tag:theconversation.com,2011:/global/topics/energy-bills-44538/articlesEnergy bills – The Conversation2024-02-06T15:51:10Ztag:theconversation.com,2011:article/2212822024-02-06T15:51:10Z2024-02-06T15:51:10ZFuel poverty: as government support dries up, communities are taking action<figure><img src="https://images.theconversation.com/files/573777/original/file-20240206-22-xvyur2.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4928%2C3260&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A cooperative in southern England installed solar panels on flats and used the revenue to fund energy-efficient improvements.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/roof-mounted-solar-panels-manchester-england-394391113">Marcin Wos/Shutterstock</a></span></figcaption></figure><p><a href="https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/more-than-two-million-people-will-be-cut-off-from-their-gas-and-electricity-this-winter-because-they-cant-afford-to-top-up-citizens-advice-warns/">More than two million people</a> will be cut off from their gas and electricity this winter because they can’t afford to top up their prepayment meter. That’s according to a report from the charity Citizens Advice, which says it is helping more people than ever who cannot pay for energy.</p>
<p><a href="https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/whoismostlikelytoliveinhomesthatarehardertokeepwarm/2023-12-14">Data</a> from the Office for National Statistics (ONS) suggests that lone parents (75%), renters (60%), disabled adults (54%), and Black, African, Caribbean, or Black British adults (58%) are more likely to report difficulties in affording their energy payments compared to the national average of 43%.</p>
<p>Underlying all the vulnerable groups who will struggle to keep warm this winter is class. Apart from people aged 65 years and over (who are also more likely to live in homes with lower energy efficiency and so consume more gas and electricity as a result) those most affected by <a href="https://www.theyworkforyou.com/debates/?id=2024-01-16c.676.5">fuel poverty</a> are people who live payday to payday and have very little savings, if any. Race sometimes becomes a factor as government <a href="https://www.ethnicity-facts-figures.service.gov.uk/work-pay-and-benefits/pay-and-income/household-income/latest/">figures</a> show that Black households (54%) are most likely out of all ethnic groups to have a weekly income of less than £600 (US$760).</p>
<p>Soaring heating expenses, stagnating or declining wages and poorly maintained housing have marred millions of lives with debt and poor health. <a href="https://www.endfuelpoverty.org.uk/about-fuel-poverty/excess-winter-deaths-and-fuel-poverty/">Estimates</a> suggest that 10% of excess winter deaths are directly attributable to fuel poverty and 21.5% to cold homes.</p>
<p>So what support is available – and what is actually needed?</p>
<h2>National schemes don’t go far enough</h2>
<p>The government energy bill support <a href="https://www.gov.uk/get-help-energy-bills/getting-discount-energy-bill">scheme</a> gave every household a £400 discount on their energy bills for winter 2022-2023. This ended in March 2023. Now some households could get £150 off their electricity bill (or added to their prepayment meter) for winter 2023-2024 under the <a href="https://www.gov.uk/the-warm-home-discount-scheme">warm home discount scheme</a>.</p>
<p>This discount should be automatically applied to your bill, meaning there is no need to apply for the scheme if you are getting the guarantee credit element of <a href="https://www.gov.uk/the-warm-home-discount-scheme/guarantee-pension-credit">pension credit</a> or are on a low income and live in <a href="https://www.gov.uk/the-warm-home-discount-scheme/low-income-England-Wales">England and Wales</a>. You may need to apply for it if you are eligible and live in <a href="https://www.gov.uk/the-warm-home-discount-scheme/low-income-scotland">Scotland</a>, however.</p>
<p>The Citizens Advice <a href="https://www.citizensadvice.org.uk/consumer/energy/energy-supply/get-help-paying-your-bills/grants-and-benefits-to-help-you-pay-your-energy-bills/">website</a> has useful information on grants and benefits to help with paying energy bills in England. Your local council may have other schemes so it is <a href="https://www.gov.uk/find-local-council">worth checking</a>. </p>
<figure class="align-center ">
<img alt="A paper electricity bill." src="https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/573780/original/file-20240206-22-ne8gjq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">UK energy bills have remained high for the last two years.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/paper-electricity-bill-cost-increasing-notice-2132985595">Jevanto Productions/Shutterstock</a></span>
</figcaption>
</figure>
<p><a href="https://link.springer.com/referenceworkentry/10.1007%2F978-3-319-69625-6_124-1">Research</a> I conducted with others has shown that what support is available is inadequate. People may be unaware of their eligibility for the warm home discount and struggle to contact their energy supplier, as is sometimes required in Scotland. They may also be loath to contact their local authority for information on nearby “warm spaces” – public places that anyone can use to stay warm, like libraries.</p>
<p>Eligibility itself poses a problem because people in need often miss out due to narrowly defined criteria that excludes people on marginally higher incomes or who are self-employed. Inaccurate government data and flawed disability assessments are also an issue.</p>
<h2>Warm communities</h2>
<p>Fuel poverty is a devolved policy area in the UK, meaning that powers and funding rest with local government. But our <a href="https://link.springer.com/referenceworkentry/10.1007/978-3-319-69625-6_124-1">research</a> shows that people in poverty and ethnic minority groups often do not trust city councils and local political representatives.</p>
<p>Fortunately, others are taking action. <a href="https://communityenergyengland.org/pages/what-is-community-energy">Community Energy England</a>, a not-for-profit company, <a href="https://communityenergyengland.org/pages/who-we-are">provides</a> <a href="https://communityenergyengland.org/how-to-pages/data-digital">free</a> <a href="https://communityenergyengland.org/how-to-pages/community-energy-fortnight-2023-resources">resources</a> for people who want to start <a href="https://communityenergyengland.org/how-to-pages/getting-started-with-community-energy">community energy projects</a>. One <a href="https://communityenergyengland.org/how-to-pages/case-studies">example</a>, <a href="https://www.brightonenergy.org.uk/">Brighton Energy Co-op</a>, has invested in the <a href="https://www.brightonenergy.org.uk/home/our-projects/">installation of solar panels</a> on <a href="https://www.brightonenergy.org.uk/home/our-projects/">buildings</a>, ranging from schools to blocks of flats and even a football stadium. Money raised from selling this electricity has helped repay investors and funded insulation and other energy efficiency improvements for vulnerable people. </p>
<p>Energy efficiency experts <a href="https://www.groundwork.org.uk/greendoctor/">Groundwork’s Green Doctors</a> also give vulnerable <a href="https://www.groundwork.org.uk/greendoctor/our-partners/">people</a> (remotely and in person) useful tips on how to <a href="https://www.groundwork.org.uk/london/saving-resources/">save energy</a> and where to find discounts. Their <a href="https://www.groundwork.org.uk/london/green-doctors-help-residents/">advice</a> includes demonstrating how to put reflective panels behind radiators so that more heat is kept within rooms instead of being lost through walls.</p>
<p>The <a href="https://www.fuelbankfoundation.org/">Fuel Bank Foundation</a> provides emergency credits for people whose prepayment meters run out. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1749827902818959515"}"></div></p>
<p>All of this work is helpful because <a href="https://www.southampton.ac.uk/news/2023/12/homes-hit-hardest-by-fuel-poverty-not-benefiting-from-government-scheme.page">research</a> shows that households in the areas hardest hit by fuel poverty are not benefiting the most from government programmes.</p>
<h2>More help is needed</h2>
<p>People should not be dying as a result of <a href="https://www.nea.org.uk/news/fuel-poverty-charity-reveals-45-people-per-day-die-from-cold-homes/">cold homes</a> in a country as wealthy as <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?most_recent_value_desc=true">the UK</a> and given the statistics, the government ought to implement a programme of targeted benefits for elderly people with disabilities, addressing the extra costs related to disability and care needs. </p>
<p>Our <a href="https://www.researchgate.net/publication/352126874_Ethnic_Poverty_Causes_Implications_and_Solutions">research</a> also indicates that higher unemployment rates, low wages, and limited career progression in low-paid sectors frequently ends in fuel poverty, particularly among people in lower socioeconomic classes and especially those from Black communities.</p>
<p>Tackling fuel poverty requires <a href="https://energyforall.org.uk/">diverse</a>, long-term solutions. The support currently offered should expand to involve community-led approaches to improve energy efficiency and help those in dire need.</p>
<hr>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>Tolu Olarewaju does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Energy bill discounts have failed to meet the scale of the problem, research shows.Tolu Olarewaju, Economist and Lecturer in Management, Keele UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2201302024-01-11T01:22:04Z2024-01-11T01:22:04ZHow do I use air conditioning efficiently? Is it better to blast it briefly throughout the day, or just leave it on?<figure><img src="https://images.theconversation.com/files/566466/original/file-20231219-19-4ygs6p.jpg?ixlib=rb-1.1.0&rect=0%2C49%2C6594%2C3820&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/side-view-pleasant-young-woman-using-1809678175">fizkes/Shutterstock</a></span></figcaption></figure><p>Despite so many people having air conditioning at home now, many are still unsure how to use it efficiently. And air conditioning uses a lot of energy. For example, running all the lights in an average home all day and night consumes about the same energy as one hour of air conditioning of the same space. </p>
<p>Many people think they can save money and energy by just blasting the air conditioning at a very low temperature, such as 17°C, for a short period of time to chill the room – before switching it off and enjoying the chilled air until another blast is needed later on. But it requires a <em>lot</em> of energy to get a room to a very chilly temperature.</p>
<p>While running it briefly and intermittently at a very cool temperature may feel thrifty, it won’t be the most energy efficient choice. Here’s what to do instead.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/heat-pumps-can-cut-your-energy-costs-by-up-to-90-its-not-magic-just-a-smart-use-of-the-laws-of-physics-185711">Heat pumps can cut your energy costs by up to 90%. It’s not magic, just a smart use of the laws of physics</a>
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<h2>Start by reducing how hot your home gets</h2>
<p>First, try to minimise the need for air conditioning. Look for ways to stop your house getting hot in the first place.</p>
<p>Heat can come in from outside through surfaces such as walls, windows, and ceilings. Hot air can creep in under doors or through open windows and vents. Appliances and people inside can also generate heat (although the heat impact of people is generally relatively small, unless there’s a large group).</p>
<p>To reduce some of this heat, you can:</p>
<ul>
<li><p>close blinds and windows before it starts getting hot</p></li>
<li><p>use draft stoppers around external doors to stop hot air wafting inside</p></li>
<li><p>plant trees (deciduous trees will let sunlight through in winter)</p></li>
<li><p>install external shading, particularly on north and western aspects of your house</p></li>
<li><p>improving ceiling and wall insulation, window glazing and sealing (if time and budget allow)</p></li>
<li><p>reduce use of the oven and cooktop on very hot days (more efficient appliances, however, reduce this heating effect and save energy).</p></li>
</ul>
<p>Rooftop solar systems provide a dual benefit of adding shade on the roof to stop heat coming in that way, as well as offsetting power usage.</p>
<p>If you’re in a double storey house, the lower level can be a few degrees cooler; it can help just to hang out downstairs on a very hot day. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/spare-a-thought-for-air-conditioning-repair-people-as-the-planet-warms-theyre-really-up-against-it-187143">Spare a thought for air-conditioning repair people. As the planet warms, they're really up against it</a>
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</em>
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<hr>
<h2>Set your air conditioning to the highest level that’s comfortable</h2>
<p>Turning our attention to the air conditioning unit itself, the most energy efficient action is to set the temperature to the highest value that’s still comfortable (26°C during the day and 22°C when sleeping is often recommended). Then, just let it run.</p>
<p>Modern units (that feature technology known as an “inverter”) will adjust their output efficiently to maintain the indoor temperature at the setting you’ve chosen.</p>
<p>Be careful, however; setting the temperature too low can result in the unit using more power than you think it’s using (based on star rating label).</p>
<p>Older non-inverter units will cycle on and off to maintain the temperature, and you will generally be able to hear and feel it going on and off. (The newer inverter units, by contrast, don’t tend to cycle on and off as much; they usually just stay on and continuously modulate their output). </p>
<p>For non-inverter units, in general, remaining on for much longer than it is off indicates the air conditioning is working very hard. This may suggest the unit is too small for the space you’re trying to cool, or that you just have a lot of heat in the house (are you cooking a roast?). It could also suggest a fault.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man points his AC remote at the AC unit on the wall." src="https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/566479/original/file-20231219-21-f8b8pz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">It’d be better to close the blinds before you start thinking about using the air conditioner.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-remote-control-air-conditioner-creates-2161368775">Studio Romantic/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Ceiling fans and servicing can help</h2>
<p>Regardless of the type of air conditioning you have, for each 1°C the temperature is lowered, <a href="https://www.yourhome.gov.au/energy/heating-and-cooling">energy use increases by 5 to 10%</a>. So it’s important not to over-cool. That’s why repeatedly blasting the air conditioning at a very low temperature over the course of the day isn’t wise. </p>
<p>Using ceiling fans along with air conditioning can make things feel cooler by <a href="https://www.nathers.gov.au/publications/validation-nathers-software-tropical-regions">2-3°C</a> due to the air movement, meaning you can set your air conditioning at a higher temperature. Fans use minimal power compared to air conditioning.</p>
<p>Clean the air filters regularly (your manual will explain how) and make sure air grills and vents are not blocked by furniture or, for outdoor units, by vegetation.</p>
<p>If parts of your outdoor units are heavily corroded or badly bent, the unit likely won’t work as well. Animals can cause damage to outdoor units but parts can often be easily replaced.</p>
<p>If your air conditioning doesn’t seem to work well, makes unusual sounds, or if fault codes show up on the display unit, get it serviced.</p>
<p>And if a cool change comes through, switch off the air conditioning and open as many windows and doors as possible to allow the breeze to flow through the house.</p>
<p>If you have a time-of-use electricity tariff (it’ll say on your electricity bill if you do), reducing use in the afternoon and early evening can save a lot. Energy prices can be double or more at these times.</p>
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<a href="https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person turns on a ceiling fan." src="https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/566471/original/file-20231219-27-d4eqa7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Using fans along with AC can help cool the room more.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/electric-irony-ceiling-fan-woman-hand-1304819284">Semachkovsky/Shutterstock</a></span>
</figcaption>
</figure>
<h2>An efficient unit can save you money in the long run</h2>
<p>When it comes time to replace your air conditioning, carefully consider the <a href="https://www.energyrating.gov.au">energy efficiency or star rating</a>.</p>
<p>The more stars the better; even a half star higher could more than pay for itself over the life of the unit (especially if you also use it in winter for heating).</p>
<p>Several state governments also have incentive schemes that can help cover the cost of upgrades or replacements.</p><img src="https://counter.theconversation.com/content/220130/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Goldsworthy works for CSIRO, which researches air conditioning as well as performing Minimum Energy Performance Standards testing of air conditioning systems for the Department of Climate Change, Energy, the Environment and Water, and providing the energy rating method used in the NatHERS residential building energy rating software. However, CSIRO is unlikely to receive any direct benefit from this article.
