4Creating a clear, long term framework for energy efficiency
54.A number of contributors to our inquiry were concerned that there had been a lack of strategic direction and stability with home energy efficiency policy in recent years.146 Peter Broad, Policy Manager at Citizens Advice, told us that “we don’t have a strong vision from Government about where we want to go with energy efficiency and what we want people to do in the long term”.147 We also heard that it was vital that DECC acts with a “sense of renewed momentum”148 and demonstrates commitment to setting and maintaining a steady direction on home energy efficiency with long-term delivery ambitions.149 This long-term certainty is crucial if consumers, landlords and industry are to engage with and invest in home energy efficiency.150 Our Investor confidence into the UK energy sector inquiry also highlighted the need for the Government to provide a strategy which set out a clear pathway to meeting its long-term objectives.151
55.We have heard about the three broad approaches to tackling energy efficiency which have been utilised in recent years: the use of regulations; the use of supplier obligations; and the use of subsidies, such as loans and grants. In the last chapter, we discussed the future of the supplier obligation, which appears to be DECC’s current policy focus in the area of energy efficiency. In this chapter, we set out our views on other initiatives we believe are required in order to provide a clear, durable and long-term framework for energy efficiency.
56.The key areas are:
a)Stimulating the ‘able-to-pay’ market by:
i)re-introducing attractive finance options,
ii)driving demand through incentives, and iii) communicating the broader benefits of energy efficiency;
b)Enabling locally-led delivery;
c)Encouraging the use of technology to reduce energy demand;
d)Making energy efficiency a cross-Government priority;
e)Developing robust regulations for new homes.
Stimulating the ‘able-to-pay’ market
57.Now that funding for the Green Deal has ended there is effectively no Government support to help ‘able-to-pay’ households engage and invest in energy efficiency measures. However, we have been told that having a scheme aimed at ‘able-to-pay’ households is a “vital part of the solution to inefficient homes”152 and that therefore a new scheme and assistance for these households must be considered and developed going forward.153
Lord Bourne told us that “the No. 1 priority in the home energy area at the moment [ … ] is getting ECO right and tackling the fuel poverty issue”. He added: “That doesn’t mean [other work on energy efficiency] is not happening, but it is happening more slowly. I don’t want to mislead you by suggesting that we’ve done masses of work on this at the moment”.154
58.It is crucial that the Department renews its efforts to drive demand for energy efficiency for the ‘able-to-pay’ in this Parliament. It is disappointing that DECC is not prioritising addressing this issue, especially after the failure and subsequent ending of the Green Deal and given that the shortcomings of this scheme have been known for a long time. We set out below the action we believe the Department must now take to encourage and drive demand for energy efficiency in ‘able-to-pay’ households.
59.In order to stimulate the ‘able-to-pay’ market, we heard that three main issues had to be addressed to drive demand. First, financing options must be re-introduced to help households make energy efficiency improvements.155 Second, long-term incentives must be developed and be at the forefront of any future approach for the ‘able-to-pay’ market.156 Third, there must be a refreshed approach to the way in which the benefits of improved household energy efficiency are communicated to consumers.157
Re-introducing attractive financing options
60.Despite the shortcomings of the Green Deal, the scheme did establish a mechanism which presented consumers with a “reasonably good” way of financing energy efficiency measures in their properties.158 Simon Roberts, Chief Executive of the Centre for Sustainable Energy, told us that the ‘pay-as-you-save’ model was a “key component that was [previously] missing as a tool in the market”,159 and Phillip Sellwood, Chief Executive of Energy Saving Trust, added that the introduction of the financing model had enabled consumers, who wanted to do something, to take substantial steps in improving their household’s energy efficiency.160 We heard that the concept itself was “simple and robust”161 but that ultimately the scheme had suffered from “poor implementation”.162
61.We were told that the mechanisms and infrastructure that had enabled pay-as-you-save-based lending remained in place and could potentially be brought back into action in any future attempts to drive home energy efficiency for the ‘able-to-pay’.163 Mark Bayley, former Chief Executive of the GDFC, explained that:
We have set up the infrastructure for lending on a pay-as-you-save basis. That infrastructure will be fully funded for many years, funded by the book of £50 million-worth of Green Deal finance plans, so in that sense we have achieved something of lasting benefit, because as a default record of that book becomes established, in principle it can be reactivated with private sector funding and, very importantly, can contribute towards home energy efficiency.164
DECC added that:
The Government has made it clear that it will maintain the underlying systems of the Green Deal, at least for now, as the Company holds discussions with potential private-sector investors. These systems remain available both to the GDFC and to any other company wishing to use them to provide pay as you save finance to consumers. We will keep this position under review in light of interest in use of the systems from GDFC or other companies.165
