Problem

Approximately one-fifth of the UK's total emissions come from the housing sector. Domestic properties in the UK are up to three times less energy efficient, compared to those in many other European countries.

The UK sees large disparities in energy affordability, where regions that suffer from higher-than-average poverty rates also have low numbers of energy-efficient housing. The financial burden of necessary energy improvements, such as the installation of air source heat pumps, which can cost between £7,000 and £13,000, is unaffordable for many, presenting a substantial equity challenge in the UK's 2050 net-zero commitment.

Responses

In 2013, the UK Government launched the Energy Company Obligation (ECO) scheme to reduce fuel poverty through energy efficiency. This programme operates by mandating large and medium energy suppliers to deliver energy efficiency measures to homes in the UK. Each supplier must achieve a proportion of the total ‘Home Heating Cost Reduction Obligation’ (HHCRO) based on their share of the domestic energy market. Households can apply for the programme if the property is EPC band D-G and they meet certain criteria, such as low-income households or specific medical conditions that can be adversely affected by the cold. To ensure eligible households are aware of the programme, local authorities can sign up to identify and refer eligible households to receive energy efficiency improvements under ECO.

The ECO programme implements a phased approach to allow a learning and evaluation process. It is currently in the last phase, ECO4 (2022-2026), which introduces a buy-out option for smaller energy suppliers to mitigate disproportionate costs.

Find out more: World Economic Forum