</span></em></p>While running it briefly and intermittently at a very low temperature may feel thrifty, it will not be the most energy efficient choice. Here’s what to do instead.Mark Goldsworthy, Senior Research Scientist, CSIROLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2191132023-12-05T19:24:05Z2023-12-05T19:24:05ZAustralian homes can be made climate-ready, reducing bills and emissions – a new report shows how<figure><img src="https://images.theconversation.com/files/563535/original/file-20231205-25-yz4yen.jpg?ixlib=rb-1.1.0&rect=31%2C5%2C3463%2C2321&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/interior-view-house-attic-under-construction-379565095">ronstik, Shutterstock</a></span></figcaption></figure><p>Millions of homes were built before Australia introduced housing <a href="https://www.dcceew.gov.au/energy/energy-efficiency/buildings/residential-buildings">energy efficiency standards</a> in 2003. They’re leaky. Gaps around windows, doors and between building materials allow air to move in and out. So people tend to compensate, with more heating and cooling. It’s costly and damaging for the environment. </p>
<p>Using a national sample of 102,000 Australian homes across all 69 climate zones, we identified the most common housing types. Then we worked out how to make them “climate ready” and what benefits would flow. </p>
<p>Our <a href="https://www.climateworkscentre.org/resource/climate-ready-homes-building-the-case-for-a-renovation-wave-in-australia/">new report</a> released today makes a strong case for a renovation wave across Australia. </p>
<p>By combining thermal upgrades with electrifying hot water and cooking appliances, households can shave up to $2,200 a year off their energy bills. And the nation will be closer to reaching net zero emissions by 2050. </p>
<p><iframe id="tc-infographic-973" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/973/534c98def812dd41ac56cc750916e2922539729b/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Paying for poor performance</h2>
<p>Australians are paying for low-performing homes through their energy bills, and the cost extends well beyond the kitchen table. </p>
<p>Low-performing homes draw more energy from the grid as heating and cooling systems work in overdrive to keep indoor temperatures safe or even comfortable. </p>
<p>Home interiors often look stylish, which contributes to making us feel comfortable. But there’s more to it than that. </p>
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<p>A home’s performance, and its energy bills, comes down to just a few appliances. That is, those used to heat the hot water, and to heat or cool individual rooms. </p>
<p>In summer, air conditioners need to run for long periods if the ceilings, floors, walls and windows cannot stop the cool from escaping or the Sun’s heat from building up inside. </p>
<p>Multiply poor energy performance across Australia’s housing stock of nearly 11 million homes, and you start to see the scale of inefficiency before us.</p>
<p>We clearly need to improve the energy performance of all low-performing homes.</p>
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Read more:
<a href="https://theconversation.com/on-hot-days-up-to-87-of-heat-gain-in-our-homes-is-through-windows-on-cold-days-its-40-of-heat-loss-heres-how-we-can-fix-that-212117">On hot days, up to 87% of heat gain in our homes is through windows. On cold days, it's 40% of heat loss. Here's how we can fix that</a>
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<h2>What’s the solution?</h2>
<p>To reach net zero emissions by 2050 or earlier, all sectors of the economy need to rapidly cut emissions. According to the <a href="https://www.climateworkscentre.org/resource/climateworks-centre-decarbonisation-scenarios-2023-australia-can-still-meet-the-paris-agreement/">latest Climateworks Centre modelling</a>, decarbonising buildings – responsible for <a href="https://www.dcceew.gov.au/energy/energy-efficiency/buildings/residential-buildings">10% of national emissions</a> – is vital if Australia is to uphold its commitments under the <a href="https://www.dcceew.gov.au/climate-change/international-climate-action#toc_0">Paris Agreement</a>.</p>
<p>In 2050, most Australians will be living in homes that already exist today, making renovations an essential part of achieving net zero.</p>
<p>We worked together for more than a year to understand Australia’s residential building stock, how these homes perform and what it would take to get them to a <a href="https://www.climateworkscentre.org/resource/renovation-pathways-defining-zero-carbon-homes-for-a-climate-resilient-future/">zero-carbon standard</a>.</p>
<p>With 69 separate climate zones and millions of homes, Australia’s housing profile looks different depending on the city or town you live in. Townhouses in Brisbane, freestanding houses in Darwin and apartments in Perth can all be made climate-ready, but they can get there in very different ways.</p>
<p>We analysed <a href="https://ahd.csiro.au/">data from 102,000 homes</a>, examining floor, wall and building materials that are key to energy performance. We found just 16 types of homes make up most Australian housing stock. </p>
<p>The most common “archetypes” can be turned into net zero carbon homes with either a quick fix, modest or full climate-ready upgrade. <a href="https://www.climateworkscentre.org/project/renovation-pathways/">The Renovation Pathways project</a> allows us to show how 80% of houses and townhouses, and most apartments, across Australia’s climate zones can be made climate-ready.</p>
<p>Our analysis shows a “thermal-first” approach – improving air tightness and insulation in roofs, walls and floors – optimises benefits from rooftop solar and electrification.</p>
<p>For example, freestanding houses represent 70% of Australian homes. Houses with lightweight walls such as weatherboard or brick veneer – along with a framed roof and either a concrete slab or suspended timber floor – make up nearly half of the total housing stock and are among the worst performing. </p>
<p>Upgrading the thermal performance of such houses across the country offers the biggest opportunity to reduce emissions, as well as significant household savings. </p>
<p><iframe id="93vGm" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/93vGm/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
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Read more:
<a href="https://theconversation.com/budgets-energy-bill-relief-and-home-retrofit-funding-is-a-good-start-but-dwarfed-by-the-scale-of-the-task-205380">Budget's energy bill relief and home retrofit funding is a good start, but dwarfed by the scale of the task</a>
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<h2>Show me the money</h2>
<p>When combining thermal upgrades with electrifying hot water and cooking appliances, people living in detached houses could save on average between $1,850 and $2,200 a year off their energy bills.</p>
<p>Occupants of townhouses could save between $1,270 and $1,480 a year, and occupants in apartments between $1,030 and $1,200 a year.</p>
<p>As well as much-needed emissions savings for Australia, zero-carbon homes would deliver much-needed savings to residents as living costs continue to rise. </p>
<p>Even low levels of insulation combined with the switch from gas to electric space conditioning can save more than two tonnes a year of CO₂-equivalent per house, compared with a low-performing home built to pre-energy efficiency standards.</p>
<p><iframe id="LQzWm" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/LQzWm/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Improving home energy performance also has positive effects for Australia’s energy grids. Efficient homes that reduce the need to turn on heating and cooling appliances for long stretches during heatwaves and cold snaps also reduce demand on the energy grid. Each low-performing home upgraded to climate-ready would contribute to reducing peak demand by between 1.4 and 3.5 kilowatts.</p>
<h2>Multiple benefits</h2>
<p>As more energy sources become electrified under the net zero transition, reducing peak demand will both help to prevent brownouts, blackouts and unexpected power outages, and reduce electricity network costs for consumers.</p>
<p>The catch is that at today’s energy prices, it would takes more for residents to break even on climate-ready upgrades. But it is an area ripe for government support. </p>
<p>Two key planning documents the federal government has committed to releasing – an update to its <a href="https://www.dcceew.gov.au/energy/energy-efficiency/buildings/trajectory-low-energy-buildings">Trajectory for Low Energy Buildings</a> and a sectoral plan for the built environment – provide the government with the opportunity to embed policy that will support a wave of energy performance upgrades. </p>
<p>If policy supports a “go fast and go all-out” approach to energy performance upgrades in homes, a self-sustaining renovation wave will ensure more and more households live in resilient, climate-ready homes.</p>
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<strong>
Read more:
<a href="https://theconversation.com/on-hot-days-up-to-87-of-heat-gain-in-our-homes-is-through-windows-on-cold-days-its-40-of-heat-loss-heres-how-we-can-fix-that-212117">On hot days, up to 87% of heat gain in our homes is through windows. On cold days, it's 40% of heat loss. Here's how we can fix that</a>
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<img src="https://counter.theconversation.com/content/219113/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gill Armstrong works for Climateworks Centre, Monash University. She receives funding from four philanthropic organisations for the Renovation Pathways program. These are: Boundless Earth, Energy Consumers Australia, Paul Ramsay Foundation, Lord Mayors' Charitable Trust.</span></em></p><p class="fine-print"><em><span>Michael Ambrose receives funding from the federal Department of Climate Change, Energy, the Environment and Water (DCCEEW). </span></em></p>Most Aussie homes are not suited to the current climate, let alone future extremes. But they can be upgraded. A new report identifies the most common housing types and benefits of renovating.Gill Armstrong, Researcher in architecture and urban planning, Climateworks CentreMichael Ambrose, Research Team Leader, CSIROLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2177552023-12-04T16:06:16Z2023-12-04T16:06:16ZHow a hybrid heating system could lower your bills and shrink your carbon footprint<figure><img src="https://images.theconversation.com/files/561383/original/file-20231123-25-iy0m0y.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7668%2C4320&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hybrid systems combine two or more technologies to heat a house.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/heat-pump-airwater-technology-home-splittype-2318255183">ThomsonD/Shutterstock</a></span></figcaption></figure><p>To heat your home without damaging the climate, you will need to replace your gas boiler. UK government advisers <a href="https://www.theguardian.com/business/2023/oct/18/uk-infrastructure-needs-much-more-investment-say-government-advisers">recommend</a> switching to appliances that run on electricity.</p>
<p>However, if a root-and-branch conversion to electric heating is too expensive, even a partial shift to “hybrid heating” can cut your energy bills and household emissions relatively quickly – although phasing out gas and oil is still essential in the long run for <a href="https://theconversation.com/for-developing-world-to-quit-coal-rich-countries-must-eliminate-oil-and-gas-faster-new-study-199649">averting climate breakdown</a>.</p>
<p>A hybrid heating system combines two or more technologies to heat a building. Typically, this involves pairing a conventional gas boiler with a renewable alternative like an electric heat pump. But there are other possibilities. For instance, roof-mounted solar panels can generate electricity to help run an immersion heater, or solar-thermal panels can complement your heat pump or boiler by making hot water.</p>
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<img alt="A diagonally mounted solar panel with a white cable." src="https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/561380/original/file-20231123-19-656ekd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Solar-thermal technology can convert solar energy into heat.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/solar-heater-green-energy-192039521">Antlio/Shutterstock</a></span>
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<p>Gas boilers supplied 92% of <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/834603/2017-18_EHS_Headline_Report.pdf">home heating</a> across the UK in 2017. <a href="https://www.nesta.org.uk/press-release/gas-boiler-emits-more-annual-co2-seven-transatlantic-flights/">Emissions</a> from the average boiler are equivalent to 2.2 tonnes of CO₂ a year, making residential heating one of the country’s biggest contributors to climate change. The UK government <a href="https://assets.publishing.service.gov.uk/media/6194dfa4d3bf7f0555071b1b/net-zero-strategy-beis.pdf">will stop</a> the sale of new gas boilers from 2035.</p>
<p>Meanwhile, heat pumps are <a href="https://www.theguardian.com/business/2023/apr/15/high-costs-and-uncertainties-cast-a-chill-over-britains-heat-pump-market">slowly</a> gaining popularity through the government <a href="https://www.gov.uk/apply-boiler-upgrade-scheme">boiler upgrade</a> scheme, which offers grants of up to £7,500 (US$9,400). Electric heat pumps convert electricity to heat very efficiently by extracting heat from the air or ground outside and transferring it to water that is pumped through radiators. </p>
<p>The <a href="https://www.iea.org/energy-system/buildings/heat-pumps">International Energy Agency</a> says that installing a heat pump can significantly lower household emissions, especially when the electricity powering it is from a renewable source like wind or solar. </p>
<h2>Is hybrid heating right for you?</h2>
<p><a href="https://www.gov.uk/government/publications/hybrid-heat-pumps-study">Hybrid heating systems</a> can bring a number of advantages: a smaller carbon footprint as well as lower bills, while increasing the energy efficiency and value of a property.</p>
<p>From 2026, hybrid heating systems will become a standard replacement for gas heating in the <a href="https://www.dutchnews.nl/2022/05/from-2026-hybrid-heat-pumps-should-be-the-norm-says-minister/">Netherlands</a>. In <a href="https://www.renewable.news/energy-transition/german-heating-industry-suggests-hybrid-solutions-to-reduce-carbon-footprint/">Germany</a>, the heating industry favours a more gradual shift from oil and gas using hybrid heating systems.</p>
<p>Heat pumps can be difficult and expensive to install in some houses. This is because they generate heat at a lower temperature to gas boilers, so larger radiators and underfloor heating may be necessary to heat a home as efficiently on particularly cold days (especially if your house is poorly insulated).</p>
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Read more:
<a href="https://theconversation.com/do-heat-pumps-work-in-the-uks-climate-an-expert-answers-your-low-carbon-heating-questions-211150">Do heat pumps work in the UK's climate? An expert answers your low-carbon heating questions</a>
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<p>Complex renovations that are often necessary to install heat pumps require additional investment and can deter homeowners, <a href="https://www.theguardian.com/business/2023/apr/15/high-costs-and-uncertainties-cast-a-chill-over-britains-heat-pump-market">obstructing</a> the roll-out of low-carbon heating.</p>
<p>If insulating your home is particularly expensive or arduous, installing a heat pump and keeping a gas boiler as a back-up for particularly cold days could still slash your household emissions while maintaining the standard of heating you’re used to. It may also give you time to save up for renovations that can help you make the final shift to an all-electric system.</p>
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<img alt="A worker in overalls unrolls a yellow insulating foam in a wooden lattice." src="https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=334&fit=crop&dpr=1 600w, https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=334&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=334&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=419&fit=crop&dpr=1 754w, https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=419&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/561381/original/file-20231123-24-4t2h00.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=419&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Energy-efficiency improvements, like installing insulation, are unavoidable for heat pump-only properties.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worker-insulates-floor-mineral-wool-1170614671">Serhii Krot/Shutterstock</a></span>
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<h2>How do hybrid systems compare?</h2>
<p>A 2021 <a href="https://www.sciencedirect.com/science/article/pii/S0378778821001493">study</a> found that a hybrid heating system consisting of an air-source heat pump and a condensing gas boiler reduced a typical UK household’s greenhouse gas emissions from heating by 30%. </p>
<p>A hybrid heat pump requires less remedial work: you may keep the original boiler and radiators. Cavity-wall and other forms of insulation will help you retain heat and use less energy, and these changes are essential for heating a property with a heat pump alone. Compared with an oil boiler, a hybrid heat pump system (combined with energy-efficiency measures) consumed roughly 70% less energy according to <a href="https://www.sciencedirect.com/science/article/pii/S0378778823004863#br0170">one study</a> – similar to a standalone heat pump.</p>