62.The reintroduction of financial enablers is particularly important for landlords, who will be compelled by law to have a minimum energy efficiency standard (MEES) by April 2018 (see para 12).166 Without the Green Deal, landlords currently have little financial assistance available to help achieve this.167 The Association for Conservation of Energy explained:
The introduction of minimum efficiency standards for the Private Rented Sector was based on the assumption that the Green Deal would offer a finance mechanism for landlords, thus ensuring that the required improvements could be delivered without upfront cost: the withdrawal of Government support for the Green Deal Finance Company has now put this mechanism at risk and hence also the effectiveness of the minimum efficiency standard itself.168
The Residential Landlords Association added:
Notwithstanding the introduction of compulsion from April 2018 onwards the Government has systematically abandoned support for the PRS. The Green Deal has effectively ended and ECO is either non-existent or rationed with an uncertain future. ECO is meant to be a key enabler for the Affordable Warmth Group including tenants in receipt of various benefits, who are the most likely to be in fuel poverty. Energy suppliers have already spent much of the ECO money with limited results for the PRS. Minimum standards were predicated on the availability of both Green Deal funding and ECO. This demonstrates the mess currently surrounding Government policy.169
63.Lord Bourne suggested that the Department would probably look into what kind of assistance would be available to landlords in the absence of the GDFC. He said: “I think we have to look at how we ensure that that obligation [MEES] remains effective and how it is abided by [ … ] We need to ensure that landlords have the means of delivering on that particular obligation.170
64.The establishment of the infrastructure behind pay-as-you-save based lending is an important legacy of the Green Deal. This infrastructure could play an important role in facilitating future energy efficiency measures in the ‘able-to-pay’ market. We recommend that the Government carries out an assessment of the value of reinstating a pay-as-you-save mechanism based on the GDFC infrastructure.
65.DECC must specifically detail what assistance and tools will be available to landlords, some of whom will have to make considerable and costly improvements to their properties in order to comply with the minimum energy efficiency standards (MEES) to be introduced in April 2018.
Driving demand through incentives
66.We were told that having a financing mechanism alone would not be enough to drive consumer demand for energy efficiency measures and additional incentives were needed to drive this demand.171 Witnesses called for Government to take steps to create “the right environment for engaging consumers and driving demand”172 for energy efficiency amongst ‘able-to-pay’ households. It was suggested that mechanisms such as the adjustment of stamp duty or of the council tax rate of a household according to its energy efficiency standards might be a useful approach.173 Our predecessors were also interested in these ideas. They said in 2014 that stamp duty discounts or variable council tax rates “could encourage more homeowners and households to improve the energy efficiency ratings of their properties” and urged DECC and the Treasury to consider them.174 The Department did not directly respond to this particular recommendation.175 Witnesses to this inquiry have reiterated that such measures would provide a long-term indicator from Government that it believed energy efficiency to be an important issue worth investing in.176 Philip Sellwood, from the Energy Saving Trust, explained that:
There is a pretty good track record over the last 10 or 12 years of research, which is around incentives for council tax, stamp duty and other fiscal measures, most of which have proved to be fiscally neutral and have been very powerful [ … ] Those are things that have been proved to be effective.177
67.Lord Bourne indicated that the Department was now looking into using varied rates of council tax and stamp duty as potential ways to encourage households to improve their energy efficiency. He said:
In terms of looking at the possible future landscape and possible incentives and so on, it is something on which we are surveying opinion to see what is the nudge that is needed, because the Green Deal did not work. What nudge is needed? Is it in terms of an incentive against taxes that are not necessarily terribly popular, like stamp duty or council tax, or is there some other way we could move forward? [ … ] We are looking [ … ] at stamp duty and council tax as possible levers, but it will take some time.178
68.We welcome the fact that the Department is looking into using varied stamp duty and council tax rates as levers to incentivise households to undertake energy efficiency improvements. We urge the Department to work with the Treasury to develop straightforward policy options and publish an impact assessment of these options. Complex policies must not get in the way of delivering energy efficiency objectives. The Government must ensure that support mechanisms are in place to ensure that vulnerable households and fuel-poor consumers are not negatively impacted from the introduction of such incentives.
