Government unveils flurry of energy efficiency promises

The government has today promised to turbocharge the deployment of energy efficiency measures in buildings across the UK, with the proposal of a number of reforms to the various mechanism that incentivise firms to save energy.

As part of today's Green Finance Strategy the government has promised to reshape lending practices, homeowner incentives and data collection to ensure lenders, landlords, and building occupants are better incentivised to invest in energy saving solutions.

Commercial and domestic buildings combined account for around 40 per cent of UK carbon emissions and while building energy efficiency has improved significantly over the past two decades the roll out of approved energy saving measures has slowed in recent years following controversial cuts to funding programmes.

There are currently relatively few government-backed incentive schemes to encourage building owners to invest in energy efficiency measures, while new energy efficiency standards have been criticised by campaigners who argue they are neither ambitious enough or adequately enforced.

As such in 2017 the government began considering how to build a market for green finance products that could boost the uptake of energy efficiency technologies. Today it published the results of its call for evidence exercise and promised to launch a consultation later this year on whether lenders should have to support households undertaking retrofits.

The government also said it would overhaul the Energy Performance Certificate (EPC) register to make national data on energy efficiency more accessible and relevant for lenders such as banks and mortgage providers.

It said the move would support lenders in driving energy efficiency by allowing them to evaluate the EPC performance of their lending activity. Government data from the National Energy Efficiency Data Framework could also be used to support innovative green finance product development, it suggested.

In addition, the government said it would consider forcing landlords and businesses to measure and declare their operational energy use, and will investigate expanding the Public Sector Energy Efficiency Loan Scheme to boost carbon savings in public buildings such as schools and hospitals.

The news follows the launch yesterday of a £5m fund to spur the growth of the UK's green mortgage market, where homeowners are offered preferable interest rates for more energy efficiency homes. A £10m Whole House Retrofit competition was also launched, to reward companies seeking to design cheaper systems for upgrading homes to higher green standards.

However, some observers questioned whether the new proposed measures go far enough. Ed Matthew, associate director for environmental think tank E3G, pointed out that hitting the government's own target of ensuring all homes reach EPC band C by 2030 will require £1bn extra in public funding each year.

While he said green mortgages could help towards the goal, real change would be driven by the introduction of stamp duty rebates for energy efficient homes and zero per cent loans for retrofitting works.

He called on government to make energy efficiency an infrastructure investment priority, pointing out that the £15m of new funding announced yesterday represents just 1.5 per cent of the additional funding needed. "This level of funding will do almost nothing to help people make their homes energy efficient," he said. "It is beyond pathetic. If the Treasury can't properly fund the most cost effective solution to climate change we are in deep trouble."

Alasdair MacEwen, a spokesman for the Energy Efficiency Infrastructure Group, which represents over 30 cross-industry organisations, echoed Matthew's concerns.

"Unfortunately, the announcements are an inadequate response to the challenge at hand," he said. "There is overwhelming consensus around the economic and health benefits of energy efficient homes and that reducing home energy use is the crucial first, and least cost step in achieving net zero emissions."