<p><a href="https://www.sciencedirect.com/science/article/pii/S0378778823004863#br0170">A case study</a> in Ireland also showed that hybrid heat pumps have 7% lower annual operating costs than a gas boiler alone, and 23% lower than an electric heat pump on its own. The disparity is because electricity can be a lot more expensive than gas, depending on fluctuating energy prices and how long the heat pump operates.</p>
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Read more:
<a href="https://theconversation.com/renewables-are-cheaper-than-ever-so-why-are-household-energy-bills-only-going-up-174795">Renewables are cheaper than ever – so why are household energy bills only going up?</a>
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<p>While insulating homes and replacing gas heating systems with electric alternatives should remain the goal, installing a hybrid heating system can reduce bills and emissions quickly, especially when government support for upgrading your heating is <a href="https://www.hhic.org.uk/news/decarbonisation-of-heat-impossible-without-hybrid-heat-pump-incentive-says-expert">insufficient</a>.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 20,000+ readers who’ve subscribed so far.</a></em></p>
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<p class="fine-print"><em><span>Jovana Radulovic does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Oil and gas must be eliminated from heating systems over the coming years.Jovana Radulovic, Head of School of Mechanical and Design Engineering, University of PortsmouthLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2164962023-11-22T17:05:18Z2023-11-22T17:05:18ZThe most vulnerable shoulder rising energy costs because their homes aren’t efficient enough – here’s why that’s so hard to tackle<figure><img src="https://images.theconversation.com/files/561034/original/file-20231122-19-m4p28i.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5691%2C3788&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hands-man-pouring-out-few-coins-2188117831">Maren Winter/Shutterstock</a></span></figcaption></figure><p>In September 2023, the UK prime minister, Rishi Sunak, <a href="https://www.instituteforgovernment.org.uk/comment/rishi-sunak-speech-net-zero">announced</a> that landlords will <a href="https://www.simplybusiness.co.uk/knowledge/articles/energy-efficiency-rules-for-rental-properties-scrapped/">no longer be required</a> to improve the energy efficiency of their rental properties. The announcement marked a departure from <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147340/powering-up-britain-joint-overview.pdf">decades of commitment</a> to the government’s sustainability objectives, including efforts to reduce the UK’s dependence on imported energy. </p>
<p>This dependence remains a <a href="https://iea.blob.core.windows.net/assets/9b89065a-ccb4-404c-a53e-084982768baf/SDG7-Report2023-FullReport.pdf">threat</a> both to the UK’s energy security and to addressing the <a href="https://www.nea.org.uk/energy-crisis/energy-crisis-timeline/#:%7E:text=The%20Energy%20Crisis%20has%20been%20driven%20by%20wholesale%20gas%20price,cost%2Dof%2Dliving%20crisis">growing number of people</a> that are trapped in fuel poverty throughout the country.</p>
<p>Following Russia’s invasion of Ukraine in February 2022, energy prices have soared. Under the UK’s current energy price cap, which is set every three months by government energy market regulator Ofgem, the <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-9491/">average annual gas and electricity bill</a> for a “typical” household is £2,500. This represents a 27% increase compared to the price cap in the summer of 2022 and a 96% increase compared to the price cap from the winter before. </p>
<p>My <a href="https://www.sciencedirect.com/science/article/pii/S0140988323005601?via%3Dihub">research</a>, published in November 2023, suggests that rising energy prices could have a disproportionate effect on people living in deprived areas. This is because their homes tend to use much more energy than they should need to due to things like a lack of insulation.</p>
<p>The difference between the amount of energy that could be consumed if a house was perfectly energy efficient compared to how much energy is actually consumed is known as the “energy efficiency gap”. This gap is greater for households living in deprived areas, meaning a higher proportion of their already limited incomes has to be spent on energy.</p>
<p>Over the past decade, several attempts have been made to <a href="https://www.sciencedirect.com/science/article/pii/S0140988323005406?dgcid=rss_sd_all">improve the energy efficiency</a> of UK households. The UK government’s <a href="https://www.gov.uk/apply-great-british-insulation-scheme">Great British Insulation Scheme</a>, for example, offers financial support for installing home insulation. However, despite such efforts, the size of the energy efficiency gap has remained persistent with substantial regional variation across England and Wales. </p>
<p>Closing the energy efficiency gap is a complex endeavour. My current research shows that the energy efficiency gap is the result of the intertwined relationships between several different factors. Three of those factors are discussed below.</p>
<p><strong>The energy efficiency gap in England and Wales (2008–2020):</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Three maps of England and Wales showing how the energy efficiency gap has grown." src="https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=475&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=475&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=475&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=597&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=597&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560775/original/file-20231121-4144-z0t2kr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=597&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.sciencedirect.com/science/article/pii/S0140988323005406?dgcid=rss_sd_all#fig1">Huaccha (2023)</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<h2>Understanding of energy efficiency</h2>
<p>People’s perception of the benefits that stem from energy-efficient behaviours has a significant impact on their choices. If people are unaware of the importance or do not deem it necessary to enhance the energy efficiency of their homes, they may not be willing to adopt energy-saving practices. </p>
<p>In my <a href="https://www.sciencedirect.com/science/article/pii/S0140988323005406">latest research</a>, also from November 2023, I used education level as a proxy for people’s willingness to engage in energy-efficient behaviour. </p>
<p>My analysis, which was conducted over a sample of around 18 million households in England and Wales, suggests that people adjust their energy-efficient behaviours faster in areas where the average resident possesses higher levels of education. A person was deemed to have a high level of education if they held a post-secondary diploma or higher degree.</p>
<p>These findings are in line with the <a href="https://www.ons.gov.uk/aboutus/whatwedo/paidservices/opinions">Opinions and Lifestyle Survey</a> conducted by the Office for National Statistics in 2021. This showed a positive relationship between households’ understanding of the benefits of adopting energy-saving measures and their decision to use energy more efficiently. </p>
<h2>Construction period of a home</h2>
<p>Energy efficiency gaps are also influenced by the <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/ageofthepropertyisthebiggestsinglefactorinenergyefficiencyofhomes/2021-11-01">age of the property</a>. The UK’s housing stock is among the <a href="https://www.theguardian.com/commentisfree/2021/sep/28/britain-homes-energy-crisis-governments-insulation-low-carbon-heating">oldest and least insulated</a> in Europe. This means that a lot of heat can quickly be lost through walls, windows and doors. </p>
<p>Older homes that were constructed in an era before energy efficiency became a central concern (before 2012), are generally less energy efficient. This translates to larger energy efficiency gaps, higher energy consumption and, as a consequence, higher utility bills. </p>
<p>By contrast, modern homes are often constructed using more energy-efficient building materials and features that are designed to retain heat effectively. These include double or triple glazing, energy-efficient boilers and cavity wall insulation.</p>
<p><strong>The link between energy efficiency and age of homes:</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing how Energy Performance Certificate (EPC) ratings have changed across construction periods" src="https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=94&fit=crop&dpr=1 600w, https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=94&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=94&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=119&fit=crop&dpr=1 754w, https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=119&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/560773/original/file-20231121-4461-wickdo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=119&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How Energy Performance Certificate (EPC) ratings have changed across construction periods. A is the most efficient and G is the least.</span>
<span class="attribution"><a class="source" href="https://www.sciencedirect.com/science/article/pii/S0140988323005406?dgcid=rss_sd_all#fig1">Huaccha (2023)</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p>The existence of larger and persistent energy efficiency gaps is a phenomenon that affects anyone living in an energy-inefficient home. However, my research shows that it has the potential to affect society’s most vulnerable disproportionally. </p>
<p>Homes in economically deprived areas <a href="https://theconversation.com/one-in-four-homes-is-hard-to-decarbonise-without-help-their-inhabitants-could-get-stuck-in-fuel-poverty-195702">tend to be</a> less energy efficient. As a result, households living in these homes are forced into spending a higher proportion of their disposable income on the cost of basic needs such cooking and heating. </p>
<p>In <a href="https://progressiveeconomyforum.com/wp-content/uploads/2023/08/PEF-Report-final-Protecting-Households-from-Price-Surges.pdf">previous research</a>, which was published in August 2023, I found that energy bills <a href="https://www.theguardian.com/business/2022/sep/22/poorest-risk-spending-half-disposable-incomes-on-energy-bills-uk-report-says">amounted to 47%</a> of the disposable income for poorest tenth of families in Britain over 2022, up from 23% in 2020.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/one-in-four-homes-is-hard-to-decarbonise-without-help-their-inhabitants-could-get-stuck-in-fuel-poverty-195702">One in four homes is 'hard to decarbonise' – without help their inhabitants could get stuck in fuel poverty</a>
</strong>
</em>
</p>
<hr>
<h2>Financial status</h2>
<p>Differences in household incomes play a significant role in determining the ability of people to implement energy-efficient improvements in their homes. Wealthier households can quickly incorporate these upgrades.</p>
<p>On the flip side, economically disadvantaged households struggle to even make ends meet, which means investing in energy improvements is more difficult. As a result, they find themselves restricted to the use of outdated and inefficient equipment, ultimately leading to higher energy efficiency gaps, higher energy consumption and increased costs. This situation is applicable to both homeowners and renters alike.</p>
<figure class="align-center ">
<img alt="A woman's hands pressed against a radiator." src="https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/561032/original/file-20231122-27-tvr4p0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Economically disadvantaged households may be less able to afford energy-saving upgrades.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/heavy-duty-radiator-central-heating-781785535">Zvone/Shutterstock</a></span>
</figcaption>
</figure>
<p>The government can do more to improve the energy efficiency of all UK homes. It could, for example, retrofit older buildings and create campaigns to improve energy literacy. </p>
<p>However, a better understanding of the relationship between local deprivation and households’ energy efficiency gaps is needed to guide economists and policymakers towards identifying the challenges that vulnerable people face in adopting new energy-saving technologies.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Gissell Huaccha does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Increasing energy costs pose a challenge for everyone, but the impact is most pronounced for those living in deprived areas.Gissell Huaccha, Research Fellow in Economics, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2163832023-10-26T13:30:38Z2023-10-26T13:30:38ZEnergy bills: how households could feel the cold this winter<figure><img src="https://images.theconversation.com/files/555841/original/file-20231025-21-n9asjf.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5991%2C3988&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/one-black-woman-having-problem-paying-2143164491">tommaso79/Shutterstock</a></span></figcaption></figure><p>As winter starts to bite, you may be starting to worry again about how much you will have to pay for your gas and electricity over the coming months. Of course, energy isn’t the only rising cost in the current inflation-led economy, which has caused most households to see <a href="https://www.independent.co.uk/business/budget-2023-record-fall-in-disposable-income-and-other-historic-benchmarks-b2301562.html">a decline in disposable income</a> since last winter.</p>
<p>Compounding this, even if energy prices are lower this winter than last, some households will struggle to pay their energy bills because they are still carrying <a href="https://www.theguardian.com/money/2022/oct/22/more-than-two-million-uk-households-are-in-debt-on-their-electricity-bills">significant energy debts</a>. </p>
<p>The current price cap, set by Great Britain’s energy regulator Ofgem, is <a href="https://www.ofgem.gov.uk/energy-price-cap#:%7E:text=Between%201%20October%20to%2031,falls%20in%20wholesale%20energy%20prices.">£1,834 per year</a> until December 31 for a typical household paying by direct debit. This is well below the peak of £4,279 in January to April last year, but it’s still <a href="https://www.uswitch.com/gas-electricity/guides/price-cap/">nearly £800 more</a> than three years ago. And a cap doesn’t mean your bill won’t fluctuate.</p>
<p>The price cap sets the amount you pay for each unit of gas and electricity that you consume. The key variables for your bill are then how much energy you consume and the wholesale price of natural gas, which also sets the electricity price. Natural gas heats most homes in the UK and is used by many for cooking. It <a href="https://www.gov.uk/government/statistics/uk-energy-in-brief-2023">generated nearly 40% of UK electricity in 2022</a>. This explains why many households are so exposed to changes in global gas prices.</p>
<h2>What’s in your bill?</h2>
<p>Look at your latest bill and you will see a daily standing charge, which is also regulated by Ofgem. This charge differs depending on the type of fuel you use, where you live and how you pay for your energy. The <a href="https://www.gov.uk/government/publications/energy-price-guarantee-regional-rates/energy-price-guarantee-prepayment-meters-regional-rates-and-standing-charges-october-to-december-2023">standing charge covers</a> the costs to the energy companies of supplying your gas and electricity and supporting various government initiatives.</p>
<p>Last winter, the government helped all households with a universal £400 payment under the Energy Support Bill. </p>
<p>That support package, along with other measures, launched in response to the rise in energy prices, <a href="https://obr.uk/box/an-international-comparison-of-the-cost-of-energy-support-packages/">cost the government</a> £78 billion in 2022-23 and 2023-24. So, it’s unsurprising that another payment hasn’t been promised this year. </p>
<p>As <a href="https://www.resolutionfoundation.org/app/uploads/2023/08/Gotta-get-through-this.pdf">the think tank Resolution Foundation</a> recently pointed out, this winter’s typical energy bill will be driven by three factors: the unit price for gas and electricity, the standing charge and the lower level of government support. </p>
<p>We know what to expect from latter two factors, so the unit charge is the only unknown. The way this will affect your energy bill this winter will come down to changes in supply and demand that will influence where Ofgem sets the cap from January 1 next year.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-winter-energy-crunch-in-europe-looks-a-distinct-possibility-212269">A winter energy crunch in Europe looks a distinct possibility</a>
</strong>
</em>
</p>
<hr>
<h2>An easily spooked market</h2>
<p>UK households are at the centre of a complex web of factors that influence the global energy supply and demand balance. This winter, supply remains a concern amid Russia’s ongoing invasion of Ukraine, and more recently, the threat of a wider Middle East conflict following fighting in Gaza between Israel and Hamas. </p>
<p>Russian pipeline gas continues to flow into southern Europe via Ukraine and Turkey, and Russia continues to supply liquefied natural gas (LNG) to Europe. But any reductions there could cause prices to spike.</p>
<p>Europe has <a href="https://energy.ec.europa.eu/news/eu-reaches-90-gas-storage-target-ahead-winter-2023-08-18_en">record levels of gas in storage</a> this year, but the supply of global LNG is still relatively “tight” (that is, there is not much to spare). This means the market could be easily spooked by any interruption in gas supply, causing a short-term price spike. We have seen this three times recently: </p>
<ul>
