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Britons wasting £3.1bn a year on energy because efficiency upgrades ‘too expensive’

As winter arrives compounding the cost of living crisis, experts call on government to launch public awareness campaign on insulation and other improvements

Harry Cockburn
Environment Correspondent
Tuesday 22 November 2022 13:16 GMT
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<p>Making homes more efficient could save households hundreds of pounds a year</p>

Making homes more efficient could save households hundreds of pounds a year

UK homes and businesses are losing out on a massive £3.1bn worth of savings every year due to various barriers to implementing energy efficiency improvements.

Despite the potential for considerable long-term savings, factors including upfront costs, lack of awareness, and renters’ not being able to make key improvements, mean huge amounts of energy are wasted.

The research, by the Centre for Economic & Business Research and pump and water efficiency company Grundfos found that 74 per cent of UK households are prevented from taking steps to make their homes more energy efficient, but could see a potential 20 per cent annual saving if they were able to do so.

This is despite people saying the three biggest concerns over staying warm this winter are rising energy bills (64 per cent), boiler breakdowns (25 per cent) and energy blackouts (22 per cent).

The report follows Chancellor Jeremy Hunt’s autumn statement in which he pledged to invest £6bn more into energy efficiency by 2025, a timeframe which the report’s authors said amounted to "kicking an urgent issue into the long grass", as the UK heads into winter amid the cost of living crisis.

"None of the Chancellor’s announcements tell the public how they can save money in the near term," the researchers said, "and the target of reducing energy consumption in buildings and industry by 15 per cent by 2030 is woefully unambitious. This will not unlock energy savings to the extent that households and businesses sorely need."

The upfront costs of installing a new air source heat pump are typically between £7,000 and £13,000, with the average cost coming in at just over £11,000, for which people in England and Wales are eligible for a £5,000 grant due to the government’s boiler upgrade scheme.

Meanwhile, replacing or improving cavity wall insulation can be an expensive specialist job, but putting lagging into lofts or insulation below floorboards is relatively cheap and can be done by homeowners themselves.

For instance, loft insulation typically costs around £300, and can cut bills by £180 a year, meaning a less than two-year return on investment, according to RenewableEnergyHub.co.uk.

Almost a third, 31 per cent, of people said upfront costs were preventing them from taking action to make their home more energy efficient, and 21 per cent of people said not being responsible for the heating system (due to renting), made it difficult for them to install upgrades.

Alongside the upfront costs of taking action, a lack of awareness of effective efficiency measures is also a considerable issue.

As a result, the authors are calling for a public awareness campaign to improve energy efficiency and help save businesses and households money.

Rowlando Morgan, the CEBR’s head of environment, infrastructure and local growth, said: “The outcomes of the paper underscore a critical lack of awareness as a key barrier preventing the adoption of energy-efficient measures, alongside high upfront costs and a lack of available qualified installers presenting further challenges.

"Our findings indicate that the UK government needs to action several new policies including providing clearer information on energy efficiency, targeting schemes to the poorest households and prioritising schemes to offset the upfront costs of installing new heating systems.”

Glynn Williams, UK Country Director at Grundfos, said the cost of living crisis means homes and businesses cannot afford to be losing out on more than £3.1 billion in energy efficiency savings, but there remains "a clear gap between the barriers and benefits that must be overcome".

He said: “Whilst there is plenty that the government can and should be doing, particularly around regulation and enforcement of energy saving measures, there is clearly a large gap in knowledge that must be addressed.

"We, therefore, call on the government to launch a public awareness campaign that will finally dispel the damaging myths around energy efficiency improvements and lead to the cost savings our households and businesses deserve.”

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