Communicating the broader benefits of energy efficiency
69.There are multiple reasons that drive households to make the decision to invest in energy efficiency. The failure of the Green Deal to recognise the factors beyond financial savings was one of the key reasons behind its inability to drive demand.179 The way in which the Green Deal was communicated and marketed to consumers did not encourage households “who were not already considering installing energy efficiency measures to do so”.180 We were repeatedly told that improved comfort was one of the key drivers of energy efficiency improvement.181 Joanne Wade, Director of the Association for Conservation of Energy, explained that, while reducing carbon emissions and lower energy bills are important to some, the reason to make energy efficiency improvements for a majority was to have “a nicer home to live in”.182 RWE npower agreed that consumers “attach more value to personal comfort and their health” than what they called the “more abstract ideas of reducing carbon or ‘being green’”.183 AgeUK explained that the marketing focus on the financial aspects of the Green Deal meant that other important messages were missed:
The Green Deal [ … ] was marketed as a financial proposition, and seen as boring and disruptive. This approach did not reflect the multiple factors that motivate people, such as health and comfort. Nor did it differentiate its marketing to people in difference circumstances.184
70.We also heard from Public Health England that there are other important household benefits to improved energy efficiency, including wider societal benefits like “mental well-being, reduced contacts with the health service and [reduced] absence from school or work”, were important drivers.185 These benefits are hard to quantify and it is possible that spending on energy efficiency results in savings in other Government departments which benefit both citizens and the state. Dr Jan Rosenow summarised that, in order to appeal to a wider range of consumers, a new approach to communication should focus on some of these other benefits of energy efficiency:
The focus that we had [ … ] with the Green Deal on the financial proposition - ‘you can save lots of money’ - is limited. You are limiting yourself to a very small segment of consumers, so I believe refocusing the engagement process more towards comfort, quality of life and the value of your property would be much more effective than just focusing on the financial gains.186
71.We were also told that, as well as focusing on improving the content of the message being communicated to consumers, it was important to address who was delivering the message to households and when this message is delivered. Dr Eyre, Director of UK Energy Research Centre, said:
What is critical is getting the right message at the right time [ … ] you need the right message at the point of sale. You need the right message at the key point of intervention and you need more than just messages. You need practical, pragmatic advice.187
Citizens Advice suggested that engagement with consumers on home energy efficiency is better done by organisations who are close to the customer, which can include both commercial organisations and those delivering “front-line” services.188 Simon Roberts, CEO of Centre for Sustainable Energy, said that the people suited to carrying the message about energy efficiency are individuals or groups who have an “energy-related interest in how [people] are living [their] life”, such as health professionals, people fixing a household’s boiler or builders renovating homes.189
72.When asked what the Government was doing to ensure that the messaging of future energy efficiency programmes went beyond value-for-money criteria, Lord Bourne claimed that “we are on to that, and we certainly recognise as a Department that it is not just about financial incentive. Comfort clearly applies across the board, whatever the nature of the tenure—whether it is owned or rented”.190
73.Various stakeholders also explained the idea of communicating the benefits of energy efficiency to households through “roadmaps”, showing consumers exactly what steps they can take to improve their energy efficiency and reduce demand.191 We were told that this could help home owners realise the energy efficiency opportunities for their household.192 Joanne Wade, from the Association for the Conservation of Energy, said:
What we would prefer to see is something like a renovation road map given to people [ … ] The road map says, “Here is how you gradually renovate your whole building. If you are having your roof repaired think about doing this. If you are replacing your boiler do not forget to get your control system right”. It takes the householder through quite visually the journey they could take with their home rather than just going, “Here is a list”. I think that would be much more effective in communicating and enabling householders to do this.193
74.There are multiple benefits to improving home energy efficiency. However, these benefits have not been clearly communicated to households, which is a principal reason behind the failure of previous schemes to drive demand. We welcome that the Department recognises that making home energy efficiency improvements is not simply driven by financial incentives.
75.DECC should bring together health services, charities, housing developers, supply chain representatives, industry groups and consumers to form a group to consult with and determine the most effective way to communicate the benefits of energy efficiency to ‘able-to-pay’ households. The Department should also commission, and publish, research to help it understand behaviour change in energy efficiency and demand reduction. This will help to identify how to use the right message at the right points of intervention. We also recommend that the Department works with industry to develop and publicise ‘roadmaps’ which set out and make clear what steps individual households can take to improve their energy efficiency.
