“The UK’s housing stock is among the least energy-efficient in Europe, with UK homes losing heat up to three times faster than European neighbours. With a nearly £448 bills gap between the most and least energy efficient homes, and homes responsible for around 20% of the UK’s emissions, tackling this challenge has never been more important.
Based on our experience working with governments in eight countries across Europe, we are proposing five practical policies that we believe would make a difference – helping households to cut both their energy bills and their emissions.”
The results of our research, delivered in partnership with economics consultancy Cebr and polling company OnePoll, reveal a stark and growing energy efficiency gap.
From October 2022, when the Government’s £2,500 Energy Price Guarantee comes into effect, the 19 million households living in homes rated below the Government’s target Energy Performance Certificate (EPC) C rating are set to pay £448 more on average per year for their energy than the 10 million living in homes at or above the threshold.
Worryingly, the research found that the least energy efficient housing is in Wales, Yorkshire & the Humber and the West Midlands, where levels of poverty are higher than the UK average. That means those who are already struggling the most may have the biggest financial burden to shoulder.
The positive news is that six in ten of us are now more interested in improving our homes’ energy efficiency as a result of rising energy costs. But with only 34% planning to make energy efficiency improvements in the coming year, it’s clear that more support is needed to convert that interest into action.
The biggest reasons cited for not making efficiency improvements are not being able to afford the upfront costs (34%), not knowing enough about what the options are (33%), not being sure if it’s worth the investment (30%) and seeing it as too much hassle (27%).
With affordability the biggest barrier, just 44% had heard of any of the current Government schemes to financially support energy efficiency improvements, while two thirds (66%) believe the Government should be doing more.
Tackling the UK’s energy efficiency gap should be a national priority. It’s in everyone’s interests to improve the efficiency of UK homes, helping shield households from the impact of rising bills, while creating better quality homes and reducing carbon emissions at the same time.
of homeowners and renters say they are already feeling pressure on their finances due to energy price increases.
More than 7 in 10 are worried about the next energy price rise cap due to come into effect in October.
There is a significant geographical divide in energy efficiency, with homes in Wales, Yorkshire & the Humber and the West Midlands the least energy efficient, while those in London are the most.
are more interested in energy efficiency than they had been previously due to recent rising bills.
have heard of current Government schemes to support energy efficiency.
believe the Government should be doing more to help people improve the energy efficiency of their homes.
2 in 5 know their home’s EPC rating.
plan to make energy efficiency improvements in the coming year.
Higher energy costs will have a disproportionate impact on the least energy inefficient homes with annual bills set to increase considerably more for those with lower EPC ratings.
EPC rating E
EPC rating D
EPC rating C
Energy Performance Certificates (EPCs) tell you how energy efficient a home is and give it a rating from A (very efficient) to G (very inefficient). They estimate how costly it will be to heat and light a property, and what its carbon emissions are likely to be.
An EPC also includes information on what the energy efficiency rating could be if recommended energy efficiency improvements are made, and highlights cost effective ways to achieve a better rating. EPCs must be produced by an approved domestic energy assessor and are needed whenever a property is built, sold or rented.
For more information, the Energy Saving Trust has produced a helpful guide.
Our research also revealed a significant gap between the regions of England and Wales with the most and least energy efficient housing stock. The areas with the least energy efficient homes are Wales, Yorkshire and the Humber and the West Midlands, where levels of poverty are higher than average, while London has most energy efficient dwellings.
In most local authorities across England and Wales, median energy efficiency scores are below 69 – the minimum score required for a C rating. Comparisons between scores in local authorities are imperfect, as there are huge differences in population size and housing stock, but it is notable that eight of the ten local authorities with the highest scores are in Greater London, while seven of the ten lowest scores are in Wales.
Note: Band ‘A’: 92-100, Band ‘B’: 81-91, Band ‘C’: 69-80, Band ‘D’: 55-68, Band ‘E’: 39-54, Band ‘F’: 21-38, Band ‘G’: 1-20
Flats or maisonettes are more likely to have higher energy efficiency ratings than houses, reflecting the lower average age of their builds, and reduced external wall exposure. Detached houses, with external walls exposed on all sides, are the least energy efficient.
Rented homes are overall more likely to be energy efficient than owner-occupied homes, and socially rented homes tend to be more energy efficient than those rented from private landlords.
Broadly speaking, the more recently a home was built, the more energy-efficient it is likely to be. There is a marked increase in energy efficiency scores for housing built since 2012, which may be due in part to the introduction of the EPC system in 2007, which has helped to encourage the inclusion of energy efficiency measures in new housing and gives greater transparency to homeowners and renters.