<li>when there was <a href="https://www.bloomberg.com/news/articles/2023-08-10/strikes-risk-10-of-global-lng-in-threat-of-new-energy-shock?sref=PF2RkEmW">labour unrest</a> in the Australian LNG industry</li>
<li>after <a href="https://www.naturalgasworld.com/prices-surge-on-finland-pipe-leak-mideast-tensions-107658">unexplained damage</a> to a gas pipeline linking Finland and Estonia</li>
<li>and, most recently, due to the <a href="https://www.bruegel.org/first-glance/israel-hamas-war-implications-gas-markets">ongoing conflict</a> between Israel and Hamas in Gaza, which has so far caused <a href="https://edition.cnn.com/2023/10/10/energy/israel-gas-field-shutdown-explainer/index.html">the closure of one gas field</a>.</li>
</ul>
<p>Although these events had a minimal real impact on global supply, price spikes at the time show just how easily “spooked” the gas market is. The continued threat of the conflict in Gaza spreading to other parts of the Middle East echoes the oil crisis of 50 years ago, when prices spiked for countries like the UK and US.</p>
<p>The UK <a href="https://assets.publishing.service.gov.uk/media/6513fe8ef6746b000da4bab5/Energy_Trends_September_2023.pdf">produces about half the gas it consumes</a>, with another third coming by pipeline from Norway and the balance arriving as LNG or via two interconnector pipelines from Europe. So, for the moment at least, a physical supply crisis in the UK looks unlikely, but as network operator National Gas Transmission said in its <a href="https://www.nationalgas.com/insight-and-innovation/winter--outlook">winter 2023/2024 outlook report</a>: “Disruptions to other markets could impact the GB market.”</p>
<p>So, what is the status of other markets? The main issue is whether or not Asian, and particularly Chinese, demand for LNG will be higher than last year, reducing gas availability for Europe. China is still <a href="https://www.npr.org/2023/08/16/1193711035/china-economy-tao-wang-interview">struggling economically post-COVID</a>, which could push down energy demand from the world’s second-largest economy. </p>
<p>The <a href="https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/lng/091323-winter-lng-demand-pops-up-from-china-japan-south-korea-remain-quiet">weather will also drive demand</a> – both in Northeast Asia and Europe. A prolonged cold spell could tighten LNG markets further, amplifying any supply scares. </p>
<figure class="align-center ">
<img alt="Aerial shot of static wind turbines in a foggy field." src="https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=363&fit=crop&dpr=1 600w, https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=363&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=363&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=456&fit=crop&dpr=1 754w, https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=456&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/555844/original/file-20231025-19-wl2bx0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=456&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Dunkelflaute: when the weather is gloomy and the wind isn’t blowing enough to power renewables.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/aerial-view-agricultural-field-located-valley-1801528210">GaudiLab/Shutterstock</a></span>
</figcaption>
</figure>
<p>In Europe, weather also impacts the availability of renewable energy. In the winter months, long spells of cold, gloomy weather with no wind drive up gas demand to compensate for the lack of renewable generation. The Germans call this time <em><a href="https://www.renewableenergyhub.co.uk/blog/what-will-dunkelflaute-mean-for-renewable-energy-surge">Dunkelflaute</a></em> (dark wind lull or dark doldrums). </p>
<p>We also have to hope that <a href="https://www.reuters.com/article/france-power-idUSL8N34W3BT">France’s nuclear power stations stay online</a> after a record number of outages last year. If not, heightened gas demand in continental Europe would mean the UK has to pay more to buy gas from Europe’s stores. Countries such as Germany have also been busy <a href="https://www.reuters.com/business/energy/germany-builds-up-lng-import-terminals-2023-08-09/">building LNG import terminals</a>, boosting competition for LNG shipments.</p>
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Read more:
<a href="https://theconversation.com/nord-stream-leaks-where-will-europe-get-its-gas-from-now-191529">Nord Stream leaks: where will Europe get its gas from now?</a>
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<p>Households should follow <a href="https://theconversation.com/how-to-keep-your-home-warm-during-very-cold-weather-on-a-budget-and-avoid-dangerous-heating-hacks-196259">the same advice as last winter</a>: the most affordable molecule of gas or electron of electricity is the one you don’t consume. Heed the <a href="https://www.bbc.co.uk/news/business-62738249">responsible advice</a> available on how to save energy and cut your bills because. Although the price cap is much lower than last winter, energy could be even less affordable for many people this year.</p><img src="https://counter.theconversation.com/content/216383/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Bradshaw receives funding from the UK Energy System Research Programme and EPSRC in relation to his role as Co-Director for the UK Energy Research Centre (UKERC). He also advises Government, Think-Tanks and Companies on energy matters. </span></em></p>Britain’s energy price cap is lower than last year but there are still several factors that could increase energy costs this winter.Michael Bradshaw, Professor of Global Energy, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2148742023-10-17T16:42:46Z2023-10-17T16:42:46ZWhy heating your home this winter may be even harder than last year<figure><img src="https://images.theconversation.com/files/554293/original/file-20231017-29-o9d9t9.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C8192%2C5464&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-gloves-hugging-hot-water-bottle-2212717459">Daisy Daisy/Shutterstock</a></span></figcaption></figure><p>Domestic energy prices <a href="https://www.nea.org.uk/news/worst-of-the-energy-crisis/">more than doubled</a> during 2022 compared with the year before. This meant that the number of UK households in fuel poverty who could not afford to heat their homes to a safe level rose from 4.5 million to 7.3 million.</p>
<p>The UK government attempted to alleviate the impact of rocketing bills with <a href="https://www.gov.uk/get-help-energy-bills/getting-discount-energy-bill">a package of support measures</a>. This included capping the unit cost of electricity and gas, a £400 rebate to all households using mains gas for heating and £200 for those using alternative fuels, and a further £650 “cost of living payment” to claimants of means-tested benefits.</p>
<p>Many of these schemes ended in spring 2023. And with wholesale gas costs and the government’s energy price cap having come down somewhat, you could be forgiven for thinking that the worst of the energy crisis has passed. </p>
<p>But that’s not the case for many billpayers – in fact, this winter is likely to be worse than the last for many households.</p>
<p>The energy price cap, introduced in 2019 by market regulator Ofgem, limits how much people pay for each unit of gas and electricity. The <a href="https://www.ofgem.gov.uk/information-consumers/energy-advice-households/energy-price-cap">latest price cap</a>, set on October 1 2023, means that a typical household will pay £1,834 a year for energy – less than £2,000 for the first time in 18 months.</p>
<p>This might sound like good news, but it’s still a substantial increase on the pre-crisis cap. In August 2021, the most a typical household could expect to pay in a year for energy was £1,277. </p>
<p>Although the unit prices of electricity and gas have fallen, there has been a steep increase in standing charges. These are a levy on all energy bills which cover the costs associated with supplying energy to homes. </p>
<p>Standing charges have gone up from around £186 a year pre-crisis to <a href="https://www.theguardian.com/money/2023/aug/25/ofgem-energy-price-cap-falls-but-consumers-still-face-high-bills">just over £300</a> now – effectively adding £110 to bills.</p>
<figure class="align-center ">
<img alt="An engineer atop of wooden electricity transmission pole." src="https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/554292/original/file-20231017-17-yx09a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Standing charges pay for the upkeep of the UK’s energy supply network.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/engineer-repairing-cables-on-telegraphic-pole-1358108471">KingTa/Shutterstock</a></span>
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<p>Standing charges are regressive because they are the same for everyone, regardless of <a href="https://www.moneysavingexpert.com/news/2022/08/ofgem-rules-out-shifting-the-costs-of-supplier-failure-out-of-th/">how much energy you consume</a>. Poorer households often use much less energy than wealthier ones, so standing charges make up a larger proportion of their energy costs. </p>
<p>In fact, some low-income households use such small amounts of energy that they are <a href="https://www.nea.org.uk/news/worst-of-the-energy-crisis/">paying little more than their standing charges</a>. </p>
<h2>Energy bill rebates ended</h2>
<p>The £400 energy bill rebate paid to all households last winter has now ended. Meanwhile, cost of living payments to claimants of means-tested benefits have <a href="https://www.gov.uk/guidance/cost-of-living-payment?gclid=*&source=CIR10&advsrcSuggest=CIR10medical-loans/&gclid=2070a23933c012f4a389c71fabe04081&gclsrc=3p.ds&">increased from £650 to £900 a year</a>. This will be helpful to those who qualify, but one third of households eligible for means-tested welfare payments <a href="https://www.jrf.org.uk/report/low-income-not-claiming-means-tested-benefits">do not claim them</a> due to stigma, lack of awareness or bad experiences with the assessment process, and so will receive no assistance. </p>
<p>Many households who do receive these cost of living payments will spend it on other expenses, such as food, <a href="https://www.nea.org.uk/news/worst-of-the-energy-crisis/">rather than heating their home</a>. This reflects the fact that energy is often seen by struggling households as something that can be <a href="https://www.nea.org.uk/news/over-half-of-parents-may-resort-to-washing-childrens-school-uniforms-by-hand-amid-cost-of-living-crisis/">rationed</a>.</p>
<p>If you’re in a household that does not qualify for the cost of living payment then the savings of around £150 that resulted from the lowering of the cap will <a href="https://www.bbc.co.uk/news/business-58090533">soon be more than cancelled out</a> by the lack of a rebate. </p>
<h2>Cold homes can kill</h2>
<p>Despite the financial support offered last winter, average levels of energy debt for people contacting Citizens Advice in England and Wales have risen sharply over the last year, from around £1,400 per household on average in March 2022 to <a href="https://www.theguardian.com/money/2023/aug/25/ofgem-energy-price-cap-falls-but-consumers-still-face-high-bills">£1,711 in July 2023</a>. One-third of UK energy customers are now <a href="https://www.stepchange.org/policy-and-research/2022-personal-debt-statistics.aspx">in arrears</a>. </p>
<p>So although energy bills have fallen slightly, many households are less resilient to financial shocks than they were in early 2022. Volatile energy prices are predicted to last until <a href="https://www.cornwall-insight.com/press/volatile-energy-prices-set-to-continue-into-2030/">the end of the decade</a>.</p>
<p><a href="https://www.fuelpovertyresearch.net/comment/tackling-fuel-poverty-learning-from-winter-research/">Research</a> last winter found that households in fuel poverty were underheating their homes, causing damp and mould that can create <a href="https://www.instituteofhealthequity.org/resources-reports/fuel-poverty-cold-homes-and-health-inequalities-in-the-uk/read-the-report.pdf">serious health problems</a> and exacerbating anguish and stress. The health risks of a cold home increase with repeated exposure.</p>
<figure class="align-center ">
<img alt="A PVC window frame with black mould growing on it." src="https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/554291/original/file-20231017-23-w2wapr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Poorly heated homes are at risk of damp.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mold-corner-window-516787591">Burdun Iliya/Shutterstock</a></span>
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<p>As temperatures begin to fall again, a range of measures are urgently needed to prevent a crisis worse than that of last winter.</p>
<h2>What can be done to help?</h2>
<p>Since energy prices are expected to remain high for years, long-term solutions are vital. There must be increased investment in efforts to insulate the UK’s leaky housing stock. But with winter just weeks away, what can the government do right now? </p>
<p>To start, it could offer greater energy bill rebates. Given the scale of the fuel poverty problem, eligibility for these rebates must be wide enough for anyone on a below average income to receive help. </p>
<p>Alternatively, the government could make the rebates universal again, and potentially recoup the costs by increasing taxes on the most wealthy or energy company profits. At the very least, unclaimed energy bill support from last winter should be used to support those <a href="https://www.nea.org.uk/news/worst-of-the-energy-crisis/">likely to struggle in the coming winter</a>, rather than being returned to the treasury. </p>
<p>Cut funding for government-backed advice services could also be restored. And there are reforms to the retail energy market that could be implemented fairly quickly, such as bringing standing charges in line with levels of usage. </p>
<p>More fundamentally, there are a number of proposals that would be fairer than the current system and could be implemented together for maximum impact. These include a “<a href="https://www.ucl.ac.uk/bartlett/sustainable/sites/bartlett_sustainable/files/navigating_the_energy-climate_crises_working_paper_4_-_green_power_pool_v2-2_final.pdf">green power pool</a>”, which would ensure that the cheap power generated by renewables such as wind and solar benefits those most in need first and foremost, <a href="https://www.nea.org.uk/news/social-tariff-consultation/">social tariffs</a> (discounted energy bills for low-income households), or a <a href="https://neweconomics.org/campaigns/national-energy-guarantee">national energy guarantee</a> that would secure access to enough free energy to meet everyone’s basic needs.</p>
<p>The government’s forthcoming autumn statement must not sidestep these issues if people in fuel poverty are to stay safe and warm this winter.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 20,000+ readers who’ve subscribed so far.</a></em></p>
<hr><img src="https://counter.theconversation.com/content/214874/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aimee Ambrose receives funding from the Arts and Humanities Research Council, the Economic and Social Research Council and the Energy Innovation Centre. </span></em></p><p class="fine-print"><em><span>Lucie Middlemiss receives funding from Horizon 2020, the Centre for Research into Energy Demand Solutions and the British Academy. She has previously received funding from the UK Energy Research Centre (UKRI) and the Nuffield Foundation.</span></em></p><p class="fine-print"><em><span>Neil Simcock receives funding from the Centre for Research into Energy Demand Solutions. He has previously received funding for fuel poverty research from the Royal Geographical Society (with IBG) and the EU under the Horizon 2020 programme.</span></em></p>Time is running out to ensure that people in fuel poverty can afford to keep warm this winter.Aimee Ambrose, Professor of Energy Policy, Member of Fuel Poverty Evidence and Trustee of the Fuel Poverty Research Network, Sheffield Hallam UniversityLucie Middlemiss, Professor in Environment and Society, University of LeedsNeil Simcock, Senior Lecturer in Geography, Liverpool John Moores UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2112612023-08-20T20:04:13Z2023-08-20T20:04:13Z5 tips for getting off gas at home – for a cleaner, cheaper, healthier all-electric future<figure><img src="https://images.theconversation.com/files/543177/original/file-20230817-23-84peqv.jpg?ixlib=rb-1.1.0&rect=124%2C7%2C5052%2C3437&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/induction-cooking-home-on-black-portable-1477848773">Elena M. Tarasova, Shutterstock</a></span></figcaption></figure><p>Burning gas in our homes to cook food or heat air and water has become a contentious issue. Gas is an expensive, polluting fossil fuel, and there’s mounting evidence to suggest it’s also <a href="https://www1.racgp.org.au/ajgp/2022/december/health-risks-from-indoor-gas-appliances">bad for our health</a>. </p>
<p>Five million existing Australian households will need to <a href="https://grattan.edu.au/report/getting-off-gas/">get off gas</a> within the next 30 years. But for homeowners, the upfront cost can be a major barrier to action. Renters rarely get a say over the appliances installed in their homes. And apartment owners can struggle to make individual changes too. </p>
<p>In most cases it’s worth making the switch, for the energy bill savings alone. For example, analysis suggests a household in Melbourne switching from gas to electricity can save <a href="https://theconversation.com/all-electric-homes-are-better-for-your-hip-pocket-and-the-planet-heres-how-governments-can-help-us-get-off-gas-207409">up to A$13,900</a> over a decade.</p>
<p>If you’re contemplating upgrading gas appliances in your home, or even disconnecting from the gas network altogether, here are a few handy tips and resources to cut through the confusion. </p>