Enabling locally-led delivery
76.Many stakeholders called for locally-led delivery to be a central part of the Department’s future strategic direction for energy efficiency policy.194 We heard that local authorities were best placed to deliver energy efficiency schemes because of their knowledge and understanding of local areas.195 Councillor Peter Fleming, member of the Local Government Association Environment, Economy, Housing and Transport Board, said:
Councils are probably best placed to tackle fuel poverty [ … ] and increase the energy efficiency of homes. Councils understand their communities probably better than anybody else and, therefore, are best placed to be right at the forefront of these changes.196
The Renewable Energy Association added that:
While central government energy efficiency policies have been scrapped or amended, Local Authorities have been well placed to understand their own building demands and work with local contractors to deliver cost effective solutions for energy efficient buildings.197
77.Local approaches could be particularly useful in providing assistance to vulnerable households in rural and remote island communities. A report by Citizens Advice said that “using local networks” to promote energy efficiency services is “particularly important in rural [ … ] areas”.198 Holly Jago, Corporate Affairs Manager at Calor Gas, explained to us that there are a considerable number of organisations that work in rural areas who could be funded to work “in partnership” with local councils in order to better deliver energy efficiency to rural homes.199
78.Witnesses also suggested that area-based schemes could greatly improve the delivery of energy efficiency improvements.200 Dr Jan Rosenow, from the University of Sussex, added that:
The whole approach of identifying someone at the doorstep and having to fill in some paperwork is wrong. It would be better to have something like an area-based scheme, where your local authorities can play a much larger role and just say, “This area has a high degree of fuel poverty” and everybody who lives in that area can benefit from a programme. You avoid that whole stigma of going round people’s houses and asking them, “Are you on benefits? Are you poor? Are you deserving?” That is the wrong approach, and there is lots of evidence that suggest that is not the most effective way of identifying people in fuel poverty.201
79.Witnesses suggested to us that the Government should draw lessons from the local area-based approach of the Home Energy Efficiency Programme (HEEPS) in Scotland.202 We were told that this scheme provided funding for local authorities to “deliver in the most appropriate way for their housing stock”.203 This helped to allow for a true area based approach which fostered strong relationships between local authorities and communities and delivered a more integrated policy than in England.204 The consumer organisation Which? said that HEEPS addressed the lack of trust consumers have had for past schemes.205 They added:
The use of a scheme like [HEEPS] capitalises on consumers’ needs for a simple, hassle free solution. The area-based approach can, if done well, deliver a smoother and quicker customer journey, avoiding the dissatisfaction that can arise when surveys and installations take longer than expected. It also effectively addresses the needs of all consumers, from those in areas of the highest fuel poverty, to the able to pay.206
80.Simon Roberts, Chief Executive of the Centre for Sustainable Energy, explained that a national framework was needed to allow potential locally-led delivery to take place.207 Dave Sowden, from the Sustainable Energy Association, added that “the most important thing [was] to get the national framework right so that local authorities can play their role as a partner”.208 Joanne Wade, Director of the Association for Conservation of Energy, told us that local authorities needed a “long-term guarantee” to develop their capabilities in delivering home energy efficiency.209 One idea is that the Government should encourage local authorities to designate specific zones to focus on delivering energy efficiency to households.210 A Citizens Advice report into local energy efficiency explained how “warm zones” worked. It said that to engage hard-to-reach households and households in remote or deprived areas:
Zones use a concerted partnership approach, building links and referral mechanisms with local agencies over time. They find ‘gap funding’ to assist fuel poor and vulnerable homes that are missing out under the ECO.211
One example of good practice that we were made aware of was the ‘Kirklees Warm Zone’, which offered free loft and cavity wall insulation to every eligible household in the designated zone. An assessment of this initiative concluded that this sort of programme was very worthwhile.212
81.However, stakeholders also raised concerns about the capability and capacity of local authorities to deliver energy efficiency programmes.213 We were warned that, whilst some authorities would have the capacity to deliver, this might not be the case for all local councils, some of which do not have the resources or staff to deliver and could therefore struggle. 214 We were also told that it was crucial that data was shared with local authorities so that they could effectively target and deliver programmes to homes in need.215
82.Lord Bourne told us that DECC recognised the benefits of locally-led delivery:
Almost inevitably local delivery is more effective; it’s trusted, it has the local knowledge and it can react more quickly. We are certainly encouraging the energy companies to speak to local authorities and others to ensure that the action they take in a particular locality is appropriate.216
83.Locally-led and area-based approaches have the potential to greatly improve the delivery of energy efficiency policies if these are well planned and sufficiently resourced.
