Revealed: the impact of rising energy costs on home improvement

energy efficiency dial in house
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Energy UK and One Home have published research into what energy efficiency improvements, if any, people made to their homes following recent increases in energy costs.

Although energy prices have now dropped slightly from the record highs of 2022, last year households still saw bills remain at more than double their pre-crisis level.

Despite this, the polling results show that more than two-thirds of people did nothing to improve the energy efficiency of their homes in 2023, due to upfront costs. Even during a period of high energy costs, it is clear that energy efficiency is not seen as a financially viable solution for the majority of individuals.

The results also showed that private and council tenants were less likely to have made energy efficiency improvements in 2023 than homeowners, with the majority stating they could not make significant changes to their rented homes.

The poll also revealed particular areas of focus for enhancing energy efficiency across the UK, including improving access to financing and information and increasing support for particular types of households, especially tenants.

Financing energy efficiency improvements was a key reason given as to why people didn’t upgrade their homes’ energy efficiency with over 35% of people stating they couldn’t afford the upfront cost. Meanwhile, one in 10 people stated that energy efficiency improvements were not worth the upfront investment. This is even though energy efficiency can save hundreds on energy bills per year and even pay for itself in just a few years.

Energy UK’s Deputy Director, Charles Wood, said:

It is concerning to see so few people improving energy efficiency, especially during a period of high energy costs. The cheapest energy is that which we don’t use, but many households still waste money and energy when heating their homes. The UK has some of the draughtiest housing stock in Western Europe, and this is having both financial and health implications for many people – and is especially unfair to those who rent and are therefore unable to make changes to their homes.

Government campaigns and support schemes are welcome, and energy suppliers have delivered measures for many consumers under these existing schemes, but we need to go much further and faster. There are many ways that Government and industry can work together to ensure people can access accurate advice and information regarding the finance options available to them. Likewise, it is important that it is as easy as possible for individuals to implement the right choices for them – because the sooner action is taken, the more people can save.

With an upcoming general election, the current and next Governments must act on energy efficiency. This is not only vital to maintaining energy security and the UK’s momentum in cutting carbon emissions, but crucial to improving the health and wellbeing of people across the country.

One Home’s Chief Executive, Angela Terry, said:

What people are telling us from this survey is that they are not investing to make their homes warmer and cosier because they don’t believe energy efficiency is worthwhile financially. However, the opposite is true. Simple measures, such as draft proofing and hot water cylinder jackets, can pay back in less than a year. Meanwhile loft insulation in a typical home pays back in three years. Even if you plan to sell your house, insulation will improve the EPC and therefore the value of your home, so energy efficiency measures are always worthwhile to cut costs and carbon.

Energy UK is calling for politicians to commit to:

  • Expanding eligibility and the number of potential measures delivered under the Great British Insulation Scheme and Energy Company Obligation, and working to ensure long-term certainty in the future of subsidy and obligations to enable sustainable growth in the market and supply chain for energy efficiency.
  • Delivering measures to improve the energy efficiency of the private rented sector, including introducing a gradually increasing requirement for a minimum EPC rating for rental properties, and improving information and support for landlords and tenants.
  • Reviewing taxation and wider fiscal measures to incentivise energy efficiency improvements, including expanding temporary VAT exemptions for energy efficient materials and technologies, reviewing the wider approach to taxation surrounding energy efficiency, and introducing Stamp Duty relief for homes where energy efficiency has been improved.
  • Assessing the supply chain and skills requirements surrounding energy efficiency and low carbon heat, re-assign existing skills funding to increase the number of trained installers in the UK and working with industry to deliver sustainable growth in both supply and demand.
  • Working in collaboration with the energy industry to enhance engagement and information provision for consumers about available energy efficiency measures and applicable funding schemes.
  • Working in collaboration with the energy and financial sectors to develop more and better options for green finance to reduce the barrier presented by upfront costs of energy efficiency.
  • Increasing the level of funding assigned to the Boiler Upgrade Scheme, enabling more households to take on measures under the scheme following the recent uplift of the grant level for each measure.