Taxes not leviesįunding the ECO through levies on energy bills means the poorest homes currently pay the same 15% share of their energy bill towards green policies as the richest households. Recent research by the New Economics Foundation suggests net zero targets require increasing annual funding for insulation to around £7 billion, which would retrofit 7 million homes by 2025. Sunak confirmed that from 2022 the ECO’s funding will grow from £640 million to £1 billion per year to retrofit a total of 305,000 homes during its lifetime, but this isn’t nearly enough. At an absolute minimum, the government should be aiming to install insulation in 1.3 million homes a year – a rate it managed pre-2013. At this rate - under the ECO alone - it would take 50 years to implement just one insulation measure across a possible six million fuel-poor homes. Since October 2018, the ECO has delivered 120,000 insulation measures per year. With the energy crisis making its own case for radical reform and the government yet to finalise its plans for the future of the ECO, we offer four recommendations for solving the energy crisis. Since 2013, it’s estimated an additional nine million homes could have been insulated, saving homes a combined total of £830 on gas bills alone by 2022. A recent analysis by Carbon Brief suggested that cuts to the ECO will have added £808 million onto total household energy bills by summer 2022 due to 1.1 million fewer insulation installations per year. In 2013, the Conservatives moved to “ cut the green crap” from energy payments, gutting the ECO and raising rather than reducing household bills. Meanwhile, it has delivered just 545 electric heat pumps since October 2018 – roughly 14 installations a month. Since 2018, the ECO funded the installation of 230,000 new gas boilers, with 94,000 of these installed without other efficiency measures like insulation. ![]() The ECO has also done little to wean households off expensive gas heating. The installation of ECO measures has not returned to its 2013 peak. They represent a sticking plaster, not a long-term solution. ![]() These measures may lessen the immediate financial pain, but they do not tackle the underlying causes. Instead, Chancellor Rishi Sunak has announced a raft of measures to offset price rises through one-off grants, council tax rebates and repayable discounts on bills. But a nationwide efficiency drive does not appear to be at the top of the UK government’s list of proposed solutions to tackle the energy crisis. UK households are uniquely susceptible to these spikes because they inhabit some of the least energy efficient houses in western Europe.Īn obvious way to offset the impact of wholesale energy price rises is to improve the efficiency of housing stock, to deliver the same comfort using less energy. The rise in wholesale fossil fuel prices accounts for almost £500 of the rise in household bills, with the remainder due to bill payers covering the cost of failed energy suppliers. Shockingly, that would mean more than a fifth of homes having to choose between heating or eating. According to the charity National Energy Action another two million UK households could be plunged into fuel poverty by then, bringing the total to six million by the end of the year. This is an increase of roughly £700 a year (US$950). ![]() Average gas and electricity bills in the UK will rise by 54% on Apwhen the regulator Ofgem lifts its price cap.
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