Read the Energy Bill Revolution report: Building the Future – The economic and fiscal impacts of making homes energy efficient
High energy bills are causing considerable financial hardship in the UK, drug with millions of people living in fuel poverty. One of the biggest causes of the fuel poverty crisis is the poor condition of the UK housing stock, search which is one of the least energy efficient in Western Europe.
Improving the energy efficiency of UK homes is an effective way to bring down energy bills and offers a long term solution to fuel poverty. In addition it is important to carbon emissions reductions, treatment with buildings responsible for almost 37% of all UK carbon emissions.
At the same time, the building insulation market contracted by 22% in 2013, as the installation of cavity wall insulation fell by 46%, the installation of loft insulation fell by more than 87%, and the installation of solid wall insulation fell by 30%, compared with the number of measures installed under the Carbon Emissions Reduction Target (CERT) in 2012. The Energy Bill Revolution is calling for a radical new approach to home energy efficiency. They are calling for all low income homes to be given measures by 2025 to bring them up to Band C on an Energy Performance Certificate (EPC) and for all other households to be offered 0% interest loans to improve them to an equivalent EPC standard by 2035, delivered as part of a major infrastructure investment programme.
This report has undertaken detailed modelling to assess the economic, fiscal and environmental impacts of this programme. It concludes that the economic case for making energy efficiency of the UK housing stock a national infrastructure priority is strong.
In addition to making all low income households highly energy efficient, reducing the level of fuel poverty, the modelling has established that this energy efficiency programme would deliver:
- £3.20 returned through increased GDP per £1 invested by government
- 0.6% relative GDP improvement by 2030, increasing annual GDP in that year by £13.9bn
- £1.25 in tax revenues per £1 of government investment, through increased economic activity, such that the scheme has paid for itself by 2024 and generates net revenue for government thereafter
- 2.27 : 1 cost benefit ratio (Value for Money), which would classify this as a “High” Value for Money infrastructure programme
- Increased employment by up to 108,000 net jobs per annum over the period 2020-2030, mostly in the service and construction sectors. These jobs would be spread across every region and constituency of the UK.
- 23.6MtCO2 reductions per annum by 2030, after accounting for rebound effects. This is roughly equivalent to cutting the CO2 emissions of the UK transport fleet by one third.
- Improved health and reduced healthcare expenditure, due to warmer and more comfortable homes, and improved air quality. For every £1 spent on reducing fuel poverty, a return of 42 pence is expected in NHS savings.
- A more resilient economy, less at risk of shocks in gas prices, as the economy becomes less reliant on fossil fuels. Investment in energy efficiency in the domestic sector will result in a 26% reduction in imports of natural gas in 2030, worth £2.7bn in that year.