UK plans £1bn insulation scheme for low-income homes

The UK government is reportedly working on a project to help low-income households insulate their homes, in order to protect them from the cost of living crisis.

The plans would require the government to remove £1bn in funding from other initiatives in order to expand the Energy Company Obligation scheme, which helps fuel-poor customers insulate their homes. The expansion is expected to allow middle-income households to access the programme.

According to The Times, the funds necessary for the project might be taken out of the Public Sector Decarbonisation scheme, which aims to increase the energy efficiency of schools, hospitals and other public buildings.

“The fastest and simplest way to tackle the cost-of-living crisis is to invest in insulation which has the potential to save £150-£400 off energy bills – an investment to permanently bring down bills year after year,” said Chris Skidmore, a Tory MP and founder of the Net Zero support group. 

The UK is currently facing a cost-of-living crisis, with inflation hitting historic levels. The rising prices of energy bills – prompted by the Russian invasion of Ukraine – is the main catalyst of this situation, which could leave as many as 40 per cent of British families facing fuel poverty in the winter.

After energy regulator Ofgem announced an expected rise in the energy price cap in October 2022  “in the region of £2,800”, companies pleaded for the government to invest in making homes in the UK more energy efficient. 

Michael Lewis, E-on’s CEO, said the country needs “a massive ramp-up” in insulation and other energy-efficiency projects, in order to help slash bills and carbon.

“Our plea to the government has always been to push hard on energy efficiency, because that’s the proven way, the only silver bullet, for this crisis,” he told MPs on the Environmental Audit Committee. “It will reduce prices, reduce energy consumption and contribute to net-zero on a sustainable basis.”

Currently, the UK has the leakiest housing stock in Europe, with as many as 19 million homes requiring better insulation. Insulating all these homes is expected to save the equivalent of six nuclear power plants’ worth of energy, according to Lewis.

“We have to start now,” he said. “And importantly we have to send a signal to the supply chain that it’s worth training up the people, it’s worth investing in the workforce and the skills and all that entails.

Lewis also called for a bigger scheme that can help provide the funding up front for those who can afford to pay for their own upgrades. This could be done by attaching the costs to mortgages or the money would be clawed back over time as homeowners save on their bills.