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Fuel poverty committee backs lower income support for renewable heat

Organisation’s annual report calls for expansion of Renewable Heat Incentive (RHI) programme to step financial support for overhauling heating in fuel poor homes

The Committee on Fuel Poverty has called for fresh financing to support heating installations to aid help lower income homes adopt more renewable forms of heat.  The Non-Departmental Public Body that advises government on fuel poverty issues is also backing the creation of additional consumer protection measures to encourage up take of renewable systems.

Findings in the committee’s latest annual report recommend expanding the focus of the government’s Renewable Heat Incentive (RHI) programme via an ‘assignment of rights’ mechanism. This would ensure fuel poor households may implement heating solutions powered from renewable energy sources.

Despite these calls, the report did express encouragement over a recent response from the government to a consultation on the future of RHI that discussed helping householders with lower incomes to overcome the initial cost barriers of renewable heating systems.

An estimated 2.5 million households were deemed as being ‘fuel poor’ in 2017, according to trade association Oftec. Fuel poor homes are defined as properties where 10 per cent of annual income is spent on powering heating systems.

The Committee on Fuel Poverty’s 2017 annual report has highlighted the need to secure funding to improve energy efficiency in these fuel poor homes, such as by incentivising new heating systems.

“£15.4bn of funding will be required to install the necessary energy efficiency measures in fuel poor households,” said the findings.

The committee also said it welcomed the government’s pledge in its June 2016 Energy Company Obligation (ECO) consultation to make future programmes more focused on addressing fuel poverty in homes alongside its focus on energy efficiency.

However, the report claimed that only an estimated £1 billion could be made available up to the end of the ECO programme in September 2022 to support this work.

“To provide confidence for energy efficiency manufacturing and installation companies to invest and to avoid a heavy back-loading of delivery, early action is needed by government to ensure the availability of the necessary funds,” added the findings.

The report outlines a number of recommendations to address fuel poverty. This included extending the ECO scheme up to 2030 with clear focus on tackling fuel poverty to address potential funding gaps.

UK progress

The Committee on Fuel Poverty has also backed creating incentives for landlords to invest on energy saving technology such as through the reintroduction of a so-called ‘Landlord’s Energy Savings Allowance’. This was a tax allowance offered to landlords on “energy saving expenditure”.

“We also recommend a national landlord licensing scheme and that local authorities have adequate resources to monitor and take enforcement action,” said the report.

The National Energy Action (NEA) charity welcomed the report’s findings.  Progress was noted by the charity in the UK’s ability to meet fuel poverty strategy ‘milestones’ focused on creating more energy efficient homes.

However, it argued that there was still risk that the most fuel poor households could still continue to suffer from inefficient heating well into the next decade and beyond.

“Like the committee, we now want to see the UK government re-target existing schemes on those that need the most support and, where needed, commit to additional investment to achieve our national goals,” said the NEA.

“The good news is there is strong cross-party consensus on the need for more ambitious policies. There is also a strong case for central investment and domestic energy efficiency should be regarded as a hugely important infrastructure priority,” said the NEA. “This would help the UK and national governments meet their fuel poverty and carbon targets and more generally will reduce the cost to energy consumers of the transition to a low carbon energy system as well as creating economic growth in all parts of the UK. This approach is also supported by a growing number of Non-Departmental Public Bodies, academics, industry and NGOs”.

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