Decarbonising home heating will be essential for meeting the UK’s climate and fuel poverty targets. Heat makes up nearly a quarter of the UK’s carbon emissions, and almost a third of its fossil gas demand. However, the UK currently lacks a credible strategy. If the next government wants to meet legally binding climate and fuel poverty targets, they will need a new plan.
The UK’s lack of direction is particularly shocking given energy bills and inflation are at the top of the political agenda. The cost-of-living crisis was driven by soaring gas prices in the wake of Russia’s illegal invasion of Ukraine. Several years on, the UK economy remains deeply exposed to future price shocks.
It wasn’t meant to be like this. In 2021, the Conservative government published the Heat and Buildings Strategy, with commitments to improve fabric efficiency and scale up the deployment of low-carbon heat pumps and heat networks, ultimately leading to a phase-out of fossil boilers from 2035. The proposals were expected to cut bills and support over 240,000 low-carbon jobs.
Unfortunately, the 2021 strategy now lies in tatters. The flagship pledge to require new homes to be low carbon from 2025 has not been delivered. Proposals to improve energy efficiency in the rental sector were scrapped in October 2023, as were proposed regulations which would phase out oil boilers.
Any lingering hopes for the strategy’s survival were dashed earlier this year, as the axe fell next on the Clean Heat Market Mechanism. With it fell any pretence that the government might still meet its targets.
This lack of long-term direction is, unfortunately, a reoccurring trend for home retrofit policies. In the decade between 2012 and 2022, Westminster and the devolved governments introduced at least 30 different housing retrofit schemes. The proliferation of short-term – and sometimes conflicting – initiatives has seriously undermined industry confidence, damaged supply chains, and ultimately reduced the number of homes actually being upgraded. In 2010, the UK was insulating over 1,000,000 lofts per year. In 2023, this was down to about 50,000 per year, less than 5% of the 2010 figure.
The UK needs a clear, long-term plan that can provide policy certainty, attract private investment, and ensure stability for consumers. The plan needs to address the fundamental challenges that have delayed home decarbonisation to date. Crucially – it must be a plan that the government is willing and able to follow through.
The manifestos published last week paint a decidedly mixed picture. The Conservatives barely mention energy efficiency, with no increase in funding or vision. Labour’s commitments were more substantial – they promise a Warm Homes Plan, backed by a doubling of capital investment and a commitment to stronger rental sector standards. This is a good start but must be backed up by further detail if they form the next government.
With the right long-term vision, Britain can once again upgrade millions of homes a year. Whoever wins the election, the new government will need to publish a detailed plan within their first year to get back on track. So how can we ensure the next plan fares better than the last one?
Homes are as diverse as the people who live in them. Different homes will need different upgrades, and homeowners will need different degrees of financial support. A new strategy needs to set out a clearer long-term vision of which homes will be upgraded by when, and how this will be supported through both capital funding and low interest loans.
The UK has a statutory target to upgrade all fuel poor homes by 2030 – in just six years’ time. However, six million UK households still live in fuel poverty. Any plan to decarbonise homes needs to put this front and centre, with a clear package of targeted, meaningful support for low income and vulnerable consumers. This should include free insulation and heat pumps for all low–income households. Government has been promising a new fuel poverty strategy for years, it’s about time we actually got one.
High bills have been driven by fossil gas, and consumers should expect to see their bills decrease when they move to low carbon heat powered by British renewables. Too often however, consumers aren’t feeling these benefits. A combination of high electricity prices, unfair levies, poor performing installations and limited smart tariff options all need to be addressed.
The new government should focus on making it easier and more appealing for consumers to make positive choices. The current morass of schemes is too complicated – there needs to be a clearer vision of what a good consumer journey looks like, and how expert advice can support households along this journey. Enabling actions such as fuse upgrades should be identified ahead of need, and households provided with more comprehensive guidance on how to address energy certificate recommendations. Every step of the journey must be refined and simplified to make it cheaper and easier to take action.
The supply chain journey is equally important. Government needs to seriously consider the question of why a private business would choose to invest in this sector, given past uncertainty and bureaucratic hurdles to participation. Offering greater certainty and streamlining processes will go a long way to boosting supply chain investment. But given the long history of uncertainty, government also needs to crowd in investment directly, with public funding that rewards private investment in UK skills and manufacturing.
With a plan that addresses these five priorities, the UK can achieve energy independence, cut energy bills, and keep these bills permanently low. Combining public investment with a more attractive environment for greater private investment could allow the UK to become a world leader, creating jobs and boosting economic growth across the entire country.