84.We recommend that the Department develops a national framework to facilitate and support locally-led delivery of energy efficiency. Within this framework, the Government should set out good practise and a guide to different ways in which local authorities can work in partnership with other key players (charities, health services, energy suppliers and other relevant organisations) to deliver energy efficiency measures. Examples of good practice include HEEPS in Scotland and the use of ‘warm zones’.
Encouraging the use of technology to reduce energy demand
85.Many stakeholders have highlighted the potential for the roll-out of smart meters, as well as the use of other technologies, to help households reduce their energy demand and improve efficiency.217 We were told that the roll-out of smart meters across the UK could provide the “catalyst” for an approach to household energy which rewards efficiency and behaviour change218, and that it was therefore important that energy efficiency is considered alongside the delivery of the meters.219 Additionally, we heard that the smart meter roll-out represented a valuable opportunity for trained installers and suppliers to visit and inform households of the various benefits of energy efficiency.220 The UK Energy Research Centre said:
The proposed [smart meter] roll-out is unique, in that it aims to involve customers in using their meters to understand and manage demand [ … ] Evidence from the first 2-3 years of installations is that this has been broadly effective, with measured reductions of 2.3% in electricity consumption and 1.5% in gas compared with traditionally-metered customers.
Lord Bourne emphasised the importance of the smart meter roll-out:
We should not ignore the impact of smart meters on helping all consumers, businesses as well as families and single-person households, with their energy bills. When this is rolled out, as it will be, they will no longer have estimated bills. All the evidence so far, from the vast majority of households who have smart meters already [ … ] is that bills are coming down. That is good news on fuel poverty and across the piece really, including on carbon footprint. We have to realise that that is an important part of the mix as well.221
Making energy efficiency a cross-Government priority
86.Making energy efficiency a national infrastructure priority would drive demand amongst households, attract investment, create a sustainable and durable long-term policy view that “goes beyond parliamentary cycles”.222 This approach would put energy efficiency much more at the forefront of energy policy making.223 A report by Frontier Economics in 2015 concluded that when compared to infrastructure projects like the first phase of HS2 and the roll-out of smart meters, energy efficiency provided “very comparable monetary benefit”.224 One option would be to give the responsibility for the oversight of energy efficiency policies to the newly established National Infrastructure Commission.225 We were told that this would “free up capital funding” and ensure that delivering the benefits of energy efficiency did not rest solely with DECC.226 We also heard it might help to ensure that policies were not “susceptible to decisions driven by short-term political priorities”.227
87.Lord Bourne told us:
Energy efficiency is certainly a priority for the Government; I am not sure I would necessarily term it infrastructure, but it is certainly a priority. As I have indicated, it was a priority for us going into the election, and it remains a priority now. It informs and helps deliver low-carbon, affordable and secure energy.228
88.In our recent report into Investor confidence in the UK energy sector, we recommended to the Government that the National Infrastructure Commission had an “explicit requirement to consider the infrastructure requirements of meeting the UK’s carbon budgets and long-term legally binding carbon reduction targets”.229
89.We recommended in our recent report on ‘Investor confidence in the UK energy sector’ that the National Infrastructure Commission must consider the infrastructure requirements of meeting the UK’s carbon budgets and long-term legally binding carbon reduction targets. Energy efficiency will be a crucial part of the mix. The Government and the National Infrastructure Commission should assess the potential benefits of designating energy efficiency as a national infrastructure priority.
90.Witnesses discussed the importance and benefits of cross-governmental cooperation for making homes more energy efficient.230 Richard Twinn, Policy Advisor at UK Green Building Council, suggested that energy efficiency “stretches across Treasury, Department of Health, CLG [Department of Communities and Local Government] - not just DECC”.231 RWE npower noted that:
Any future [energy efficiency] schemes [ … ] must be part of a wider governmental strategy to raise awareness of the importance of energy efficiency, and should involve multiple governmental departments; particularly Treasury, Department for Communities and Local Government, the Department of Health and the Department for Work and Pensions in its creation. Complementary reforms across multiple departments would deliver a single, joined up message regarding the importance of improved energy efficiency from the government, and is more likely to create the necessary culture and attitudes that are needed to create a sustainable ‘able-to-pay’ market for energy efficiency measures.232
91.The Secretary of State informed us in January 2016 that there is cross-governmental collaboration in the form of an “inter-ministerial group on Clean Growth”.233 We were told that this group discussed issues relating to de-carbonisation and the carbon budgets, and that meetings were attended by officials from a number of relevant departments.234 We sought further information in an exchange of correspondence and were informed that the group was not a formal Cabinet Committee.235 Given the importance of clean growth, we question why the Inter-Ministerial Group on Clean Growth does not have Cabinet Committee status. We also note that, alongside Cabinet Committees, a number ‘Implementation Taskforces’ have been established to “to monitor and drive delivery on the Government’s most important crosscutting priorities”.236 The Secretary of State told us that the Department would not comment on membership of the group or the frequency and timing of its meetings in order to “protect the integrity of the policy making process”.237
92.The establishment of an ‘inter-ministerial group on clean growth’ to drive cross-departmental collaboration on issues relating to the carbon budgets and de-carbonisation is a positive step by the Government. However, it is unclear to us how the Government’s current position to supress information on the group’s membership and the frequency and timing of its meetings protects the integrity of the policy making process. It is unclear whether energy efficiency is discussed within this group.
