Energy efficiency is higher in poorer neighbourhoods

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Hazel Davis spoke to researchers from the University of Glasgow’s Urban Big Data Centre and University College, London, to find out about  energy efficiency differences across the UK’s housing stock.

The UK’s energy efficiency landscape is complex and messy. There is a whole range of preconceived notions around its distribution and a set of conflicting beliefs around whose intervention is most useful. But local authorities, despite their limited resources, could be key players in coordinating and enhancing these efforts. 

Researchers from the University of Glasgow’s Urban Big Data Centre and University College, London have been working on a way to understand whether there are systematic differences in energy efficiency between affluent and less affluent neighbourhoods, different property tenures and the progress made by local authorities. And the results are revealing – and not necessarily expected. 

Energy efficiency higher in poorer neighbourhoods

“We initially expected areas with a lot of social housing to perform well because such properties can be retrofitted at scale by a single landlord,” says Dr Buyuklieva from UCL, “However, once we removed the intervention component, I wasn’t sure how other neighbourhoods would fare. Interestingly, our analysis showed that energy efficiency is slightly higher in poorer neighbourhoods when we control for property mix.”

This, says Bailey, director of the Urban Big Data Centre, suggests a policy success: “Energy efficiency programmes seem to be effectively targeting those in most need. However, it also indicates that more affluent households are not using their extra resources to buy or improve energy-efficient homes.”

Private landlords not always climate baddies

Surprisingly, the researchers found that private landlords do not have less efficient properties on average. This, says Bailey, “challenges the ‘split incentive’ argument, which posits that landlords are less likely to invest in energy efficiency because they don’t benefit directly from lower utility bills.” It seems that tenants may be choosing properties with better energy efficiency, indicating that there is some incentive for landlords to invest in improvements.

Local authorities have limited power

You would expect the role of local authorities to make a difference in regional variation, with some performing better than others. However, the researchers say they found little difference. This, they suggest, may reflect the impact of austerity measures that have somewhat limited the capacity of local authorities to act beyond their essential services. “Local authorities have the potential to coordinate local energy efficiency efforts effectively,” says Dr Buyuklieva, “They could serve as a hub for consultations, connect residents with local tradespeople and provide tailored recommendations for property improvements. However, they currently lack the resources to play this role comprehensively.”

Policy recommendations and future directions

The research highlights the importance of targeted policy programmes and the need for a dual approach to incentivising energy efficiency among different income groups. 

For lower-income households, continued support through targeted programmes appears effective, according to the research. For higher-income households, Dr Buyuklieva suggests that either pricing or regulation could encourage more investment in energy-efficient homes: “Charging more for energy could make retrofitting financially beneficial but it might also harm lower-income households,” she says, “An alternative is setting minimum energy efficiency standards, particularly for new homeowners (a model currently being explored by the Scottish Government). This approach could factor energy efficiency upgrades into the cost at the point of purchase, potentially alleviating the burden on current owners.”

This research just touches the surface of understanding the variations across the UK and the pair is already embarking on new research projects around understanding how energy efficiency impacts things like property values. Specifically,” says Bailey, “we want to see if there’s a growing premium for energy-efficient homes as people become more aware of their environmental and financial benefits.” They’re also working with local government partners to better understand local area energy plans and identify and address the bottlenecks preventing substantial energy efficiency improvements on a community level.

Read the full study here.