In May 2019, the United Kingdom became the first country to declare a climate emergency. The Prime Minister, Theresa May enshrined into law the target of hitting net-zero carbon emissions by 2050.
Since then, we have seen a flurry of new programmes, including Boris Johnson’s ’10 Point Plan’ and a promise of a levelling up agenda to ‘Build back better’ following the economic crisis brought about by Covid-19.
Long term investment allocated for renewable energy infrastructure, innovation portfolios, sustainable finance hubs and carbon capture technology are necessary.
But what about investments into helping homes transition from fossil fuel heating systems to efficient electricity supply? Creating climate resilient housing throughs structural changes and retrofitting will be imperative to catalyse the ‘green revolution’. It is especially important at a time when the majority of the population are indeed confined to their homes, and are soon to embrace a hybrid working from home model as the pandemic subsides.
Yet, is the latest narrative about future proofing our country for the climate crisis all talk and no action? The recent failure of the Green Homes Grant and its omission from the 2021 Budget signals a contradiction in the Government’s green rhetoric.
This article explores the UK’s prolific problem with fuel poverty in relation to recent policy developments with the Green Homes Grant. Alongside solutions to address fuel poverty, it includes an edit of simple measures that can help you move towards net zero at home.
What is fuel poverty and the fuel poverty gap?
As defined by the Department for Energy and Climate Change in 2013, a household is said to be in fuel poverty if they have required fuel costs that are above average and if they were to pay these costs, would be left with residual income below the poverty line.
Prior to this new definition set out in ‘A framework for future action’, a household was considered to be in fuel poverty when it needed to spend over 10% of its income on energy and fuel.
The fuel poverty gap is depicted by how much more money people would need to earn on top of their current income to remove themselves from fuel poverty. In 2018, it was estimated that the average fuel poverty gap was £334 per annum, an increase from £328 in 2017, suggesting costs are increasing slightly in line with inflation.
What are the causes of fuel poverty?
There are 3 main characteristics that can influence a household’s fuel poverty status which are:
Energy efficiency
OVO defines energy efficiency as the least energy needed to perform an action in the home, like heating or using electricity. Energy efficient homes are more economically and environmentally sound. Thermal and electrical inefficiencies reflect poor quality housing and wasted energy.
Incomes
The earnings and annual income of a household can impact a person’s position related to fuel poverty. The latest ONS data states that the median household disposable income in the UK for 2019 was £29,600. Importantly, it recorded that income for the poorest fifth of people fell by 4.3% per year over the two years leading up to 2019, signalling that the country’s poorest have less disposable income to spend on heating and electricity.
Energy prices
Higher energy prices and monthly bills can push households into fuel poverty. Prices are not uniform across the country and people pay different amounts depending on their tariffs. Often, the most economical tariffs and best deals are only available to card holders with direct debit payment abilities. It is commonly found that the lowest income households, are excluded and locked out from the best deals.
Energy prices vary across the UK depending on how much time the inhabitants spend at home. Prior to the pandemic, these would have been higher for pensioners and disabled people. However, this is now applicable across the board as households have succumb to working from home in the aftermath of the pandemic. In September 2020, it was estimated that household energy bills could soar by an increase of £107 per household during the winter months of October to March.
What are the levels of fuel poverty in the UK?
Earlier in March, the Department for Business, Energy & Industrial Strategy (BEIS) released its 2021 report which uses data from 2019 on fuel poverty. Their findings state an estimated 13.4% of households (3.18 million) were in fuel poverty in England in 2019.
The same report in 2019, using data from 2017, stated that the proportion of households in England in fuel poverty was estimated to be 10.9%.
The steady rise in fuel poverty within the UK is alarming. Its existence represents a danger and damage to human health. According to National Energy Action, an estimated 12,000 people die each year from health conditions arising or worsening from having a cold home. Over the last year, we have heard at length about burdening the NHS, so shouldn’t alleviating fuel poverty be a priority?
In fact, Britain is found to have some of the ‘leakiest’ homes in Europe. Not the kind of accolade aligned to a nation that has declared a climate emergency, prides itself on its net zero ambitions and is soon to host COP26. End Fuel Poverty have shared that the UK ranks an abysmal 14 / 16 on fuel poverty in Western Europe. We are also situated at the bottom of the table for the proportion of people who cannot afford to heat their home to an adequate temperature.
Recent events like the Texas Big Freeze with power black outs and water shortages should serve as another wake-up call. It has highlighted the need for grid modernisation and should prompt the country’s leaders to support the climate proofing our homes and mitigate current energy inefficiencies.
