Why energy efficiency is one of the only ways to tackle high energy costs

The UK is facing an energy crisis the likes of which have not been seen for half a century.

A combination of factors have caused energy costs to double in the last twelve months. Examples include the Russian War in Ukraine, a decline of UK gas storage facilities, and a surge in global energy demand as economies recover from the covid pandemic.

Historically, BHESCo have always been able to help local residents reduce their energy costs by researching the market and finding a cheaper supplier or tariff.

Just a few years ago, a quick check through an energy comparison website could save someone £300 on their annual energy costs. Sadly, this is no longer the case.

The spike in wholesale energy costs has seen the profit margins of energy companies flatline. In fact, it has become so difficult for energy suppliers to turn a profit that 27 energy companies went out of business in 2021.

These days, all of the energy companies have set their tariffs as high as they are allowed under the Ofgem energy price cap. For this reason, there are no longer any savings to be found by switching.

The only option left for energy customers to lower their monthly bills is by reducing the amount of heat and power they use in the home.

This can be achieved by developing good behaviours around energy use, such as turning off heating in un-used rooms, or by improving the ability of a home to hold in heat.

The trouble is that the UK has under-invested in energy efficiency for decades and has some of the oldest, coldest, and most inefficient housing in all of Europe. There is a lot of work to do!

Why are homes in the UK so poorly insulated?

For decades successive UK Governments have failed to introduce an effective national energy efficiency improvement programme.

The average Energy Performance Certifiate (ECP) rating in England and Wales is a D, which is not a great rating. Furthermore, there are 4,860,505 buildings that have an EPC of E, F or G, which are considered to be a poor rating.

This means that there are around 13,593,429 domestic properties that need to be improved to meet the Governments target for all housing to have an EPC of at least a C.

Find the EPC of your home, street, neighbourhood, or town – https://epc.opendatacommunities.org/

As recently as September 2020 the Government launched its flagship Green Homes Grant scheme, which we were told would deliver energy efficiency upgrades to 600,000 homes.

However, a complicated customer journey, long delays in receiving the grant, and a huge lack of certified installers meant that the programme was scrapped after just six months, having met only 10% of its target.

A key factor in the failure of the programme was its cumbersome administration, which was outsourced to a private U.S. company at a cost of £50 million to the UK taxpayer.

Another painful legacy from the scheme is the high costs involved for installers to be included as an accredited partner. Thousands of pounds were spent by small businesses across the country to gain the accreditation required to be involved with the scheme, only to see that money wasted when the grant was pulled in March 2021, an experience which has left the industry feeling bruised and bitter.

Why support for installers is key to delivering a national energy efficiency programme

It is no surprise that following years of neglect the energy efficiency industry struggled to meet the huge surge in demand that came in the wake of the Green Homes Grant.

Following David Cameron’s decision to ‘cut the green crap’, installations of energy efficiency measures such as loft and wall insulation plummeted from over 2 million a year in 2012 to just 72,000 in 2021.

To achieve a genuine revolution in the energy efficiency of our homes and businesses, the government has to intervene and provide support to both industry and homeowners.

The Italian government has shown what true ambition looks like with their energy efficiency ‘Superbonus’ scheme, introduced in 2021.

Under the scheme, the Italian government is offering to pay each homeowner 110% of building costs to convert their existing home into an eco-friendly residence, up to a maximum of 100,000 euros.

Closer to home, the Labour Party has said it would provide £60 billion over a ten year period to deliver home energy improvements to 2 million homes each year.

Programmes such as this provide confidence for installers to make the long-term investments in training and recruitment which are needed to address the huge skills gap in the UK.

Without the right number of skilled installers available to carry out the work, the UK will never be able to meet its carbon reduction commitments. Research by RetrofitWorks has shown that the UK needs 30,00 more skilled workers for insulation work and 60,000 trained technicians for heat pumps if it is to deliver on its net zero carbon targets by 2050.

What help is available right now for people wanting to improve the energy efficiency of their property?

The good news is that there has been a gear change in energy efficiency policy by the Government in the last few years, and there are now a number of programmes available both nationally and locally to support homeowners who want to improve their property.

Homeowners wanting to install measures like insulation and double glazed windows can apply for a grant from the ECO scheme, the Local Authority Delivery (LAD) scheme, or the Home Upgrade Scheme (HUG).

Anybody looking to replace their oil or gas fired boiler with a modern low-carbon alternative can find financial assistance through the Boiler Upgrade Scheme (BUS).

