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A new report from Frontier Economics outlines a raft of practicable and fully costed energy efficiency policies which could be trialled and implemented in order to dramatically decarbonise UK buildings.

The report focuses on the goal of raising all UK homes to a minimum level C EPC rating by 2035 – a level from which about 19 million properties (71%) currently fall short.

Over the past few years, the UK government has taken a hatchet to a lot of the policy designed to encourage energy efficiency and reduce the carbon emissions from heating. These include, the Warm Front, the Green Deal, and the Zero Carbon Homes policies, the last of which, following extensive development, was cancelled before even coming into practice. With no replacement policy forthcoming, it is widely observed that current policy leaves the UK a long way from its carbon targets.

Energy efficiency improvements include enhancing wall or loft insulation in a property as well as installing more efficient appliances, such as ground source heat pumps and air source heat pumps instead of boilers for heating. Considering that heating space and water constitutes about half of the UK’s energy use (DECC, 2013), this would substantially reduce energy demand in the UK.

Among the suggested policies are means-tested retrofits to improve energy efficiency: fully-subsidised for low income households, 50% for council and housing association homes and 33% discount for private properties let to low-income tenants. Loans with below-market rates of interest could also be deployed to encourage those ‘able to pay’ to also take advantage of the improvements, and resulting energy savings and lower bills.

The report further suggests tying Stamp Duty to the EPC rating of a property to encourage the implementation of energy efficiency measures; this policy would also be revenue neutral. It is also proposed that the government reintroduce the Zero Carbon Homes target abandoned in 2015; as found by Zero Carbon Hub this would tighten regulations on new-build properties and enhance energy efficiency. This would remove the need for later retrofits on recently-built houses.

Overall, the proposed programme would cost £1.7 billion per year up to 2030 (about £63 per household). Another study released this month, from the UK Energy Research Council, suggested that energy efficiency measures could save households £270 per year on energy bills. This suggests that the public spending would be far outweighed by the resulting financial benefit to households.

This guest blog was written by Calum Harvey-Scholes


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