Free energy plans should be offered to every home in the UK to lower emissions while reducing energy bills before making them mandatory in the mid-2030s, according to a report by the Tony Blair Institute, shared with City A.M. this morning.
The recommendation is one of a number of measures the report says could halve heating bills by 2035 as part of a plan to lower household energy costs, achieve net zero greenhouse gas emissions and increase energy security.
The plans to make homes greener should be supported by a new advice service, grants and interest-free loans, the report says, alongside other suggestions such as removing policy costs on energy bills for schemes which have closed.
The authors say Chancellor Rishi Sunak is offering much-needed but expensive “raincoats” to protect consumers from rising energy bills but argue “now we need to fix the roof”.
The potential speed of delivering the home energy plans mean they are “one of the few means of supporting customers through the immediate energy crisis and therefore should be progressed as a matter of urgency,” the report says.
It also recommends setting up a new independent home energy service to advise on the home energy plans and help support delivery. The Tony Blair Institute says the model works, with similar approaches in Germany and Scotland “driving down bills and showing high consumer satisfaction”.
The Government’s current Simple Energy Advice website for England and Wales “is failing to reach householders with good advice when they need it most”, according to the report, and “without an integrated financial offer they often serve only to highlight how little support is available to households”.
It estimates its plan would cost around £39bn but save between £47bn and £140bn overall, depending on energy prices.
While the home energy plans could initially be marketed as a way to cut costs and go green, “over time nudges will need to be replaced by requirements”, the report says.
The Government should then “have options in place to enforce a backstop for all homes” by the early 2030s, with the target that by 2035 all households “should have accessed a plan for their property”.
New advice service
The new advice service, which would include a phone line and local centres, “should empower households to create their own plans, with clear estimates of costs, bill savings and available financial support for different technologies based on existing data and answers to simple questions”, the report says. It could help support changes such as introducing insulation or heat pumps.
The report also says that £160 is paid per year in policy costs on energy bills, with only £3 spent on existing green schemes. “The rest is on social policy and legacy policies that have long since closed,” it says, recommending those costs are shifted to be funded by general taxation as they are “distortionary”.
The institute’s head of net zero and one of the authors of the report, Daniel Newport, said: “People right across the country are struggling to keep up with spiralling energy bills and the Government doesn’t seem to have a long-term plan.
“While short-term support such as the measures announced last week are important, by spending a fraction of that amount per year the Chancellor could cut heating bills in two over the coming decade and insulate the UK from future economic shocks.
“Sunak is currently handing out much-needed – but very expensive – raincoats. Now we need to fix the roof.”Tony Blair institute
Naomi Baker, senior policy manager at Energy UK, said: “This report emphasises the need to get the financial incentives right and sets out some of the powerful levers that Government can pull to get things moving. As with offshore wind and electric vehicles, industry can drive down costs and deliver here but only if the incentives are practical and effective.”
The report, published by the Tony Blair Institute for Global Change, is titled “Three birds, one stone – how greener homes can solve the energy trilemma” and sets out a plan to reduce heating bills and support the goal of reaching net zero carbon emissions while making the UK more energy secure.
A Government spokesperson said: “The Government has introduced a wide range of measures to help people manage their energy costs. This includes £400 payments towards energy bills, a further £1,200 to around eight million low-income households, and a new website providing guidance on all the support that’s available.
“Thanks to Government support, the number of homes with an energy efficiency rating of C or above is at 46 per cent and rising, up from just 13 per cent in 2010. We are investing over £6.6bn to help decarbonise homes and buildings, and to ensure all homes meet EPC band C by 2035.”