Charity has welcomed proposals to introduce a ‘Default Tariff Cap’ on domestic energy bills to address fuel poverty, yet says additional financial support is needed to improve efficiency of homes
The National Energy Action (NEA) charity is calling for fresh investment to improve the energy efficiency of UK homes and their heating systems as a means to more effectively address fuel poverty around the UK.
The organisation has argued that greater financial support to improve efficiency would be the best way to tackle ambitions to reduce energy costs for homes as well as lowering carbon emissions for functions such as heating in line with a number of national environmental strategies.
Calls for fresh funding into domestic energy efficiency have been made in response to proposals from Ofgem for a ‘Default Tariff Cap’ on domestic energy bills.
Ofgem has said that the cup is intended to protect 11 million homes deemed to be on “poor value tariffs” by ensuring that suppliers must cut prices to a level that it inline with, or below the new limit that is presently intended to be £1,136 a year.
NEA chief executive Adam Scorer said the proposals were a corrective shock to the energy market that would likely benefit millions of consumers. However, he said that the proposals alone would not be sufficient to remedy the issue of severe fuel poverty.
Mr Scorer said, “The cap is designed to benefit around 11 million Standard Variable Tariff (SVT) customers who don’t, or can’t, engage in the market. They have paid a ‘loyalty premium’ for years and Ofgem is right to tackle it head-on. But, while fuel poor households on SVTs will benefit, there are important questions that need to be addressed in the consultation about whether the inclusion of new policy costs in the future may mean some low-income households could get a worse deal.”
“Many fuel poor households are more than £1,000 short of being able to afford a warm, dry and healthy home. So this broad tariff protection for the many must be accompanied by a deeper consideration of those already protected by the existing Safeguard Tariff, and more enduring support for those who are condemned to cold, damp, unhealthy homes.”
NEA said it also hoped Ofgem would ensure that consumers were put first in any cases where the Default Tariff Cap is being reviewed in future.
The charity has also asked for ongoing commitments to keep a safeguard tariff designed for vulnerable customers alongside the introduction of the Default Tariff Cap. It also called for an extension of the tariff to include claimants of the Warm Homes Discount.