Information on all of these schemes is available on our energy advice webpage – https://bhesco.co.uk/blog/energy-bill-crisis-what-help-is-available-sussex

energy efficiency insulation improvements in a cold home in the UK

What more can be done to make UK homes and businesses more energy efficient?

In addition to the support already available there is a lot more that policy makers could be doing to accelerate the upgrade of our homes.

For example, Councils could introduce a council-tax discount for homeowners or landlords who make retrofit improvements to their property.

The Government could reduce the stamp duty that is applied on the sale of properties with a high Energy Performance Certificate (EPC). They could also look at re-introducing the Feed-In-Tariff to incentivise the uptake of solar power, a previous policy that helped to deliver one million solar PV installs in just a few years.

Banks and mortgage lenders could design ‘green mortgages’ which offer preferential interest rates for buyers who pledge to invest in improving the energy performance of the property.

And funding could be made available for businesses to take on apprentices in the energy efficiency and heat pump installation trades, to create a new generation of highly skilled workers who are essential for building the low-carbon sustainable future we so badly need.

How can community energy groups support local energy efficiency programmes?

Two of the key barriers that prevent the take up of energy efficiency improvements are inertia combined with a sense of being overwhelmed. 

Improving the energy efficiency of your property can seem like a daunting prospect and it can be difficult to know where to begin. 

Also, retrofitting the home can often feel like a big hassle that can easily be put of for another day. Whilst there are undoubtedly long-term cost-savings to be enjoyed, there is an initial upfront cost that many people may struggle to afford, or would rather spend on a holiday. 

Community energy groups can help to overcome both of these barriers by spearheading local energy efficiency campaigns that capture people’s attention and provide a sense of group action. If people feel like their friends and neighbours are taking action on climate change, they too will be more encouraged to get involved for fear of missing out of fear of looking bad. 

Community energy groups, in their position as a locally embedded and non-profit driven organisation, can act as a catalyst for change by organising events, hosting an information stall, and even going door-to-door to discuss people’s needs and concerns around energy efficiency. 

They can identify local champions to evangelise on the benefits of retrofit, or organise an Eco Open Homes event where people can visit  a well insulated home, or a home with solar power or a heat pump, and see for themselves how it all works and hear from the experiences of those who enjoy the benefits

Community energy groups may also be able to apply for grants and funding to install energy efficiency measures in local homes, whether these be smaller ‘low-cost’ measures or larger improvements like loft insulation. They can work with residents to identify grants that they are eligible for and help them through the application process. 

Many people have a mistrust of the big energy companies and switch off to messages they receive from them about energy saving. Community energy groups are in a unique position to act as trusted intermediaries, applying local knowledge to tailor communications to the different groups that make up the community, and emphasising different aspects of retrofit to appeal to different audiences.  

What are BHESCo doing to support homes and businesses who want to improve their energy efficiency?

In May 2022 BHESCo launched a new pilot scheme looking at the benefits of addressing energy efficiency improvements at a whole street level.

The programme is called ‘Retrofit Streets’ and we are currently with residents of Hanover Street in Brighton .

Our goal is to identify common improvements that can be made to a number of properties and to achieve cost savings on the installation through ‘economies of scale’ (e.g. getting a better price from installers when bargaining for measures to be install in multiple houses at the same time).

We will also be investigating the introduction of rooftop solar PV and battery storage for as many properties as is feasible, and looking to link these together create a microgrid.

Outside of the Retrofit Streets programme, BHESCo continue to provide trusted impartial advice to local residents about the best ways to cut down on bills. We have recently been giving a lot of talk to local groups about the best ways to make small changes that can help to drive down bills. 

This might include changes to behaviour and cultivating good habits, like turning the thermostat down by a degree or two or reducing the number of hours that the heating is on. 

Or it could be by demonstrating the benefits of installing low-cost energy saving measures such as LED lights, draught excluders, or radiator reflector foil. You can find more tips and advice on our dedicated energy advice page – https://bhesco.co.uk/blog/six-ways-save-energy-stay-warm-winter-brighton-hove

BHESCo continue to support homeowners and businesses through our project management and ‘Pay As You Save’ financing.

We make our services available for no upfront cost, working alongside our trusted network of local partners to design and project manage the installation of energy saving and renewable energy systems.

The equipment is installed on behalf of our customers using money that has been invested by members of our co-operative. In this way, customers can enjoy a modern low-carbon energy system which costs them nothing to install and will start delivering an immediate saving on monthly energy bills.

You can read more about the projects we have installed over the year on our Case Studies Page.