As part of our research, we asked households which energy efficiency measures were already present in their homes. Only 45% have roof or loft insulation, only 35% have cavity wall insulation and only 33% have energy efficient lightbulbs. This illustrates the scale of the missed energy efficiency opportunity.
One key reason so few people know how much money they could save if they increased the energy efficiency of their homes is that a minority – only 40% - know their home’s EPC rating in the first place.
More than six out of ten homeowners and tenants (61%) agree that rising energy bills “have made me more interested in improving the energy efficiency of my home” – but only 34% plan to install energy efficiency measures in their homes during the next year.
The reasons why they are not taking action are varied but include not being able to afford the upfront costs (cited by 34%), not knowing what the options are (33%), not being sure if it’s worth the investment (31%) and finding it ‘too much hassle’ (28%).
These findings underline the need to improve awareness of potential savings from energy efficiency measures and to help people to better understand the steps they can take to reach a higher EPC rating.
Almost two-thirds (64%) say they would like to see grants to fund or subsidise installation of energy efficiency measures; while about half would be in favour of interest-free or low interest loans to fund home energy efficiency measures; and/or removing VAT on energy efficiency products.
National Delivery Targets - Introduction of a specific, transparently tracked measure for the number of energy efficiency installations and improvement of homes to EPC band C, to get UK homes to maximum efficiency as soon as possible.
Financial Support - Increased support for those on lower incomes to fund the installation of energy efficiency measures, similar to the MaPrimeRénov’ scheme in France, alongside interest free or low interest loans for those more able to pay, comparable to loans available in Germany.
Remove VAT - Cut VAT to zero on all energy efficiency products, not just those installed by tradespeople.
Encourage Behaviour Change - Consider government campaigns and long-term incentive programmes to encourage consumer take-up. For example, explore aligning Stamp Duty with energy efficiency so homebuyers are incentivised to buy more energy efficient homes and install energy efficiency measures in the first two years after they buy a new home, when motivation to make changes to a property is highest. Consider developing the equivalent of the “cycle to work scheme” for energy efficiency for companies to support employees in taking action.
Support the Supply Chain - Funded training for tradespeople to learn how to install energy efficiency measures, enabling the scaling up of new technologies such as heat pumps, complemented with support across government for bringing more Trade Apprentices into the industry.
MaPrimeRénov’ is an umbrella of grants and support run by the French government to support households with renovations regardless of whether they are owners or landlords. Launched in 2020, it provides a tailored file to the consumer on eligible energy efficient renovations along with linked grants. It has a €2bn euro budget and supported 500,000 renovations in 2021 with a target of 700,000 in 2022. Currently renovations are mainly limited to properties over 15 years old.
In Germany KfW, a state-owned investment bank, provides loans to support new builds and renovations for energy efficiency. The scheme has run for over 10 years and has loaned €100bn (with an estimated €260bn additional spending by property owners triggered by these loans). It is estimated the scheme supports 320,000 properties per year. The government supports the scheme with €2bn Euros annually.
The five practical policy measures Kingfisher is proposing, based on our experience operating in eight countries across Europe, would make a meaningful difference to closing the UK’s energy inefficiency gap, at a time when tackling this challenge has never been more important.
Ultimately, this is an issue that can only be solved through collaboration. As the UK’s leading home improvement retailer, we know that we have an important role to play.
Kingfisher’s businesses have been working for many years to support customers to improve the energy efficiency of their homes. In the UK, B&Q and Screwfix offer a wide range of affordably priced energy efficiency products such as insulation, double glazing, LED lightbulbs, smart thermostats and energy-saving appliances, with Screwfix also selling heat pumps and solar panels.
B&Q has recently launched an energy efficiency hub on its website diy.com with expert tips on how to reduce energy usage. Later this year, it will launch a one-stop energy saving service designed to demystify the complexity of energy efficiency, help customers create a personalised action plan and connect them to the products and services they need.
With households facing soaring energy bills, tackling the issue of energy inefficient housing should be a national priority. With Government and business working together, we can collectively help to ease some financial pressure on households, while creating better quality homes and reducing carbon emissions at the same time.
The polling added a further layer to modelling undertaken by the Centre for Economics and Business Research (Cebr) which analysed the energy efficiency divide in England and Wales. Cebr drew on data from the Office for National Statistics (ONS), studying variations in home energy efficiency by local authority area and across ten regions; and examining differences in the energy efficiency of different types of housing. This analysis has informed detailed estimates of the scale of cost savings that energy efficiency improvements could deliver for households in different types of housing, across England and Wales.