Arguments over elements of the government’s drive to improve home energy efficiency risk overshadowing the goal of ending fuel poverty, argues Duncan Price
The big picture
The campaign waged against the so-called ‘conservatory tax’ by certain sections of the press has been both disingenuous and overblown. More importantly, it has also missed the wider picture. Proposed changes to regulations around ‘consequential improvements’ need to be understood in the context of green deal and wider government policy.
Green deal is a welcome addition to the policy landscape that is necessary but not sufficient - necessary because it provides a vital financial mechanism and associated regulatory framework for quality assurance and consumer protection; not sufficient because the anticipated uptake rates are too low.
The government projects that on average 100,000 homes a year will take up the green deal between 2013 and 2027 in the absence of any subsidies or other incentives. A further 260,000 households a year are expected to take up measures funded by the energy company obligation between 2013 and 2022. This represents a reduction in the installation rates of basic energy efficiency measures compared with previous schemes.
As a result, without greater regulatory and financial support, the green deal and ECO risk falling short of delivering against the government’s legally binding 2016 fuel poverty targets and CO2 reduction targets under the fourth carbon budget.
A range of carrots and sticks are therefore required in order to drive the market. Incentives could include stamp duty exemption, council tax rebates or cash incentives such as recycling £4 billion carbon tax revenues to provide capital subsidy or lower green deal interest rates.
Ultimately, though, regulation has its part to play. Building regulations have arguably provided the strongest drive to improving building standards in the UK.
The proposed changes to Part L requiring consequential improvements are proportionate, cost-effective and practical. Their implementation will harness additional private sector investment through green deal and normalise the practice of improving the energy efficiency of our housing stock.
Duncan Price is a director of Verco, formerly Camco’s UK advisory business.