Labour’s energy efficiency plan – an excellent start

end to cold homes

The good thing about Labour’s energy efficiency plan is that it’s a proper plan with costed and achievable targets. But does it go far enough?

Among the many failures of the coalition government, its inability to deliver energy efficiency and renewable energy to householders, especially those in fuel poverty, is one of its most serious. While the department responsible, DECC, has produced countless strategy documents (its energy efficiency action plan alone is 146 pages long) its achievements on the domestic front have been little short of pathetic. It closed down Labour’s successful Warm Front programme as well as the earlier versions of the obligations on energy companies, known as CERT and CESP. It abandoned Labour plans to put in place a successor to the Decent Homes Standard which would have focussed on energy efficiency. Instead, it launched the Green Deal as its flagship scheme, making all sorts of claims for it (including that it would achieve ‘near zero’ carbon emissions from housing by 2050). In fact, as Labour’s paper points out, it’s been a flop: although over a third of a million householders commissioned Green Deal assessments, less than 2,000 have actually completed the work so far. This means the coalition can’t meet its carbon targets on its current trajectory: as an example, the Committee on Climate Change said that 130,000 solid wall homes should have been insulated last year. But less than 25,000 were actually done.

Labour’s new plan is set out today in An End to Cold Homes. Like the coalition’s plans, much of it rests on payments by the energy companies. It would keep the size of the Energy Company Obligation (ECO) as it is now, but reuse the money in two ways. First, it would generate half a million free energy efficiency assessments for householders a year. These would be aimed not only at advising people what they need to do but at persuading them they need to do it. Then, 200,000 poorer households each year would be targeted for ‘whole house’ retrofit work, aimed at getting their homes to at least grade ‘C’ on the energy performance certificate scale (A, B and C are the highest grades, very poor properties are in grades F and G; 95% of families in fuel poverty live in houses graded D or lower). Work should cost an average of £4,750 per property, with an upper limit of £10,000. The work would be done by local authorities or other local agencies, building on the successful experience which many councils have with earlier programmes.

This programme is both bigger and more comprehensive than anything yet tried, and will be targeted at fuel-poor households. Its ‘whole house’ approach is particularly welcome, since ECO has so far aimed to install single measures like loft or wall insulation.

The third big element is a revamped Green Deal (and maybe we should revamp the name too). It would involve a guarantee to bring funding costs down, then subsidy to make the loans actually interest-free to the consumer. This should be a massive boost to the attractiveness of the scheme, with a target of making one million loans available in the next parliament. Neither this or the revised ECO would involve extra spending by the energy companies.

The fourth element toughens up the measures already going through which will raise energy efficiency in the private rented sector. At the moment, houses that are let or relet will, by 2018, have to reach EPC grade E. But, as Labour says, this is a very low standard. The plan is therefore to keep it but add a further requirement that houses have to reach grade C by 2027.

Finally, Labour wants to revert to its original plan for zero carbon new housing, without the compromises the coalition has introduced which have eroded the target. This is excellent, as building new homes that are not as energy efficient as possible is simply daft.

All this looks good, but does it go far enough? The coalition has stuck, albeit reluctantly, to the carbon emissions targets which Labour enshrined in the Climate Change Act 2008. This means we should be aiming to reduce emissions by 80% by 2050, with an interim target of 34% by 2020. These are tough targets. Translated into what’s needed in the housing sector, we not only need to stop building homes that aren’t ‘zero carbon’ but we need to upgrade all our existing stock. That translates into over 600,000 high-standard retrofits every year, or more than one a minute. With a programme of that scale, any delay at all means it’s doomed to failure.

Labour has chosen to make the most of the current levels of ECO funding – and its plan has a very good chance of doing that, especially having been set in advance and if it’s applied rigorously, not in the on-off manner of the coalition. But a lot more investment is still needed. Labour’s plan is an excellent start, but more money is needed to drive it even faster. For example, the UK Green Building Council has called for an infrastructure fund that would start off at half a million high-standard retrofits per year, end fuel poverty and get all houses up to at least a C grade by 2025. That sounds like an even better plan.

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