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<figcaption><span class="caption">Homes must switch away from gas by 2050, says policy think tank (ABC News)</span></figcaption>
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Read more:
<a href="https://theconversation.com/keen-to-get-off-gas-in-your-home-but-struggling-to-make-the-switch-research-shows-youre-not-alone-209589">Keen to get off gas in your home, but struggling to make the switch? Research shows you're not alone</a>
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<h2>Tip 1 – Find trusted, independent information</h2>
<p>There is no shortage of information on how to make the switch from gas to all-electric appliances. The challenge is finding <a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">trusted and independent information</a>. </p>
<p>Not-for-profit organisation <a href="https://renew.org.au/">Renew</a> has compiled a range of <a href="https://renew.org.au/resources/how-we-can-help/efficient-electric-homes/how-we-can-help-going-off-gas/">presentations, guides, case studies and research</a>. <a href="https://www.choice.com.au/">Choice</a> provides independent reviews of household appliances, including operating costs. The Australian government’s <a href="https://www.energyrating.gov.au/">Energy Rating website</a> provides information on appliances to help consumers compare performance. Some <a href="https://www.yarracity.vic.gov.au/services/take-climate-action">local councils</a> and <a href="https://totallyrenewableyack.org.au/">community groups</a> also provide information, support and bulk-buying schemes.</p>
<p>You could also visit some of the all-electric homes open to the public for <a href="https://sustainablehouseday.com/">Sustainable House Day</a>. This can help you learn what works from people who have already made the change. </p>
<p>The <a href="https://www.facebook.com/groups/MyEfficientElectricHome">My Efficient Electric Home</a> group on Facebook is another active and helpful forum. </p>
<p>If you are going all-electric as part of a wider retrofit, consider an independent <a href="https://www.homescorecard.gov.au/">Residential Efficiency Scorecard assessment</a>. This will help you understand what to else you can do to maximise <a href="https://theconversation.com/the-other-99-retrofitting-is-the-key-to-putting-more-australians-into-eco-homes-91231">thermal comfort, environmental benefits and financial outcomes</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1683654943033692160"}"></div></p>
<h2>Tip 2 – Plan your approach</h2>
<p>Once you understand what to do, the next step is planning how to go about it. Think about what is most important to your household. What is driving the change? If it’s your health, you might like to start by eliminating indoor air pollution from the gas stove. Or if you want to save money, start using reverse-cycle air conditioning to heat your home, rather than gas.</p>
<p>There are three main ways to go all-electric: </p>
<ul>
<li><p><strong>Replace all your gas appliances at once</strong>. Making the change quickly minimises disruption to your home. You may save money on installation costs by doing everything in one go. You will avoid ongoing fixed gas supply charges once you disconnect from the gas network, but you may be required to pay an “<a href="https://energy.act.gov.au/switching-off-your-gas-connection/">abolishment fee</a>” for permanent disconnection. That fee can vary significantly, depending on your location and gas provider. Costs <a href="https://www.smh.com.au/environment/sustainability/would-you-pay-1000-to-get-off-gas-consumer-dismay-over-disconnection-cost-20230223-p5cmw9.html">could be up to $1000 (or more)</a> but some states like Victoria have capped the price a <a href="https://reneweconomy.com.au/fossil-gas-death-spiral-regulator-sets-exit-fee-to-socialise-cost-of-mass-disconnection/">household can be charged at $220</a>. Renters wouldn’t be able to permanently disconnect without permission from the landlord, so they would still be open to paying the daily connection fee even if they found alternative electric options for everything else. </p></li>
<li><p><strong>Replace your gas appliances one at a time</strong>, as finances allow. However, there will come a point where <a href="http://www.ata.org.au/wp-content/projects/CAP_Gas_Research_Final_Report_251114_v2.0.pdf">financially you will be better off</a> replacing all the remaining gas appliances. This is largely because it will not be affordable to keep paying the daily connection cost for gas if you just have one gas appliance remaining. </p></li>
<li><p><strong>Just stop using gas appliances</strong> in favour of existing electric appliances that do the same job, such as a <a href="https://reneweconomy.com.au/the-traps-laid-by-the-fossil-gas-industry-for-uninformed-households/">reverse cycle air conditioner for space heating</a>. You may have – or can buy – plug-in electric alternatives, such as a microwave ovens, portable induction cooktops, air fryers and heaters. These can be a good option for renters when landlords won’t make changes.</p></li>
</ul>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/cooking-and-heating-without-gas-what-are-the-impacts-of-shifting-to-all-electric-homes-210649">Cooking (and heating) without gas: what are the impacts of shifting to all-electric homes?</a>
</strong>
</em>
</p>
<hr>
<p>You could even borrow portable appliances to see how they work before committing to buying your own. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/tLjWZicC4mE?wmode=transparent&start=2" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Households share their electrification journey (Renew)</span></figcaption>
</figure>
<h2>Tip 3 – Access available rebates and resources</h2>
<p>Most states offer various rebates for households to reduce the upfront cost of replacing gas appliances. These could reduce costs by thousands of dollars. Some rebates also target rental housing. Here is a list of key rebates available in different states:</p>
<ul>
<li><a href="https://www.epw.qld.gov.au/about/initiatives/household-energy-savings-program">Queensland</a></li>
<li><a href="https://www.energy.nsw.gov.au/households/rebates-grants-and-schemes">New South Wales</a></li>
<li><a href="https://www.climatechoices.act.gov.au/policy-programs/home-energy-support-rebates-for-homeowners">ACT</a></li>
<li><a href="https://www.energy.vic.gov.au/for-households/victorian-energy-upgrades-for-households">Victoria</a></li>
<li><a href="https://recfit.tas.gov.au/household_energy/energy_saver_loan_scheme">Tasmania</a></li>
<li><a href="https://www.sa.gov.au/topics/energy-and-environment/using-saving-energy/retailer-energy-productivity-scheme">South Australia</a></li>
</ul>
<p>Some not-for-profit organisations (such as the <a href="https://www.bsl.org.au/services/energy-assistance/">Brotherhood of St Laurence</a>) offer financial and other support for lower-income households struggling to pay their energy bills.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/want-an-easy-400-a-year-ditch-the-gas-heater-in-your-home-for-an-electric-split-system-201941">Want an easy $400 a year? Ditch the gas heater in your home for an electric split system</a>
</strong>
</em>
</p>
<hr>
<h2>Tip 4 – Wait for a sale or negotiate a better deal</h2>
<p>It might sound simple but you can always save money by waiting until these electric appliances are on sale. If you are buying multiple appliances you can try to negotiate a better price. Factory seconds outlets offer lower prices as well.</p>
<h2>Tip 5 – Know the issues</h2>
<p>While the shift to all-electric will likely provide many benefits there are some things you need to consider:</p>
<ul>
<li>The carbon emissions from electricity are falling fast, and many homes have rooftop solar. Combining <a href="https://grattan.edu.au/report/getting-off-gas/">all-electric with solar panels</a> will maximise returns. </li>
<li>You may have to adjust to how new technologies operate and perform. For example, you may need <a href="https://www.theage.com.au/goodfood/tips-and-advice/do-you-really-have-to-buy-new-cookware-all-your-burning-questions-about-induction-cooking-answered-20230810-p5dvd0.html">new, metallic cookware for an induction cooktop</a> and become familiar with their fast response. Additionally, some people find heat from reverse cycle air conditioners to be drier and/or draughtier than gas heating. Floor-mounted units heat more effectively. </li>
<li>It is not just the energy performance of appliances that matters. For example, noise from heat pump hot water services can vary across different brands. They can also require more space for installation.</li>
<li>Undertaking a wider energy retrofit (for example, increasing insulation in walls, ceiling and underfloor, upgrading windows to double glazing) may mean you can buy a smaller, cheaper reverse cycle air conditioner when replacing gas heating.</li>
<li>Electric appliances also need maintenance to make sure they perform optimally. For example, reverse cycle air conditioners have filters that must be regularly cleaned. While this can be done by households, it can be hard for people with mobility issues.</li>
<li>Depending on the capacity of your electricity switchboard or wiring, extra electric appliances may require upgrades.</li>
<li>For renters, while you could use portable appliances, you may not be able to disconnect from gas completely, meaning you would still have to pay a daily connection fee.</li>
<li>Gas and electricity prices can change over time, for many reasons. For example, if fixed gas distribution costs are spread over fewer customers.</li>
</ul>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1689422889182003201"}"></div></p>
<h2>A worthwhile investment</h2>
<p>Australian states and territories have started banning gas in new builds. Victoria and the ACT will soon require <a href="https://theconversation.com/cooking-and-heating-without-gas-what-are-the-impacts-of-shifting-to-all-electric-homes-210649">new housing and major renovations to be all-electric</a>. Others are likely to follow. </p>
<p>For people in existing housing around Australia, it can be daunting to make the switch. Many of us have grown up with gas in our homes and when one appliance breaks, the easiest thing to do is replace like-for-like. But the weight of evidence shows it’s worth taking the time to look at the alteratives and invest in upgrading to all-electric appliances. The benefits far outweigh the costs. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/all-electric-homes-are-better-for-your-hip-pocket-and-the-planet-heres-how-governments-can-help-us-get-off-gas-207409">All-electric homes are better for your hip pocket and the planet. Here's how governments can help us get off gas</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/211261/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Trivess Moore has received funding from various organisations including the Australian Research Council, Australian Housing and Urban Research Institute, Victorian Government and various industry partners. He is a trustee of the Fuel Poverty Research Network.</span></em></p><p class="fine-print"><em><span>Alan Pears consults to and advises a number of not-for-profit organisations involved in transition from gas issues such as the Australian Alliance for Energy Productivity, Energy Efficiency Council, Renew. He has received funding from A2EP, EEC and Energy Consumers Australia for work in this area. He writes a regular column for Renew magazine, and for other websites such as Reneweconomy and thefifthestate. </span></em></p><p class="fine-print"><em><span>Nicola Willand receives or has received funding for research from various organisations, including the Australian Research Council, the Victorian State Government, the Lord Mayor’s Charitable Foundation, the Australian Housing and Urban Research Institute, the Future Fuels Collaborative Research Centre, the Australian National Health and Medical Research Centre and the British Academy. She is affiliated with the Australian Institute of Architects.</span></em></p>Thinking about getting your home off gas, but don’t know where to begin? Here’s a few handy tips to get you on your way.Trivess Moore, Senior Lecturer, School of Property, Construction and Project Management, RMIT UniversityAlan Pears, Senior Industry Fellow, RMIT UniversityNicola Willand, Senior Lecturer, School of Property, Construction and Project Management, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2086332023-07-05T12:41:00Z2023-07-05T12:41:00ZRegulators including Ofgem use codes of practice to curb bad behaviour by businesses –– how to tell if this works<figure><img src="https://images.theconversation.com/files/534658/original/file-20230628-18428-4pbe1x.jpg?ixlib=rb-1.1.0&rect=60%2C60%2C6649%2C4406&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/smart-meter-energy-checking-domestic-electricity-2283726771">Janis Abolins/Shutterstock</a></span></figcaption></figure><p>UK energy regulator Ofgem <a href="https://www.theguardian.com/business/2023/jun/28/ofgem-moves-to-make-new-prepayment-meter-supplier-rules-compulsory">wants to make</a> its voluntary <a href="https://www.ofgem.gov.uk/publications/statutory-consultation-involuntary-ppm">code of practice on prepayment meters compulsory</a>. It introduced the code in April 2022 to protect people from being forced onto prepayment meters for gas and electricity.</p>
<p>As the cost-of-living crisis sent energy bills spiralling, UK energy companies were criticised for forcing vulnerable people onto these meters to ensure payment for gas and electricity. In some instances, contractors were reported to have <a href="https://news.sky.com/story/i-felt-id-been-burgled-woman-says-energy-firm-workers-forced-their-way-into-her-home-to-install-meter-12860366">forced their way into homes</a> to install them. </p>
<p>Predominantly used by low-income consumers, prepayment meters have traditionally been more expensive compared to paying via direct debit. And according to consumer service <a href="https://www.citizensadvice.org.uk/about-us/about-us1/media/press-releases/millions-left-in-the-cold-and-dark-as-someone-on-a-prepayment-meter-cut-off-every-10-seconds-reveals-citizens-advice/">Citizens Advice</a>, 3 million people ran out of credit on their prepayment meters in 2022. This increases the risk of being without power to cook, keep the lights or heating on. </p>
<p>The UK government has since announced it will bring the two sets of charges in line. But groups including <a href="https://twitter.com/EndFuelPoverty/status/1670675322285506560">the End Fuel Poverty Coalition</a> have called for more radical action, such as banning forced installation of prepayment meters altogether. Instead, Ofgem launched a code of practice in April to which UK energy companies <a href="https://www.ofgem.gov.uk/publications/energy-suppliers-sign-new-code-practice-involuntary-prepayment-installations">voluntarily signed up</a>. These companies are then required to comply with it to be able to move a customer on to a prepayment meter.</p>
<p>Ofgem’s move to make the code compulsory raises the question of whether – in this situation at least – a code of practice was enough to ensure ethical behaviour.</p>
<h2>What is a code of practice?</h2>
<p>Regulators or industry bodies use a code of practice that typically cover the behaviour and actions of professions, companies or industries. They are often voluntary, are sometimes referred to as self-regulation and can be developed by political institutions or by companies themselves. Many of these codes cover topics and areas that are not easily controlled by regulation, such as company values or an employee’s ethical behaviour.</p>
<p>Codes of practice <a href="https://www.researchgate.net/publication/242022630_Curves_in_the_high_road_A_historical_analysis_of_the_development_of_American_business_codes_of_ethics">widely used in the private and public sector</a> to eliminate unethical behaviour for many years. In fact, they actually affect almost all aspects of our lives – from our behaviour in the workplace to the supply chains of the clothes and food we buy. </p>
<p>For example, if you work for a major UK employer such as <a href="https://www.tescoplc.com/media/1239/tesco-code-of-business-conduct-2018.pdf">Tesco</a>, <a href="https://www.astrazeneca.com/content/dam/az/PDF/Sustainability/Code_of_Ethics_English.pdf">AstraZeneca</a> or <a href="https://www.lloydsbankinggroup.com/assets/pdfs/who-we-are/responsible-business/downloads/group-codes-and-policies/2022-lbg-code-of-ethics-and-responsibility.pdf">Lloyds Banking Group</a>, your conduct at work is governed by a code of practice. When you buy a pair of trainers from a high street store such as <a href="https://www.jdplc.com/sites/jd-sportsfashion-plc/files/ethical-code-of-practice-2021.pdf">JD Sports</a> or <a href="https://www.nextplc.co.uk/corporate-responsibility/code-of-practice">a dress from Next</a>, these are covered by codes concerning the treatment of workers and the environment throughout the supply chain. Even the teachers at your children’s school are covered by a <a href="https://www.gtce.org.uk/teachers/thecode/index.html">code of conduct</a>.</p>
<h2>Critiquing the code</h2>
<p>Three main criticisms have been levelled at voluntary codes by academic researchers. Companies and industries have been criticised for <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/add.13048">using voluntary codes as a public relations tool</a> to change perceptions rather than rooting out unethical practices. Many codes are also believed to include little in terms of content that would lead to a meaningful change in practice. Instead they often simply <a href="https://hub.salford.ac.uk/cfs/wp-content/uploads/sites/107/2019/12/The-effectiveness-of-self-regulation-in-microfinance-1.pdf">list what they are legally obliged to do</a> or what they’re already doing. Finally, industries and professions have been accused of using codes to <a href="https://link.springer.com/article/10.1007/s10551-019-04192-x">protect themselves</a> from lawsuits, government intervention or competition from new market entrants.</p>
