Smarter, greener, cheaper: joining up domestic energy efficiency policy

Document type
Newey, Guy
Policy Exchange
Date of publication
17 January 2013
Poverty Alleviation Welfare Benefits and Financial Inclusion
Social welfare
Material type

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Reducing energy use and improving the energy efficiency of the UK's homes could provide some of the cheapest ways of meeting the country's carbon targets, as well as helping householders to counter the effect of rising energy bills. This report looks at potential improvements to current energy policy to reduce energy waste in the domestic sector.

The report proposes extending an energy efficiency subsidy scheme - the Energy Company Obligation (ECO) - to allow schemes that can help households to cut energy use to compete for subsidies against support for existing measures such as solid wall insulation. Eligible schemes could include home energy visits that show people where they are wasting energy, better leaflets on how to cut bills or comparisons of energy use. In practice, energy companies would allow households to anonymously join the scheme which would let them compare their bills with people living in similar size properties.

This would create a real and competitive energy efficiency market which would allow charities and other experts in energy savings to compete for part of the subsidy alongside bigger energy companies. The report found that schemes that changed how households used energy were more than seven times cheaper than building new power generation. Such schemes also offer a potentially cost-effective way of cutting carbon emissions.

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