the Conservative Party’s previous election manifesto to fund energy efficiency improvements in existing homes.  The open letter said this would involve allocating £1.4bn for the Home Upgrade Grant and an additional £0.2bn to support the government’s Social Housing Decarbonisation Scheme over the next three years.

A potential successor to the Green Homes Grant

The EEIG, which includes CIBSE, Energy UK, the WWF and the National Energy Action (NEA) charity among its members, also recommends that an additional £3.6bn is set aside to establish a new grant or subsidy scheme to insulate homes.  This should be open to all other UK homes not eligible for existing efficiency or heat subsidies.

Any new incentives introduced by the government should also build on lessons taken from previous schemes it has introduced in order to ensure more effective delivery, according to the EEIG. This would almost certainly include correcting mistakes with the Green Homes Grant. The grant was abruptly terminated in 2021, less than a year after launching, and has since been found by a parliamentary watchdog to have spent over £50m in admin costs alone despite falling well short of its targets.

The EEIG stated, “At the moment, two-thirds of English households have no access to any financial support to insulate their homes – a key measure of reducing heat demand. The pot of money available to provide grants for heat pumps should also be increased from £400m to £4.15bn by 2025 to accelerate the transition away from gas heating for net zero.”

Short-term response

The open letter concluded that shorter-term priorities to address the cost of heating homes should include introducing energy efficiency improvements in homes.  Research cited by the EEIG has concluded that improvements in the UK’s least efficient homes – those with an EPC rating of ‘D’ or below – to an EPC ‘C’ rating would reduce household bills by over £500 a year.

Concerns around the current costs of fuel and gas were also highlighted by the EEIG as offering a compelling case to accelerate the government’s previously pledged commitment to rebalance energy costs to incentivise electric solutions for heating.

The release of the government’s Net Zero Strategy last October saw the announcement of plans to launch a Fairness and Affordability Call for Evidence looking at energy levies and how they impact the cost of electricity compared to gas.  A decision is expected to be taken over the course of 2022 on what action might be taken to encourage a move from fossil fuels for the purposes of heating homes.