Re-energising the UK’s approach to domestic energy efficiency

Panel: 2. Energy efficiency policies – how do we get it right?

This is a peer-reviewed paper.

Authors:
Jan Rosenow, The Regulatory Assistance Project (RAP), Belgium
Nick Eyre, Environmental Change Institute, Oxford University, United Kingdom

Abstract

UK residential energy efficiency policy over the last decade is widely seen to have been relatively successful. Significant improvements have been made to a notoriously old and inefficient housing stock, primarily through the installation of condensing boilers and retrofitting of basic insulation measures in large utility programs. Energy demand has fallen by 20% in absolute terms. Despite the success there has always been concern that the rate of deep refurbishment has remained low. Seeking to address this, the UK Government has made a major change in policy in 2013 introducing the Green Deal and re-focusing the Energy Efficiency Obligations. Ex ante assessments indicated that this would result in a significant reduction in the scale of energy efficiency activity. Since then, further significant reforms have been made and additional changes are planned following from an increasingly politicised debate around energy prices and the impact of ’green levies’ on consumers. This paper presents an analysis of early program results that are even more concerning, with almost no take up of the Green Deal. The paper identifies the reasons for the observed changes; it draws lessons about the relative success of regulatory and voluntary approaches; and it discusses the design details that have resulted in very low take up. The paper also presents a roadmap for recovery and identifies potential modifications that could overcome the current hiatus and increase the uptake of energy efficiency measures in the UK much more rapidly.