<p>Leaving aside the controversies around codes of practice, what does academic research tell us about their effectiveness? The short answer is that it depends. A <a href="https://link.springer.com/article/10.1007/s10551-019-04192-x">recent review</a> of the existing academic evidence concluded that codes have “somewhat positive” effects in a number of areas. This includes a reduction in (largely self-reported) unethical behaviour by employees and management, as well as positive effects on labour conditions in the supply chain. </p>
<p>However, there are some important caveats to this. To be effective, voluntary codes and standards have to prescribe or root out behaviour and practices that make a material difference to organisational and staff conduct. It’s important that new practices are actually adopted as a result, as is the degree to which the code is embedded in the organisations. The latter can happen when, for example, <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/puar.12562">leadership teams demonstrate good conduct</a>.</p>
<p>A <a href="https://hub.salford.ac.uk/cfs/wp-content/uploads/sites/107/2019/12/The-effectiveness-of-self-regulation-in-microfinance-1.pdf">review of voluntary standards</a> in international microfinance found that most codes and self-regulatory frameworks lacked independent verification, robust monitoring and consequences for noncompliance. Voluntary standards have also been found to lack the clout to overcome <a href="https://pure.port.ac.uk/ws/portalfiles/portal/13306806/JID_Paper_Dominican_Republic_Final_version.pdf">competitive pressures to maximise profit and reduce costs</a>, which may drive unethical behaviour.</p>
<figure class="align-center ">
<img alt="Blue sky background, wooden signpost with signs for ethics, accountability, principles, integrity, values." src="https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/534660/original/file-20230628-19397-ek160k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A code of practice signposts ethical behaviour for companies, professionals and industries.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/wooden-signpost-code-ethics-concept-accountability-537942472">PX Media/Shutterstock</a></span>
</figcaption>
</figure>
<h2>What should you expect from a code of practice?</h2>
<p>Whether you have to adhere to a code of conduct as part of your job, or you are keen to ensure a company you buy from is acting ethically, research shows there three key questions to ask when examining their code of conduct.</p>
<p>First, what does the code says about how behaviour will be monitored and enforced, and what are the consequences of noncompliance? Second, whether the code has been embedded into the organisation. For example is it included in training, or do leaders talk about it or demonstrate its main points in the way they act? Thirdly, what are the underlying drivers of “bad” behaviour (for example, shareholder pressure to boost profitability), and to what degree has the code acknowledged and attempted to address these?</p>
<p>Based on the available academic evidence outlined above, Ofgem’s code could help to reduce unethical behaviour in the energy industry. However, its long-term success will depend how far energy companies go to make it part of their working cultures. Ofgem’s decision to make the code compulsory would be a good way to ensure this happens.</p><img src="https://counter.theconversation.com/content/208633/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Pål Vik is an independent expert on the Steering Group for the European Code of Good Conduct for Microcredit Provision, a body overseeing a voluntary code of practice for the European microfinance sector. </span></em></p>Creating a successful code of conduct requires commitment from organisations and the people that must abide by them.Pål Vik, Senior Research Fellow, University of SalfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2084942023-06-29T13:20:07Z2023-06-29T13:20:07ZYour energy bills are finally about to go down – here’s why<figure><img src="https://images.theconversation.com/files/534781/original/file-20230629-15-pu178o.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C6000%2C3997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-england-september-30th-2021electricity-meter-2050238864">Alex Yeung/Shutterstock</a></span></figcaption></figure><p>For the first time since autumn 2022, your energy bill will soon be capped by the UK regulator Ofgem rather than the government’s <a href="https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022">emergency price guarantee</a>. This means you should see a drop in your next bill.</p>
<p>From Saturday July 1 2023, Ofgem is <a href="https://www.ofgem.gov.uk/publications/customers-pay-less-energy-bills-summer#:%7E:text=From%25201%2520July%2520the%2520equivalent,charge%2520of%252053p%2520per%2520day.">lowering the price cap</a> – which limits the amount your supplier can charge for a unit of electricity or gas if you are on a <a href="https://www.which.co.uk/reviews/cutting-your-energy-bills/article/energy-tariffs-explained-aeSdn3X07AID">standard tariff</a> – by 38% on gas (meaning the unit price for direct debit payers will drop from 13p to 8p) and 42% on electricity (down from 51p to 30p). These new prices are below the government’s emergency guarantee.</p>
<p>The average annual household energy bill (including the fixed daily amount that you pay regardless of energy use) will <a href="https://www.ofgem.gov.uk/publications/customers-pay-less-energy-bills-summer">fall by 17%</a> from £2,500 to £2,074. But how much you can expect to pay still depends on how much energy you use, and your mix of electricity and gas and whatever other fuels you may use to heat and light your home.</p>
<p>The cap has been lowered because wholesale energy prices (the price at which your supplier buys energy) are falling and <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-9714/#:%7E:text=The%2520cap%2520is%2520forecast%2520to,tariffs%2520from%25202021%2520and%2520earlier.">may be stabilising</a>. However, these prices are still not returning to the levels they were before early 2022. </p>
<p>Ofgem continues to review and adjust the cap every three months. If you are on a direct debit plan, your energy supplier may not have changed your monthly payments in case prices go back up at some point in the coming year. And even if your bill is falling, the drop may bring no sudden relief for several reasons.</p>
<h2>Energy bills fall but squeeze on budgets remains</h2>
<p>First, the government is no longer providing such extensive support. The energy bill support scheme which gave every household a £400 discount on their bill last winter ended in March 2023. This, along with the emergency price guarantee replacing Ofgem’s price cap, kept bills lower than they would otherwise have been. </p>
<p>Second, the <a href="https://www.theguardian.com/business/2023/apr/16/more-than-1m-uk-small-businesses-trapped-in-high-cost-energy-tariffs">energy bills of businesses</a> that supply goods and services – for example, producing and transporting the food you buy in supermarkets – are not covered by the cap. So, higher energy prices will continue to affect the prices of just about everything we buy.</p>
<figure class="align-center ">
<img alt="A person reads their receipt in a supermarket car park with a trolley full of shopping." src="https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/534782/original/file-20230629-29-s7pqvm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Falling household energy bills won’t affect high prices elsewhere.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/epsom-uk-7-october-2022-female-2211249143">LSP EM/Shutterstock</a></span>
</figcaption>
</figure>
<p>This is one source of stubbornly high inflation as the global economy emerges from the pandemic and the UK adjusts to being outside the European Union. Others include increased shipping and other transport costs in getting the things we need and want to shops. Food supply chains, particularly for items containing wheat, continue to be affected by the war in Ukraine.</p>
<p>Costs unrelated to energy are driving a very high cost of living, and this is reflected in the underlying rate of inflation, or <a href="https://www.thisismoney.co.uk/money/bills/article-12218243/Why-inflation-high-whats-core-inflation.html">core inflation</a>, which is still high even when volatile energy and food prices are removed. Rising interest rates are <a href="https://www.bbc.co.uk/news/business-65925224">straining</a> household budgets, particularly among mortgage holders but also those who rent from landlords with mortgages.</p>
<h2>Households are conserving energy</h2>
<p>Energy bills are a big expense for most households at the moment, but moreso for those <a href="https://www.strath.ac.uk/humanities/centreforenergypolicy/newsblogs/2022/energypriceshocksaug22/">on lower incomes</a> and those who can’t avoid using a lot of energy, perhaps due to <a href="https://www.theguardian.com/society/2022/mar/15/disabled-people-face-rising-energy-fuel-and-food-costs-say-uk-charities">medical equipment</a>. </p>
<p><a href="https://www.energylivenews.com/2023/06/16/uk-gas-demand-expected-to-decline-again-next-winter/#:%7E:text=Following%2520last%2520year's%2520surge%2520in,to%2520the%2520winter%2520review%2520report.">Data</a> shows that demand for gas across the UK fell by 13% last winter, compared with a year earlier. This was in response to the exorbitantly high price of gas (which also drove up the price of electricity, but to a lesser extent). For better-off households, that meant cutting wasteful use – whereas in poorer homes, it probably meant underheating.</p>
<figure class="align-center ">
<img alt="A young man wearing winter clothes indoors cups a candle in his hands." src="https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/534785/original/file-20230629-27-ebdusz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Poorer households will not have escaped the recent winter unscathed.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-man-without-electricity-home-candle-2218572145">Lysenko Andrii/Shutterstock</a></span>
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</figure>
<h2>Ensure your direct debit reflects your energy use</h2>
<p>For those paying for energy via direct debit, it’s worth checking that your monthly payments are <a href="https://www.moneysavingexpert.com/utilities/lower-energy-direct-debits/">reasonable</a> for the amount of energy you are actually using. You should also check whether you are due a refund if conserving energy means you have overpaid since prices went up last year. </p>
<p>My family’s own efforts to conserve energy over the winter meant we built up quite a substantial credit across our electricity and gas accounts. Through conversations with my supplier, as well as reducing our monthly direct debits to reflect our actual usage, I managed to get this refunded and am planning to put the money in a savings account. </p>
<p>But I’m lucky to be able to do this. Many people may need to reallocate energy bill overpayments to other things as the cost of living crisis continues. For those on pre-payment meters, there is <a href="https://www.thisismoney.co.uk/money/article-12141689/Prepayment-meter-households-urged-energy-support-vouchers-deadline.html">support available</a> in the form of vouchers – but only until Friday June 30, so act fast.</p>
<p>While energy bills are falling, <a href="https://www.energylivenews.com/2023/05/26/energy-prices-stuck-in-high-gear-for-next-two-years-warns-regulator/">prices remain relatively high</a>. Alongside other price pressures due to high inflation and interest rates, household budgets will still feel tight. There is still much to be done to ensure sustainable, accessible and affordable energy for all in the UK.</p><img src="https://counter.theconversation.com/content/208494/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Turner receives funding from the UK Energy Research Centre and the European Climate Foundation.</span></em></p>Even if your bill is falling, though, this may bring no sudden relief due to continued high inflation and interest rates.Karen Turner, Professor and Director of the Centre for Energy Policy, University of Strathclyde Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2064052023-05-29T20:08:39Z2023-05-29T20:08:39ZShop around to beat electricity price spikes? It’s not as easy as it should be<figure><img src="https://images.theconversation.com/files/528755/original/file-20230529-25-9z4e6.jpg?ixlib=rb-1.1.0&rect=45%2C0%2C5109%2C3388&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Australian consumers are painfully aware of the energy cost crisis. And from July 1, electricity <a href="https://protect-au.mimecast.com/s/7tocCOMK7YcgljzBtEMzxF?domain=abc.net.au">bills are set</a> to rise by a further 20-25% across <a href="https://www.aer.gov.au/news-release/aer-releases-final-determination-for-2023%E2%80%9324-default-market-offer">South Australia, New South Wales, south-east Queensland</a> and <a href="https://www.esc.vic.gov.au/electricity-and-gas/prices-tariffs-and-benchmarks/victorian-default-offer/victorian-default-offer-price-review-2023-24">Victoria</a>. The increases will add to cost-of-living pressures across households and small businesses. </p>
<p>With the burden likely to fall yet again on the consumer, we’re being <a href="https://www.theguardian.com/australia-news/2023/may/25/power-bills-to-rise-by-up-to-a-quarter-in-parts-of-australia-after-regulator-issues-market-default-decision">told to shop around</a> for the best deal. </p>
<p>So, where do you start? There are about 25 electricity suppliers in NSW alone. Some you probably have never heard of. Do you go to each one online and see which has the best deal? That’s unlikely. It is too overwhelming and time-consuming. </p>
<p>Instead, you resort to using energy comparison websites. However, based on my experience, neither energy bills nor comparison sites are easy to use or clear about the terms of deals – and I study energy economics. </p>
<p>It’s not just me – consumer advocacy group Choice has <a href="https://www.choice.com.au/shopping/shopping-for-services/utilities/articles/energy-comparison-sites">found problems</a> with these sites, while Clare Savage, chair of the Australian Energy Regulator (which announced the price increases), has <a href="https://www.smh.com.au/national/we-made-shopping-for-power-too-hard-for-consumers-20221018-p5bqt9.html">said</a> a “complex and confusing” process left her unsure whether she had found the best deal. </p>
<p>If consumers are being told to shop for the best deal, better regulation is needed to ensure the average person can do this. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1661662685027762177"}"></div></p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/electricity-prices-are-rising-again-heres-how-to-ensure-renters-can-cash-in-on-rooftop-solar-205928">Electricity prices are rising again. Here's how to ensure renters can cash-in on rooftop solar</a>
</strong>
</em>
</p>
<hr>
<h2>So how do you compare energy deals?</h2>
<p>First, you’ll need to have a close look at your electricity bill. Does your account clearly state what plan you are on? </p>
<p>My AGL bill says I am on a “Bright” plan. Not so bright as I <a href="https://www.agl.com.au/get-connected/electricity-gas-plans/nsw/comparison">cannot find any details about it on AGL’s site</a>! It’s probably a plan that no longer exists. </p>
<p>Why are retailers constantly allowed to change the names of plans? It’s confusing. </p>
<p>The Australian government has an official energy comparison website called <a href="https://www.energymadeeasy.gov.au/">Energy Made Easy</a>. There are third-party comparison services, too, such as <a href="https://www.canstarblue.com.au/electricity/">Canstar Blue</a>, <a href="https://www.iselect.com.au/energy/?utm_source=google&utm_medium=cpc&utm_campaign=en_bau-generic-nsw-compare-exact_dr&utm_term=electricity-comparison&&&&&ds_rl=1273413&gad=1&ds_rl=1273413&gclid=CjwKCAjw04yjBhApEiwAJcvNoacIiOYQbqIvDHfPIB6fxpty_qxLNtPApXiVZeqIHBUNNdhquT27OhoCKjYQAvD_BwE&gclsrc=aw.ds">iSelect</a>, <a href="https://energy.finder.com.au/?rc=45056&utm_source=google&utm_medium=cpc&gclid=CjwKCAjw04yjBhApEiwAJcvNoTdX3yq3YaS2xIvksfTqobFIYH4B-oVNZk8DoSWlINfB0AHleBpTXhoCR14QAvD_BwE">Energy Finder</a> and <a href="https://www.comparethemarket.com.au/energy/">Compare the Market</a>. In 2020, the Federal Court <a href="https://www.accc.gov.au/media-release/iselect-to-pay-85-million-for-misleading-consumers-comparing-energy-plans">fined iSelect A$8.5 million</a> for misleading consumers when plans it recommended between November 2016 and December 2018 were not necessarily the most suitable or competitive.</p>
<p>In addition, other third-party providers use cold calling and pressure consumers to switch in one phone call. I once used such a service a few years ago. I now get calls every six months asking me to switch. How can I verify a deal over the phone? </p>
<p>Third-party providers get a referral fee from some electricity suppliers when consumers switch through their websites. Canstar, for example, provides a list of suppliers and has a “Go to Site” or “Details” icon under the More information" column to the right. If you click on the “Go to Site” option and sign up, Canstar gets a referral fee.</p>
<p>On the Canstar website, you first enter the suburb (in my case, somewhere in NSW) before getting a list of prices. The default energy distributor is Ausgrid. Since I am with Endeavour, I had to edit this. </p>
<p>Endeavour resulted in prices that were significantly above Ausgrid prices. Why are the prices different? I don’t have the answer. </p>
<p>If you stick to the default Ausgrid, you can enter your home address in the next step, which will then adjust your details to the correct provider. Why not start with the address in the first place if a suburb has multiple electricity distributors? </p>