93.We recommend that the Inter-Ministerial Group on Clean Growth is re-cast as a formal Cabinet Committee. Its membership must be published. We recommend that the Secretary of State for Energy and Climate Change is Chair and that it should include representatives from the Department of Health, Department of Communities and Local Government, Department of Work and Pensions, Department for Business, Innovation and Skills, Department for Transport, Department of Environment, Food & Rural Affairs and the Treasury.
94.Alongside this, we recommend that the Government sets up an Implementation Taskforce for energy efficiency. We recommend that representatives from the same Departments outlined above are members of this Taskforce, which should also be chaired by the Secretary of State for Energy and Climate Change. The terms of reference for the Taskforce should be: Driving energy efficiency across the UK as part of a wider strategy to tackling the energy trilemma. The Taskforce should publically report, on an annual basis, the Government’s progress towards achieving a step-change in driving energy efficiency across the UK.
Developing robust regulation for new homes
95.In December 2006, the then Government promised that all new homes would be ‘zero carbon’ from 2016. This would require all new homes to mitigate all the carbon emissions produced on-site. In 2014 the then Coalition Government reiterated the commitment to delivering zero carbon homes in 2016. However, as we explained earlier, the zero carbon homes policy has been scrapped. After this decision was made, as many as 246 businesses from the construction, property and renewable energy industries, urged the Chancellor to reconsider.238 Stakeholders emphasised the importance of the policy in this inquiry. Zero Carbon Hub told us that “it is important to see the necessity for strong energy efficiency and low carbon standards for homes within government regulations”.239 Dave Sowden, CEO of the Sustainable Energy Association, told us that the policy brought important benefits to the energy efficiency industry:
We did have a world-leading policy [zero carbon homes]. We implemented the first step of it. That inspired quite a lot of confidence. We had members who invested and built factories on the back of that first move and were then badly let down by the watering down of the subsequent stages.240
96.We were told that the policy should have been considered as an investment, rather than a cost. This is because installing upfront energy efficiency measures in new homes helps to avoid mass-scale and costly retrofits in the future.241 Dave Sowden, Sustainable Energy Association, suggested said that the value of lower energy bills in new homes was not considered in the decision to scrap the policy.242 Simon Roberts, CEO of Centre for Sustainable Energy, said:
The extra cost has been the argument for getting rid of the target. That is because we are thinking about it as a cost rather than as an investment. If we see it as a long-term return of making houses more energy efficient, in terms of its stimulus for the economy, it would be far more positive than the small saving we will get on house builder costs now.243
97.A number of witnesses told us that the Government should reinstate the policy.244 A report by the House of Lords Select Committee on National Policy for the Built Environment recently recommended that the Government should reverse its decision to remove the zero carbon homes policy, and suggested that it sets out and implements a new trajectory towards energy efficiency in new homes.245
98.Lord Bourne explained to us that one of the reasons behind the decision to remove the zero carbon homes policy was to allow more homes to be built.246 He also recognised the importance of Government regulation to encourage energy efficiency in new homes:
We need regulation, specifically on the zero-carbon homes. [The decision to remove the policy] is to give a respite, really, to concentrate on another area of Government activity, which is the need for more building. We may revisit that; we are looking at other measures.247
99.Zero carbon homes was an ambitious policy which was a positive step towards ensuring that all new homes are energy efficient. Whilst we recognise the Government’s desire to stimulate housebuilding, the unexpected decision to end the policy was disappointing to many businesses that were ready to deliver the Government’s original objectives. The decision damaged confidence in the low carbon economy and will lock in the requirement for future wide-scale energy efficiency measures and costly retrofits. We recommend that the Government reinstates the zero carbon homes policy or sets out a similar policy that will ensure that new homes generate no net carbon emissions.
