UK-GBC Task Group Report: Retrofit Incentives
This report produced by the Retrofit Incentives Task Group examines financial incentives to increase the uptake of domestic energy efficiency measures. It outlines proposals for the three most promising incentives - variable Stamp Duty, variable Council Tax and an Energy Efficiency Feed-in-Tariff - and includes economic analysis of their potential impacts.
Retrofitting the UK’s poorly insulated and energy inefficient housing stock offers enormous opportunities, in both economic and environmental terms. In 2010 Government suggested that a radical overhaul in the energy efficiency of homes and small businesses could catalyse some £7 billion of investment annually and create up to 250,000 jobs by 2030.
Yet the scale of the challenge is equally large. It is estimated that an average of one home retrofit per minute will need to be carried out between now and 2050 if the UK is to meet its legally binding climate change target of reducing emissions by 80 per cent mid-way through the century. Unfortunately, the Committee on Climate Change recently reported that the UK was some way off meeting the targets set in its carbon budgets, in part because emissions from the building stock remain stubbornly high.
At the heart of the Government’s efforts to encourage energy efficiency is the Green Deal, the Coalition’s flagship climate change policy, which officially launched in January 2013. Central to the policy is a finance mechanism which allows consumers to install energy efficiency measures at no up-front cost, instead paying for the measures from the savings on energy bills.
The UK Green Building Council (UK-GBC) has long been a supporter of this market mechanism for encouraging domestic energy efficiency – from its inception as ‘Pay As You Save’ under the previous Government through to the Coalition’s implementation of the policy as the Green Deal. The scheme has real potential to tackle key market barriers, helping to underpin a retrofit revolution across the UK - cutting carbon, reducing energy demand, stimulating the construction sector and protecting against rising energy bills. However, as long ago as 2009, UK-GBC recommended that the scheme would only really succeed if there were sufficient incentives in place to encourage take-up.