<p>You have the Energy Made Easy option to go down the official path. The Australian Energy Regulator received <a href="https://www.aer.gov.au/news-release/aer-welcomes-website-funding-to-help-customers-compare-plans">A$8 million</a> to make this website work better. Was this money well spent? I don’t think so. </p>
<p>The initial steps on Energy Made Easy are straightforward. You select electricity, enter your postcode, and select the number of people in your household. </p>
<p>Next, to provide the details of your energy use, you can enter your National Metering Identifier (NMI) number on your bill. Or you can upload the last 12 months of your bills. I tried both options. </p>
<p>The NMI option gives you different prices from the “Upload PDF bill” option. How is this possible? Yes, another stressful and frustrating situation. </p>
<p>Next, read the terms and conditions. They state that the information presented might not be accurate. My confidence dropped after reading this. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/budgets-energy-bill-relief-and-home-retrofit-funding-is-a-good-start-but-dwarfed-by-the-scale-of-the-task-205380">Budget's energy bill relief and home retrofit funding is a good start, but dwarfed by the scale of the task</a>
</strong>
</em>
</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Screenshot of Energy Made Easy energy deal comparison site" src="https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=413&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=413&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=413&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=519&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=519&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528753/original/file-20230529-27-9z4e6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=519&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">At first, using the Australian government’s Energy Made Easy comparison site seems simple enough, but it’s not.</span>
<span class="attribution"><a class="source" href="https://www.energymadeeasy.gov.au/">Energy Made Easy</a></span>
</figcaption>
</figure>
<h2>Like-for-like comparisons are needed</h2>
<p>The NMI and PDF bill uploads present you with a total cost over 12 months. It’s the same on other online comparison sites. I expected a monthly comparison, as this is how I get my bill. </p>
<p>I also expected a neat comparison across usage charges, usually per kilowatt hour (kWh), and the daily supply charge to bring electricity to my premises. Instead, I was presented with connection, disconnection, move-in and move-out fees. Some had a membership fee. We all know what that means. You are likely to stick with that provider for much longer. </p>
<p>There are many other options to consider. Do you have a swimming pool? Is this on a controlled load? What is a controlled load? What is the difference between a <a href="https://www.momentumenergy.com.au/standingoffer#:%7E:text=Standing%20offers%20vs%20market%20offers%3A%20what's%20the%20difference%3F,expensive%20than%20a%20market%20offer.">standing and a market offer</a>? Wait a minute, the standing offer is also known as the default market offer. Some retailers call the “standing offer” the “reference price”. In fact, the <a href="https://www.abc.net.au/news/2018-07-11/power-bills-can-be-cut-if-competition-boosted-accc-says/9978690">idea of a default price</a> was to make it easier to compare retailers.</p>
<p>You need to know these terms as you will encounter them while you shop around. And if you don’t shop around and your market offer (that fancy-named plan) has expired, you will likely pay the maximum price. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869">Why are electricity prices going up again, and will it ever end?</a>
</strong>
</em>
</p>
<hr>
<p>Please read the terms and conditions. Please read the fine print before making your choice. Too many people skip this, but the details matter when trying to get the best deal. </p>
<p>It looks like Australians are sitting ducks when it comes to electricity price rises. We need better guidelines for what information is presented to the consumer and in what form. Current regulations require only the essential information to be given either on bills or comparison sites. </p>
<p>We need a better solution than simply asking consumers to shop around for the best deal. Right now, even the official Australian government website can’t accurately help us.</p><img src="https://counter.theconversation.com/content/206405/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lurion De Mello does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Electricity prices are going up again by as much as 25% on July 1. The advice to consumers is to shop around to get the best deal. Yet neither electricity bills nor comparison sites are user-friendly.Lurion De Mello, Senior Lecturer in Finance, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2059282023-05-25T20:01:23Z2023-05-25T20:01:23ZElectricity prices are rising again. Here’s how to ensure renters can cash-in on rooftop solar<p>Consumers struggling with cost-of-living pressures were dealt another blow on Thursday, when the Australian Energy Regulator <a href="https://www.theguardian.com/australia-news/2023/may/25/power-bills-to-rise-by-up-to-a-quarter-in-parts-of-australia-after-regulator-issues-market-default-decision">confirmed</a> energy price hikes of up to 25% from July.</p>
<p>For the <a href="https://www.theguardian.com/environment/2023/feb/28/solar-already-australias-largest-source-of-electricity-as-rooftop-capacity-hits-20gw-consultancy-says">one in three Australian homes</a> with rooftop solar, the bill shock will be reduced – together with their carbon emissions. But households without solar, such as renters and social housing tenants, are missing out on the benefits. </p>
<p>In this month’s federal budget, A$1 billion was allocated to low-interest loans to homeowners for energy efficiency upgrades, solar panel installation and swapping out gas for electric appliances. Details are sketchy so far, but the government <a href="https://www.theguardian.com/commentisfree/2023/may/16/an-extra-13bn-to-upgrade-australias-energy-inefficient-homes-might-not-do-much-heres-what-would-help">says the package</a> “will focus on households that most need support”, including renters. </p>
<p>But do low-interest loans encourage landlords to install solar on rental homes? <a href="https://www.sciencedirect.com/science/article/pii/S0301421523000022">Our research</a> suggests in many cases, the answer is no. New measures are needed to make sure renters benefit from solar technology – both through lower bills, and more liveable homes.</p>
<figure class="align-center ">
<img alt="young woman and man look at papers and laptop" src="https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/528168/original/file-20230525-15-bzn1se.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Renters without solar panels miss out on lower energy bills.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Solar haves and solar have-nots</h2>
<p>Rents in Australia are <a href="https://www.abs.gov.au/statistics/detailed-methodology-information/information-papers/new-insights-rental-market#:%7E:text=Median%20rents%20began%20increasing%20in,per%20week%20(Figure%203).">on the rise</a>. But as of 2017-2018, there was only a <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/6553.0">3-4% chance</a> a rental property had solar panels on the roof. </p>
<p>The conventional view is that two main barriers exist to solar being installed on rentals. </p>
<p>The <a href="https://doi.org/10.1016/j.enpol.2017.11.069">first</a> is that property investors don’t want to pay for the technology when they aren’t directly reaping the benefits of lower bills and a more comfortable home temperature.</p>
<p>But this dynamic is an inherent part of the rental arrangement. And it ignores the fact that landlords routinely make other improvements to investment properties, such as kitchen upgrades, even though they’re not using the kitchen. Instead, landlords benefit by collecting higher rents. </p>
<p>The second perceived barrier is the upfront cost of installing solar. Until now, efforts to increase solar on rental properties have focused on reducing this cost through subsidies and low-interest finance. </p>
<p>But are upfront costs really preventing landlords from installing solar on rental properties? Our research set out to answer that question.</p>
<p>First, we surveyed 931 property investors with all types of buildings. This involved a ranking exercise where landlords selected the most and least important reasons for not yet putting solar panels on their rental home.</p>
<p>We then surveyed 147 owners of stand-alone rental homes. We asked them to choose between hypothetical policy options involving system costs, billing arrangements and interest-free loans. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/community-batteries-are-popular-but-we-have-to-make-sure-they-actually-help-share-power-202626">Community batteries are popular – but we have to make sure they actually help share power</a>
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</em>
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<h2>Our findings</h2>
<p>Our research <a href="https://www.sciencedirect.com/science/article/pii/S0301421523000022">found</a> landlords are concerned about the upfront cost of solar. They ranked it as one of two top reasons why they hadn’t installed rooftop panels.</p>
<p>But when offered a choice of hypothetical policy options, <a href="https://www.sciencedirect.com/science/article/pii/S0301421523000022">about two-thirds</a> opted for upfront payment of solar systems rather than an interest-free loan. So for the majority of landlords, loans don’t seem to be the key tipping point.</p>
<p>And the other top reason landlords don’t install rooftop solar? Because they think renters aren’t willing to pay higher rent in exchange. </p>
<p>However, this perception runs counter to a <a href="https://www.tandfonline.com/doi/abs/10.1080/02673037.2021.2004094?journalCode=chos20">2021 study</a> that found Australian renters with solar panels pay about A$19 more in rent each week than non-solar renters. This meant landlords could recoup the cost of installation in about five years.</p>
<p>So for policymakers wanting to get more solar on rental homes, initiatives must go beyond low-interest loans.</p>
<p>Other <a href="https://c9cdneca.azureedge.net/media/3141/solar-for-renters-report-2022.pdf?rnd=132998139880000000">research</a> we’ve conducted found many landlords saw energy efficiency measures, such as electric heating, as extremely expensive – and, in the case of insulation, invisible and therefore not valued by renters. </p>
<p>Our research also examined barriers for apartment landlords when it comes to energy efficiency upgrades and installing solar panels. Many worried about issues such as body corporate approval, and physical and legal barriers.</p>
<p>This suggests policies to increase the energy efficiency of the rental housing stock must cater to different dwelling types.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/check-your-mirrors-3-things-rooftop-solar-can-teach-us-about-australias-electric-car-rollout-162085">Check your mirrors: 3 things rooftop solar can teach us about Australia's electric car rollout</a>
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</em>
</p>
<hr>
<h2>So what next?</h2>
<p>The federal government should be commended for spending on energy efficiency. But <a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">further actions are needed</a>.</p>
<p>One potential group that should receive more attention is the real estate industry. Property managers have relationships with both landlords and tenants, and deep knowledge of the rental market. </p>
<p>Resources could, for instance, be invested into teaching property managers about the benefits of rooftop solar and energy efficiency upgrades. Property managers could then include such features in home advertisements and talk about these benefits in discussions with landlords and prospective tenants.</p>
<p>Additional incentives could be provided to investors and property managers who, say, make a home less reliant on gas over time. This would mean as old appliances fail, they’re replaced with efficient electric versions – for hot water, heating and cooking. </p>
<p>What’s more, information about a property’s energy-efficiency performance should be made available to all prospective renters. </p>
<p><a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">The ACT government</a> has made steps towards this. <a href="https://www.justice.act.gov.au/renting-and-occupancy-laws/energy-efficiency-standards-for-rental-homes">It requires</a> a home’s energy efficiency rating be disclosed to prospective buyers at the time of sale, and be disclosed to renters when a rating is available. </p>
<p>This should occur nationally, and be expanded to include the amount of energy generated by solar panels on a property, and the amount of money to be saved on energy bills.</p>
<p>Lastly, tax breaks for property investing, such as negative gearing, should be conditional on rental properties meeting minimum energy efficiency standards. </p>
<p>It’s good to see rental properties on the federal government’s agenda. But our research shows improving Australia’s rental stock requires far more than low-cost financing.</p><img src="https://counter.theconversation.com/content/205928/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bjorn Sturmberg received funding from Energy Consumers Australia for the research on solar for rental properties discussed in this piece (grant number APAPR21003. The views expressed in this document do not necessarily reflect the views of Energy Consumers Australia). He was previously the founder and CEO of SunTenants, a company making solar work for rental properties. SunTenants was aquired by Solar Analytics in 2019. Bjorn Sturmberg remains a shareholder in Solar Analytics.</span></em></p><p class="fine-print"><em><span>Lee White received funding from Energy Consumers Australia (APAPR21003) for the research on solar for rental properties discussed in this piece. The views expressed in this document do not necessarily reflect the views of Energy Consumers Australia. </span></em></p><p class="fine-print"><em><span>Mara Hammerle received funding from Energy Consumers Australia for the research on solar for rental properties discussed in this piece. She currently works at the Centre for Policy Development. </span></em></p>Landlords don’t think renters will pay more for homes with rooftop solar. But the evidence suggests otherwise.Bjorn Sturmberg, Senior Research Fellow, Battery Storage & Grid Integration Program, Australian National UniversityLee White, Fellow, Australian National UniversityMara Hammerle, PhD candidate, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2053802023-05-10T04:15:17Z2023-05-10T04:15:17ZBudget’s energy bill relief and home retrofit funding is a good start, but dwarfed by the scale of the task<figure><img src="https://images.theconversation.com/files/525290/original/file-20230510-27-kqidgu.jpg?ixlib=rb-1.1.0&rect=139%2C8%2C2793%2C1854&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The quality and performance of our housing have big impacts on the <a href="https://theconversation.com/7-star-housing-is-a-step-towards-zero-carbon-but-theres-much-more-to-do-starting-with-existing-homes-189542">environment</a>, <a href="https://theconversation.com/if-youre-renting-chances-are-your-home-is-cold-with-power-prices-soaring-heres-what-you-can-do-to-keep-warm-184472">cost of living</a> and our <a href="https://theconversation.com/die-of-cold-or-die-of-stress-social-housing-is-frequently-colder-than-global-health-guidelines-164598">health and wellbeing</a>. The 2023-24 federal budget’s announcement of $1.6 billion for energy-saving upgrades to housing recognises the broad importance of retrofitting Australian homes.</p>
<p>Until now, much of the focus in Australia has been on improving the quality and <a href="https://theconversation.com/australias-still-building-4-in-every-5-new-houses-to-no-more-than-the-minimum-energy-standard-118820">performance of new housing</a>. Recent changes to the National Construction Code improve <a href="https://ncc.abcb.gov.au/editions-national-construction-code">minimum standards for new housing</a> for the first time in more than a decade.</p>
<p>But more than 10.8 million existing dwellings fall short of the quality and performance needed for a low-carbon and affordable future. We must urgently shift our attention to <a href="https://theconversation.com/the-other-99-retrofitting-is-the-key-to-putting-more-australians-into-eco-homes-91231">delivering a deep retrofit</a> – including solar panels, double glazing and other insulation – of the homes 99% of us live in. This would not only be good for the environment and reduce living costs, it would also improve our health and wellbeing and help increase the reliability of the energy grid.</p>
<p>Most of our existing houses were built before minimum performance standards were adopted. Houses built before 1990 typically perform at a level of <a href="https://www.sustainability.vic.gov.au/research-data-and-insights/research/research-reports/household-retrofit-trials">1-3 stars</a> on the Nationwide House Energy Rating Scheme (NatHERS) (0 being worst, 10 best), compared to the 7 stars required of homes built after this October in most states. </p>
<p>Improving a house from 1 to 5 stars would reduce the energy needed for heating and cooling by about 70% in the Melbourne climate zone. And that means the household’s energy bills and emissions would be much lower too. </p>
<p>All this means the budget announcements are a welcome, but long-overdue, move to start a retrofit revolution in Australia.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1655886484396994561"}"></div></p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-other-99-retrofitting-is-the-key-to-putting-more-australians-into-eco-homes-91231">The other 99%: retrofitting is the key to putting more Australians into eco-homes</a>