146 Confederation of British Industry (HEE0035), Q22 [Peter Broad], Ricardo Energy & Environment (HEE0033), British Board of Agrement (HEE0039), Association for the Conservation of Energy (HEE0042)
147 Q22 [Peter Broad]
149 Energy Saving Trust (HEE0085), EDF Energy (HEE0069), Q32 [Richard Twinn] Q50 [Councillor Fleming], UCL (HEE0020), Insulated and Render Cladding Association (HEE0026), Ofgem (HEE0036), Confederation of British Industry (HEE0035), Citizens Advice (HEE0080), E.ON (HEE0078), Sustainable Energy Association (HEE0015), Ricardo Energy and Environment (HEE0033), Glazing Supply Chain Group (HEE0046), UKERC (HEE0050), Glass and Glazing Federation (HEE0053), Mears (HEE0068), Certinergy UK Ltd (HEE0006) Age UK (HEE0019)
150 Citizens Advice (HEE0080), Confederation of British Industry (HEE0035), Centre on Innovation and Energy Demand, SPRU, University of Sussex (HEE0012)
151 Energy and Climate Change Committee, Third Report of Session 2015–16, Investor Confidence in the UK energy sector, HC 542
153 Confederation of British Industry (HEE0035), British Gas (HEE0041), Community Energy Plus (HEE0045), Rockwool UK (HEE0048), Mineral Wool Insulation Manufacturers Association (HEE0055), RWE npower (HEE0063), EDF Energy (HEE0069), Q9 [Peter Smith]
154 Q250 [Lord Bourne]
155 Confederation of British Industry (HEE0035), Tyndall Centre for Climate Change Research (HEE0037), British Board of Agrement (HEE0039), Country Land and Business Association (HEE0051), Mineral Wool Insulation Manufacturers Association (HEE0055), Renewable Energy Association (HEE0059)
156 Confederation of British Industry (HEE0035), UKGBC (HEE0087) Q70 [Lawrence Slade], Q42 [Peter Smith], Q12 [Peter Selwood], Saint-Gobain (HEE0076)
157 Q177 [Dr Rosenow], Q140 [Dr Eyre], RWE npower (HEE0063), Citizens Advice (HEE0080), Q177 [Simon Roberts]
158 Q9 [Philip Sellwood]
159 Q144 [Simon Roberts]
160 Q9 [Philip Sellwood]
163 Q90 [Mark Bayley]
164 Q90 [Mark Bayley]
166 DECC, Private Rented Sector Energy Efficiency Regulations (Domestic), (February 2015)
167 Q179 [Dr Rosenow], Association for the Conservation of Energy (HEE0042), Rockwool UK (HEE0048), Q58 [Dave Princep]
170 Qq260, 266 [Lord Bourne]
173 Energy UK (HEE0074), Energy Saving Trust (HEE0085), UKGBC (HEE0087), Saint-Gobain (HEE0076), E.ON (HEE0078), Centre for Sustainable Energy (HEE0083), ScottishPower Supplies (HEE0091), Knauf Insulation (HEE0095), WWF UK (HEE0106), Certinergy UK Ltd (HEE0006), Sustainable Energy Association (HEE0015), Age UK (HEE0019), Confederation of British Industry (HEE0035), British Board of Agrement (HEE0039), Association for the Conservation of Energy (HEE0042), Rockwool UK (HEE0048), Mineral Wool Insulation Manufacturers Association (HEE0055)
174 Energy and Climate Change Committee, Third Report of Session 2014–15, The Green Deal: watching brief (part 2), HC 348, p 35
175 Energy and Climate Change Committee, Fifth Special Report of Session 2014–15, The Green Deal: watching brief (part 2) Government’s Response to the Committee’s Third Report of Session 2014–15, HC882
176 Q22 [Peter Broad], Q51 [Joanne Wade]
177 Philip Sellwood [Q12]
178 Q199 [Lord Bourne]
181 Certinergy UK Ltd (HEE0006), Energy Technologies Institute (HEE0011), AgeUK (HEE0019), Residential Landlords Association (HEE0025), Association for the Conservation of Energy (HEE0042), Rockwool UK (HEE0048), RWE Npower (HEE0063), EDF Energy (HEE0069), E.ON (HEE0078), Public Health England (HEE0112), Mears (HEE0068)
182 Q45 [Joanne Wade]
186 Q177 [Dr Rosenow]
187 Q177 [Dr Eyre]
189 Q177 [Simon Roberts]
190 Q250 [Lord Bourne]
