Public messaging on energy could save households up to £400 a year

A German-style national drive to reduce UK energy use by turning off lights and lowering heating temperatures could save households £400 and save the Treasury £9 billion, according to new analysis from the Social Market Foundation.

The cross-party think-tank is calling on the government to follow Germany’s lead and launch an information campaign that provides practical tips on reducing household energy demand.

In Germany, a national energy-saving campaign has seen lights turned off in some public buildings, heating turned down and households encouraged to minimise energy use. Since the campaign was launched in September, Germany’s gas consumption has been between 20% and 37% lower than at similar times in earlier years.

The Foundation has calculated that replicating such reductions in energy use in Britain could deliver household savings of between £250-£400 a year.

Public finances could also benefit from a nationwide reduction in energy use, since the Energy Price Guarantee policy currently means that taxpayers subsidise every unit of energy used in the UK. The Treasury could save up to £9.3bn on the price guarantee policy if British energy demand fell as much as Germany’s, the SMF estimated. That saving could reduce the scale of the spending cuts and tax rises the Treasury is preparing to announce at the Autumn Statement later this month.

The German energy saving campaign is based on providing easy options to consumers already looking to reduce demand of their own accord, and strong encouragement from national leaders to save energy. The government’s package of energy-saving measures includes “offering practical tips, suggestions, and examples to make saving energy as easy as possible”, and it has thus far refrained from imposing policies that force households to further reduce consumption.

The SMF said ministers should look to emulate the German programme as soon as possible and has produced estimates of what could be saved in this country by calculating the impact of both 20% and 30% demand reductions, as observed in Germany, on household finances. It found that if consumption were to fall by 20%, the average household would save around £260 across the year. If consumption fell by 30%, it would save just under £400 a year.

Jake Shepherd, senior researcher at Social Market Foundation, said: “In the face of rising energy costs, and despite the Energy Price Guarantee, households are and will continue looking for ways to reduce their demand for energy. The government should give them more practical information on doing so, instead of leaving them in the dark – or worse, making unacceptable trade-offs between heating and eating.”

“Far from ‘nannying’ people, government guidance would empower them – and most importantly, help them save on their energy bills. Reducing energy use would deliver significant savings for the Treasury, potentially reducing the pressure on ministers to find money elsewhere with tax rises and spending cuts.”