Time to revolutionise energy efficiency

Nic Gillanders unveils the energy efficiency conundrum facing the UK and suggests some solutions to benefit both consumers and the environment

Boosting the energy efficiency of UK homes can go a long way in the battle to reduce carbon emissions. But the UK’s energy efficiency policies are holding it back. With this in mind, let’s tackle the nuances of the policies – highlighting the challenges that they present as well as the opportunities.
UK energy efficiency policy can be divided into two streams. There is the funded market, governed by its unique set of policies and regulations, and the paid-for market.
In the funded market, stringent regulations have posed significant challenges for companies responsible for installing energy-efficient measures within homes. Recent years have seen a barrage of new rules, making it difficult for the energy efficiency industry to thrive. While some policies are under review – a welcome step forward – more needs to be done to improve the accessibility and practicality of policies. Only recently, for instance, SCIS received a document from a regulator that stipulated a way of working that contradicted PAS 2035 – an energy efficiency retrofit standard that SCIS is accredited to. It is this kind of policy confusion that is holding the industry back.
A major obstacle for the able-to-pay market that the energy efficiency industry has had to navigate is Section 75 of the Consumer Credit Act. This impedes consumers from obtaining loans for energy efficiency measures – a slowdown in funding flow that has contributed to the contraction of the industry. The industry is now 18 percent of the size it was five years ago – with more businesses leaving the ECO market in the last couple of years than ever before.
Despite this, green mortgages have emerged as a beacon of hope, enabling consumers to finance energy-efficiency upgrades affordably. With zero percent interest options, homeowners can afford energy-efficient upgrades, ultimately reaping greater savings than their monthly mortgage costs. Moreover, such upgrades increase property values – further solidifying the case for green mortgages as a high-return investment. This goes to show the role that policy plays in the growth of the energy efficiency industry.
To catalyse change effectively, the industry requires black-and-white policy clarity, supported by consultation with front-line stakeholders who grapple with the practical implications of policy adjustments.
In terms of stimulating the energy efficiency industry, while green mortgages are a good step in the right direction from a policy perspective, there is still more that the government can do.
SCIS advocates for the public availability of smart meter data. With 20m smart meters now in the UK, this data could be a valuable resource for targeting properties in need of energy efficiency upgrades. Also, such data would allow for the assessment of tangible differences before and after energy efficiency measures are implemented. This would function to provide crucial feedback on the effectiveness of energy efficiency measures.
Despite the urgent need to address energy efficiency, the UK lags behind other countries. France is installing hundreds of thousands of heat pumps annually, while Germany is phasing out fossil fuel heating systems. China is five years ahead with its solar initiatives. The UK needs a kick up the backside when it comes to its approach to energy efficiency – and it is policy that can provide this drive.
SCIS calls for stakeholder collaboration, whose expertise is grounded in the realities of implementation, to influence legislation effectively. This approach ensures that policies are not only practical but also reflect the collective goals of industry players and environmental advocates to help consumers create more cost and energy-efficient homes.
While it’s important to ensure that the timeline to meet new PAS requirements is achievable and affordable, hitting pause on the introduction of tougher insulation standards, which would significantly impact the health and wellbeing of homeowners and occupiers, is not the solution.
Instead, policymakers and industry should steer focus towards stripping out the barriers that are preventing efficient upgrades at scale and at affordable cost.
This is something that we can be bold about. Here’s one idea. Consider the fact that renewable energy producers – such as solar farms – receive £67 from the government per kilowatt of energy generated. This results in a considerable sum of money. Surely energy efficiency measures, which save kilowatts of electricity, should also receive compensation, directed as incentives for consumers. This could be a significant step in encouraging more households to invest in energy efficiency upgrades.
Undoubtedly, the UK’s energy efficiency sector faces challenges. But there is also an opportunity to correct things. Accessible policies, green mortgages, and equitable compensation for the industry aligned with renewable energy producers are all part of the solution to drive a transformative shift in the industry. This is all in the name of benefitting both consumers and the environment.

Nic Gillanders is CEO at South Coast Insulation Services (SCIS)