What is the Green Homes Grant? What does its failure mean for fuel poverty?
Better insulation, solar panels and electricity heat pumps are all sound solutions to make homes more climate resilient and energy efficient. However, this retrofitting comes at a cost.
That’s why the Government introduced the Green Homes Grant Scheme for 2020/21. This programme was designed to provide financial help for homeowners and landlords to make green improvements such as loft, wall and floor insulation and transition from a fossil fuel heating system to renewable energy. Initially £1.5 billion was allocated with an additional £500 million granted for local authorities to fuel further uptake. The goal was to help 600,000 households renovate their homes to become less carbon intensive in the form of a voucher for £5000 and £10,000 to pay installers for these green improvements.
Whilst in theory, the programme had legs, in reality the Green Homes Grant has become a funding flop. In alarming research issued by the Environmental Audit Select Committee, it was revealed that only 6.3% of the £1.5 billion allocated had been spent, with 86% of respondents from a recent survey citing poor experience with the process.
The gap between ambitions and actual impact has been caused by levels of Government bureaucracy that have slowed the payments of installers via the voucher schemes. It is cited that tens of thousands of pounds are owed to installers who have waited up to four months before being paid. These delays have severely impacted their cashflow, and rightly, justify a hesitancy to participate in the scheme. This also signifies a missed opportunity for leaders to help workers transition into ‘green jobs’ which embrace sustainable energy and home solutions. The report by the Select Committee projects that at its current rate, it would take another 10 years to meet the initial 600,000 household target. As we progress throughout the climate decade, it’s hard to rationalise or defend the deficiencies in the scheme and has rightly prompted an outcry from environmental campaigners.
What’s more, the recent omission of the Green Homes Grant from the March 2021 Budget is troubling. The government have now decided to pull the bulk of the funding, with the Budget document making no reference to energy efficiency in buildings whatsoever. Read a summary of the 2021 budget via edie.
Elsewhere, other stakeholder groups such as the Green Finance Institute (GFI) have secured backing from climate charity Laudes Foundation to help develop funding mechanisms for home energy efficiency measures and low carbon heating, in a bid to remedy the current situation. Radical collaboration is of course salient to equip households with the tools against climate, but should it really fall to charities and NGO’s to lead the charge?
Without subsidies and effective schemes in place to accelerate the transition of net zero in the home, is the government promise of ‘green growth’ just lip service?
How to decarbonise your home
There are a number of simple ways to help you achieve net zero at home in particular, focusing on insulation, ventilation and electricity generation.
- Install a heat pump. Instead of a gas boiler, a heat pump is a sustainable alternative which gains natural energy from the ground, air, water and environment to pass it on throughout the house. It works in the opposite way to a refrigerator and is emissions free.
- Stop the leaks with better insulation. Identify all the gaps and holes in your house, this could be everything from windows to holes in the walls, gaps underneath doors and in the roofs.
- Investigate renewable energy solutions such as solar panels.
- Consider installing ceiling fans for ventilation.
- Let there be LED lights.
- Invest in energy efficient appliances.
- Adopt an energy saving mindset.
- Install a Smart Meter via providers such as Octopus Energy.
Read more on energy saving tips here.
Final thoughts
How can we best remedy fuel poverty and simultaneously aid households to make the switch to sustainable electricity and energy systems? A clear legislative road map, with incremental targets is essential to achieve this.
The UK’s recent ‘Right to repair’ law is an example of how policy makers, when they put their mind to it, can encourage sustainable consumption patterns and push manufacturers to make higher quality, more durable products.
Government financial incentives, such as subsidies would prove to be a powerful tool to act as a catalyst in the switch over to renewable electricity systems that use heat pumps and embrace vehicle to grid electricity generation technologies.
Alternative suggestions also include linking stamp duty to energy performance in order to encourage home owners to invest in energy efficient solutions before selling their homes.
Conducting a black box analysis of the failure of the Green Homes Grant can provide learnings for leaders into how to enforce efficient programmes that encourage green jobs and simultaneously climate proof Britain’s homes.
A genuine ‘levelling up’ agenda requires the urgent addressing of fuel poverty and unlocking millions of homes from their fossil fuel dependencies.
To learn more about decarbonising our homes listen to the ‘Net Zero In The House’ episode of Radio 4’s The Bottom Line.
Do you feel passionately about this? Head to the End Fuel Poverty Coalition for more.
If you enjoyed this article, read more about embodied carbon in buildings here.
You can also learn about how to switch to renewable energy in this blog.
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