Surrounded by a multitude of Christmas lights, it’s perhaps easy to forget Chancellor Jeremy Hunt’s announcement that Britain needs to cut energy usage by 15% by 2030 to help reduce bills.
The aspiration appears to have replaced the previously well-quoted metric of a 50% reduction in CO2 by 2030 which, by directing the public conversation towards energy consumption rather than carbon, might sound more achievable for businesses and consumers.
Whatever the government’s motives, it’s going to take a comprehensive and long-term national energy efficiency plan to bring about these reductions – and some swift policy announcements. Residential landlords and households need to know where they stand and where to spend their money, while a clear plan is also vital for the supply chain and the myriad of contractors and producers needed to lay the foundations for a robust mass retrofit market. It’s looking promising as the new Eco Plus scheme due to launch next April – an extension of the existing Energy Company Obligation – promises a £1 billion pot for hundreds of thousands of the worst performing homes in the lower council tax bands to fund home improvements. They’ll be able to receive up to £1,500 to install insulation that should lower their energy bills, with funding administered by energy suppliers.
Although welcome, there are no still grants for the millions of homes that don’t meet those criteria. If the Chancellor is serious in his desire to come anywhere near to meeting the targets, we’ll need some more retrofit-related grants – and soon. Of course, public funding only goes so far, and private firms and individuals will need to make up the shortfall. The Energy Efficiency Infrastructure Group suggests an energy saving stamp duty incentive which would use an EPC on which to base the amount of stamp duty to be paid depending on the property’s calculated energy demand. Low energy improvements made within two years or purchase, validated by an updated EPC, would trigger a rebate – as if the home had been improved before purchase. For lower value homes, the government could enhance the rebate to subsidise improvement works. Meanwhile, the Green Finance Institute backs a salary sacrifice scheme as a way to help build green economies, and bring down technology and installation costs. Like the Ride to Work scheme, employees would draw a loan through their company to invest in home energy improvements and repay it via gross salary contributions.
Another interesting new idea comes from The Economy 2030 Inquiry. The think-tank believes that simply basing hand-outs for funding wall insulation on means-tested benefits misses out too many poorer households, while using council tax bands includes too many richer ones. Instead, it suggests basing a model on the social care financial assessment to means-test assets and income which would share costs equitably between households and the state. It estimates that if the assets limit was set at £250,000, 52% of owner-occupied households would need to insulate their homes entirely at private cost.
It might be a workable plan – but carrots are simply no longer enough. It’s time for the government to bring in a stick, especially as there’s still no confirmed date for proposed changes to minimum EPC standards for privately rented properties, leaving landlords in the lurch. Whitehall needs to announce a formal deadline to ensure that everyone is working towards the same goal, otherwise there’s a danger that many fed-up investors will just sit on the fence – and when the announcement finally comes, it will be a complete bunfight, incredibly hard to get contractors, and product costs will be astronomical. Despite the lack of a confirmed date, I’m advising clients that they should assume the regulations will come in soon and to take action as soon as possible.
The sector’s accreditation schemes also continue to be vocal about rethinking energy assessments by making EPCs reflect what property owners are actually looking for. In the way that we have detailed information about calories and saturated fat on food packets to let people make informed decisions, householders and landlords need information about how to decarbonise the built environment based on EPC findings. The schemes also want a stronger voice to raise awareness of environmental and societal challenges, and the recent merger of Stroma Certification and Elmhurst Energy should help to do that.
It’s a good start but I’ve come to think it might benefit the energy assessment sector if there was only one accreditation scheme instead of six. It’s currently not always clear what you get under each scheme, and they can sometimes give conflicting advice to assessors. Only members and fellows of the RICS are allowed to call themselves ‘chartered’ surveyors – why couldn’t an all-encompassing accreditation scheme do the same for energy assessors? As long as any professional body provides good after-sales service, technical support and clarity to assessors it can only help to simplify and strengthen our sector.
At Murton & Co, we’re always thinking about ways to grow and improve and the result is our new Retrofit app, launching next year. It will help homeowners identify, understand and prioritise which energy saving measures to implement, while we’ll also be starting our very own retrofit journey at the Murton household. Here’s to a warm, comfortable and environmentally friendly 2023!