191 Q60 [Joanne Wade], Association for the Conservation of Energy (HEE0042), Energy Saving Trust (HEE0085)
193 Q43 [Joanne Wade]
194 Local Government Association (HEE0044), Which? (HEE0027), Citizens Advice (HEE0080), Association for the Conservation of Energy (HEE0042), UKGBC (HEE0087), Calor Gas (HEE0014), Hampshire County Council (HEE0004)
195 Q54 [Joanne Wade], Q75 [Holly Jago], Q52 [Councillor Fleming]
196 Q32 [Councillor Fleming]
198 Citizens Advice, Closer to Home, (May 2015), accessed 1 March 2016
199 Q76 [Holly Jago]
200 Providence Policy (HEE0022), Which? (HEE0027), Q162 [Dr Jan Rosenow], British Gas (HEE0041), Cibse (HEE0052), Citizens Advice (HEE0080)
201 Q162 [Dr Jan Rosenow]
203 Q75 [Holly Jago]
207 Q171 [Simon Roberts, Jan Rosenow]
208 Q171 [Dave Sowden]
209 Q54 [Joanne Wade]
211 Citizens Advice, Closer to Home, (May 2015), accessed 1 March 2016
212 Carbon Descent, Kirklees Warm Zone Economic Impact Assessment, (May 2011)
213 Q171 [Dr Eyre, Dr Rosenow] Q54 [Joanne Wade]
214 Q54 [Joanne Wade] Q171 [Dr Rosenow] Q171 [Dr Eyre]
216 Q242 [Lord Bourne]
217 Energy and Utilities Alliance (HEE0028), Confederation of British Industry (HEE0035), Beama (HEE0049), British Gas (HEE0041), Passivsystems Limited (HEE0094), Energy Research Accelerator (HEE0096), Behaviour Change (HEE0018) UKERC (HEE0050)
221 Q269 [Lord Bourne]
223 Age UK (HEE0019), Providence Policy (HEE0022), Confederation of British Industry (HEE0035), WWF (HEE0106), National Energy Action (HEE0113), Energy Technologies Institute (HEE0011), Association for Conservation of Energy (HEE0042), Community Energy Plus (HEE0045), Rockwool UK (HEE0048), Cibse (HEE0052), Q153 [Mr Sowden], Mineral Wool Insulation Manufacturers Association (HEE0055). Frontier Economics, ‘Energy Efficiency: An infrastructure priority,’ (September 2015), accessed 1 March 2016, Verco and Cambridge Econometrics, ‘Building the Future: The economic and fiscal impacts of making homes energy efficient,’ (October 2014), accessed 1 March 2016, UKGBC, ‘A housing stock fit for the future: Making home energy efficiency a national infrastructure priority,’ (August 2014), accessed 1 March 2016
224 Frontier Economics, Energy Efficiency: An infrastructure priority, (September 2015), accessed 1 March 2016
225 National Energy Action (HEE0113), Q164 [Dave Sowden], WWF (HEE0106), Providence Policy (HEE0022), Association For The Conservation Of Energy (HEE0042), Confederation of British Industry (HEE0035)
228 Q189 [Lord Bourne]
229 Energy and Climate Change Committee, Third Report of Session 2015–16, Investor Confidence in the UK energy sector, HC 542
231 Q32 [Richard Twinn]
233 Letter from Secretary of State the Rt. Hon Amber Rudd MP to Chair of the Energy and Climate Change Committee on the Outcomes of Paris COP21
234 Letter from Secretary of State the Rt. Hon Amber Rudd MP to Chair of the Energy and Climate Change Committee on the Outcomes of Paris COP21
235 Q195 [Ben Golding]
236 Cabinet Office, List of Cabinet Committees, (June 2015), p 13
237 Letter from Secretary of State the Rt. Hon Amber Rudd MP to Chair of the Energy and Climate Change Committee on the Inter-Ministerial Group on Clean Growth
238 UKGBC, ‘Over 200 businesses urge Chancellor to reconsider scrapping zero carbon’ accessed 1 March 2016
240 Q154 [Dave Sowden]
242 Q184 [Dave Sowden]
243 Q183 [Simon Roberts]
244 Q181 [Simon Roberts, Dr Rosenow, Dave Sowden, Dr Eyre]
245 National Policy for the Built Environment Lords Committee, Report of Session 2015–16, Building better places, HL Paper 100
246 Q187 [Lord Bourne]
247 Q187 [Lord Bourne]
© Parliamentary copyright 2015
Prepared 10 March 2016