A new analysis from E3G has revealed that delivering proposed minimum energy efficiency standards could save the UK economy £1.75 billion. How can this help to reduce the rates of fuel poverty?
Without regulatory intervention on energy efficiency in the private sector, the government cannot meet its statutory fuel poverty, energy demand reduction, and net zero homes targets. Improving energy efficiency in the private rented sector is essential to combat fuel poverty, reduce UK demand and improve our energy security, and meet out net zero ambitions.
The ‘Cutting Energy Bills and Raising Standards for Private Renters’ report has urged the UK Government to deliver on its proposals to strengthen energy efficiency standards for rented properties. It reveals that new energy efficiency standards would save renters £570 per year, lead to aggregate annual savings of £1.75 billion and help to meet fuel poverty and energy demand reduction targets.
Energy Bills Have More Than Doubled
Currently, over a quarter of renters are living in fuel poverty, while two-thirds of privately rented homes don’t meet the government’s proposed target energy efficiency level. Every household and business in the UK has felt the impact of the energy crisis, with soaring gas prices mean that even after the government’s Energy Price Guarantee intervention, energy bills have more than doubled.
Ofgem has revealed that energy bills have more than doubled from an average of £1271 in 2021 to £2500 this year and £3000 from April 2023. National Energy Action has estimated that these rises will push more households into fuel poverty, and that from April 8.4 million UK households will be in fuel poverty. In 2020, the government first proposed new energy efficiency standards for landlords in a consultation launched in 2020, but now two years on, the completion of it is still to be seen.
Matt Copeland, Head of Policy and Public Affairs at National Energy Action, explained that standards need to be tightened to ensure that private renters are living comfortably: “Private renters are more likely to be fuel poor than people in any other tenure, and more likely to live in the leakiest properties, often needing to spend thousands of pounds more than the average household just to keep a healthy temperature at home.”
Tightened minimum standards are key to ensuring that all fuel poor private renters can live in a warm home.
Regulations Are Needed To See Strategies Succeed
E3G highlighted in the report that the UK Government has three important energy efficiency targets related to energy security, fuel poverty, and net zero. The first is a legally binding fuel poverty target, set in 2014 and reconfirmed in 2021, to ensure as many fuel poor homes as it is reasonably practicable achieve a minimum energy efficiency rating of band C by 2030.
Confirmed again in last year’s Heat and Buildings Strategy, The Clean Growth Strategy set a target to upgrade all homes to EPC C by 2035 and the government must focus on ensuring that all homes reach this target, with an earlier 2030 target date for privately rented homes.
In November 2022, Chancellor Jeremy Hunt said that the UK would aim to reduce final energy demand across buildings and industry by 15 per cent by 2030. Without these regulations, E3G has expressed that strategies won’t have a plausible path to success. Dan Wilson Craw, Deputy Director at Generation Rent, explained that while the government’s ambitions on energy security, fuel poverty and climate change are all laudable, they are not credible unless the government brings forward their proposed new minimum standards.
He said: “It is clear what a positive impact minimum standards have already had for renters living in the worst properties. By improving insulation and heating in private rented homes, landlords allow their tenants to heat their homes at less cost which not only improves comfort levels but reduces damp and mould, and the health problems they cause.”
The government has to go further, not just for renters but for the sake of the planet and the country’s energy security.
Improving energy efficiency in the housing sector is crucial when it comes to improving the UK’s energy security and reaching our net zero targets, and it is important to see regulations in place which focus on this.