</strong>
</em>
</p>
<hr>
<h2>What was announced?</h2>
<p>The 2023-24 budget includes: </p>
<ul>
<li><p>$3 billion in rebates that directly reduce energy bills for over 5 million households</p></li>
<li><p>$1.3 billion to set up the Household Energy Upgrades Fund, which will provide $1 billion to the Clean Energy Finance Corporation to finance home energy upgrades for around 110,000 households </p></li>
<li><p>$300 million to co-fund 60,000 social housing retrofits with the states and territories</p></li>
<li><p>$36.7 million to expand and upgrade NatHERS to apply to existing homes, which will give households better information for decisions on energy upgrades and renting or buying homes</p></li>
<li><p>expand and modernise the Greenhouse Energy Minimum Standards (GEMS) to cover more products. </p></li>
</ul>
<p>This funding will help make our existing housing more energy-efficient and cheaper to run.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1656044118135672833"}"></div></p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/die-of-cold-or-die-of-stress-social-housing-is-frequently-colder-than-global-health-guidelines-164598">'Die of cold or die of stress?': Social housing is frequently colder than global health guidelines</a>
</strong>
</em>
</p>
<hr>
<h2>It’s a start but much more is needed</h2>
<p>Much of the budget is focused on providing short-term relief for vulnerable households facing rising energy bills. But the bigger, long-term challenge is to help existing housing become more sustainable, affordable and liveable.</p>
<p>The cash rebate on energy bills is a short-term fix. The money could be better spent on prevention rather than cure. Retrofitting goes to the heart of the problem – ageing, energy-guzzling homes – and is a responsible use of taxpayer money. </p>
<p>The benefits of retrofitting a house outlive the current residents. It should be seen as an investment in the national housing stock rather than a handout to individual households. A cash rebate to reduce energy bills does nothing to improve housing performance.</p>
<p>The expansion of NatHERS to better account for existing housing is a welcome incentive to upgrade these homes. We need to make sure, though, that the information provided is <a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">robust, reliable and accessible</a> to all households. Households need practical information about the cost-efficient retrofit actions they can take. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/7-star-housing-is-a-step-towards-zero-carbon-but-theres-much-more-to-do-starting-with-existing-homes-189542">7-star housing is a step towards zero carbon – but there's much more to do, starting with existing homes</a>
</strong>
</em>
</p>
<hr>
<p>In other parts of the world, such as the United Kingdom and Europe, information about a home’s performance must be disclosed at point of sale or lease. This helps households make informed decisions. It also provides better data to governments about the quality and performance of the housing stock. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Screenshot of a section of a UK Energy Performance Certificate" src="https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=207&fit=crop&dpr=1 600w, https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=207&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=207&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=260&fit=crop&dpr=1 754w, https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=260&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/522900/original/file-20230426-152-s8qq58.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=260&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The UK’s Energy Performance Certificate provides prospective buyers and renters with detailed information about a home’s energy rating, its energy costs and potential to be improved.</span>
<span class="attribution"><a class="source" href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/5996/2116821.pdf">Source: Energy Performance Certificate, GOV.UK</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>In Australia we have very poor data about our existing housing. We are developing policy and support with one hand tied behind our back.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">We need a 'lemon law' to make all the homes we buy and rent more energy-efficient</a>
</strong>
</em>
</p>
<hr>
<h2>The scale of the retrofit challenge is huge</h2>
<p>Another key issue is the scale and urgency of the retrofit task we face. The budget announcement will make only a small dent in the work to be done. If we assume the performance of most of our existing homes is below-par, that means we will need to deliver deep retrofit to more than 45 homes every hour between now and 2050. </p>
<p>Upgrading 110,000 private homes and 60,000 social housing units is better than nothing, but we clearly need to scale up this work well beyond these numbers. This will require much more ambition and coordination from all levels of government.</p>
<figure class="align-right ">
<img alt="A woman installs a strip of foam insulation around a door" src="https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/525285/original/file-20230510-19-phza6d.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Low-tech solutions like sealing gaps offer great value for money and shouldn’t be overlooked.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>We must also focus more on those who are most vulnerable, such as private renters on low incomes. Low-cost loans are good – if you qualify and have the means to repay them. What will those on the lowest incomes or without access to resources do? </p>
<p>We also need to make sure these loans don’t simply fund technology upgrades when there are cheaper and simpler things to do first, such as sealing gaps and cracks.</p>
<p>Scaling up is more than just a matter of providing support to households. We need to strengthen and develop retrofit capacity across the building industry to ensure demand can be met. </p>
<p>The industry needs certainty about the commitment of all levels of government to assist and sustain a low-carbon retrofit industry over time. This will allow the industry to plan and invest in capacity. This approach would help bolster the struggling construction industry while feeding into Australia’s wider net-zero ambitions.</p><img src="https://counter.theconversation.com/content/205380/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Trivess Moore has received funding from various organisations including the Australian Research Council, Australian Housing and Urban Research Institute, Victorian Government and various industry partners. He is a trustee of the Fuel Poverty Research Network.</span></em></p><p class="fine-print"><em><span>Ralph Horne receives funding from various organisations including the Australian Research Council, Australian Housing and Urban Research Institute, Victorian Government and various industry partners. </span></em></p>Most of our 10.8 million existing homes are in need of a retrofit to improve their performance and cut household energy use and emissions. The $1.6 billion for energy upgrades covers 170,000 homes.Trivess Moore, Senior Lecturer, School of Property, Construction and Project Management, RMIT UniversityRalph Horne, Associate Deputy Vice Chancellor, Research & Innovation, College of Design & Social Context, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2018692023-03-16T05:20:41Z2023-03-16T05:20:41ZWhy are electricity prices going up again, and will it ever end?<figure><img src="https://images.theconversation.com/files/515672/original/file-20230316-20-jqtc08.jpg?ixlib=rb-1.1.0&rect=28%2C0%2C4716%2C3165&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock </span></span></figcaption></figure><p>Households and businesses are set for more hip-pocket pain after regulators on Wednesday released draft details of electricity price rises in four Australian states.</p>
<p>The Australian Energy Regulator <a href="https://www.aer.gov.au/news-release/default-market-offer-2023%E2%80%9324-draft-determination">revealed</a> residential customers on standard plans should brace for price increases of up to 24% in the next financial year. The price rises apply to households in Queensland, New South Wales and South Australia.</p>
<p>The Victorian regulator <a href="https://www.esc.vic.gov.au/media-centre/victorian-default-offer-2023-24-draft-decision">also flagged</a> an electricity price hike of up to 30% in that state.</p>
<p>It’s another blow in an already difficult financial situation for many, as interest rates continue to rise and inflation soars. Consumers are justified in asking: why is this happening? And is there an end in sight?</p>
<figure class="align-center ">
<img alt="Lit-up city skyline at night" src="https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515693/original/file-20230316-28-allg6u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Regulators on Wednesday signalled more electricity price rises.</span>
<span class="attribution"><span class="source">Jono Searle/AAP</span></span>
</figcaption>
</figure>
<h2>The basics, explained</h2>
<p>The regulator released a draft of what’s known as the “default market offer”. It’s basically the maximum amount energy retailers can charge customers on default energy plans. </p>
<p>So what’s a default energy plan? It’s the standard plan you’re on if you didn’t negotiate a special deal with your energy retailer, or if a deal you were on has expired.</p>
<p>According to the ABC, <a href="https://www.abc.net.au/news/2023-03-15/australian-energy-regulator-default-market-offer/102094290">around one million</a> electricity customers in the four states mentioned above are on default market offers.</p>
<p>Many consumers are on default plans because they don’t have the time or inclination to engage with their electricity retailer to negotiate a better deal. Others, quite understandably, find the whole process too confusing to navigate.</p>
<p>That’s why default market offers were introduced. Both the federal and Victorian policies were developed <a href="https://www.esc.vic.gov.au/electricity-and-gas/inquiries-studies-and-reviews/electricity-and-gas-retail-markets-review-implementation-2018">after</a> <a href="https://www.accc.gov.au/media-release/accc-releases-blueprint-to-reduce-electricity-prices">reviews</a> found competition in retail electricity markets was not leading to lower prices for households or small businesses.</p>
<p>The Victorian default offer began <a href="https://www.esc.vic.gov.au/electricity-and-gas/inquiries-studies-and-reviews/electricity-and-gas-retail-markets-review-implementation-2018">in 2019</a>. The federal measure <a href="https://www.aer.gov.au/retail-markets/guidelines-reviews/default-market-offer-prices-2023%E2%80%9324">was applied</a> <a href="https://www.aer.gov.au/retail-markets/guidelines-reviews/default-market-offer-prices-2020%E2%80%9321">in 2020</a>. </p>
<p>The regulators release a draft determination ahead of a final decision, expected soon.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/first-look-at-the-new-settlement-rule-of-australias-electricity-market-has-it-worked-200647">First look at the new settlement rule of Australia's electricity market, has it worked?</a>
</strong>
</em>
</p>
<hr>
<h2>So why the price hike?</h2>
<p>Your electricity bill comprises several different charges. The biggest ones are:</p>
<p><strong>- wholesale energy costs:</strong> the price generators such as coal and gas plants charge your retailer for the electricity delivered to you</p>
<p><strong>- network costs:</strong> the price charged by companies that own the “poles and wires” – transmission lines, transformers, electricity poles and the like – needed to get the electricity to your home</p>
<p><strong>- retail costs:</strong> the total amount needed by an electricity retailer to operate – such as issuing bills, providing customer service, marketing themselves – as well as to make a reasonable profit. </p>
<p>Regulators calculate the default market offer by considering each of these price components.</p>
<figure class="align-center ">
<img alt="electricity pole and wires" src="https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515694/original/file-20230316-22-rp5i7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Network costs – or the ‘poles and wires’ charges – form part of your electricity bill.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>The increased default market offers are mostly due to increases in wholesale prices. </p>
<p>Wholesale prices increased in recent months almost entirely as a result of sanctions imposed on Russia following its invasion of Ukraine. It led to a global shortage of natural gas. This was exacerbated when Russia <a href="https://www.bloomberg.com/news/articles/2022-05-31/russia-to-cut-gas-exports-to-shell-orsted-over-rubles-dispute">withdrew gas</a> supplies from the European market. </p>
<p>Even though the energy shocks were happening half a world away from Australia, it affected domestic gas prices here. Why? Because most of Australia’s east coast gas is exported, which means its price is largely determined by the global price. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/energy-bills-are-spiking-after-the-russian-invasion-we-should-have-doubled-down-on-renewables-years-ago-179336">Energy bills are spiking after the Russian invasion. We should have doubled-down on renewables years ago</a>
</strong>
</em>
</p>
<hr>
<p>This could have been avoided if the federal government has a mechanism to keep some of that gas for the domestic market – in other words, if it had a so-called “gas reservation policy”. But the current and previous governments have <a href="https://www.smh.com.au/business/companies/it-s-ridiculous-architect-of-wa-policy-calls-for-national-gas-reservation-20220616-p5au8q.html">refused</a> to implement this.</p>
<p>The federal regulator said the planned retirement of AGL’s ageing Liddell coal-fired power station in the NSW Hunter Valley contributed to its decision. Liddell is one of the biggest coal-fired generators in the national electricity market, and the closure is likely to lead to a short-term tightening of supplies. </p>
<p>Another factor affecting the regulators’ decision relates to a strategy electricity retailers use to protect themselves against volatile wholesale prices in future. The strategy, known as hedge contracts, <a href="https://www.aemc.gov.au/energy-system/electricity/electricity-market/spot-and-contract-markets">fixes the wholesale price</a> retailers pay for electricity over a long period – up to several years.</p>
<p>The price set in hedge contracts struck over the past year or so was influenced by Australia’s <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8462.12492">domestic gas crisis</a> in 2022, which caused massive rises in wholesale electricity prices. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="gas burner" src="https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/492032/original/file-20221027-18054-ubewpk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">AUstralia’s gas prices are linked to global markets.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>What to expect down the track</h2>
<p>Australian Energy Regulator chair Clare Savage on Wednesday said the price increases <a href="https://www.abc.net.au/news/2023-03-15/australian-energy-regulator-default-market-offer/102094290">could have been much higher</a>, if not for intervention by the Albanese government late last year to cap prices in Australia’s gas and coal markets.</p>
<p>Climate Change and Energy Minister Chris Bowen says those price caps have saved households between A$268 and $530.</p>
<p>The caps are likely to cause further falls in the default market offer in coming years. But the policy appears to be only an interim measure until the global supply shortage eases.</p>
<p>In the longer term, renewable energy offers a ray of hope.</p>
<p>The federal government has set a target of 82% renewable electricity by 2030. But of course, a few significant <a href="https://www.climatecouncil.org.au/understanding-whats-next-for-australias-main-electricity-market/">complementary measures</a> – such as more investment in transmission networks and energy storage – are needed.</p>
<p>This investment would support the transition to a zero-emissions electricity sector. Importantly, it would also insulate long-suffering consumers from volatile fossil fuel prices.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/will-your-energy-bills-ever-come-down-only-if-labor-gets-serious-with-the-gas-majors-193298">Will your energy bills ever come down? Only if Labor gets serious with the gas majors</a>
</strong>
</em>
</p>
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<img src="https://counter.theconversation.com/content/201869/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ariel Liebman has provided occasional advice to, and has received funding from, companies across the energy sector. He currently receives funding from the Australian Research Council.</span></em></p>Households and businesses are set for more hip-pocket pain after regulators flagged hefty electricity price rises in four Australian states.Ariel Liebman, Ariel Liebman Director, Monash Energy Institute and Professor of Sustainable Energy Systems, Faculty of Information Technology, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1974762023-01-20T06:14:06Z2023-01-20T06:14:06ZHow to help UK households manage rising energy bills - and decarbonise at the same time<figure><img src="https://images.theconversation.com/files/505172/original/file-20230118-12-bzplp3.jpg?ixlib=rb-1.1.0&rect=53%2C0%2C890%2C664&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">UK households's rising energy costs.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cost-living-crisis-money-on-home-2178239855">Ink Drop/Shutterstock</a></span></figcaption></figure><p>The <a href="https://www.ofgem.gov.uk/energy-data-and-research/data-portal/wholesale-market-indicators">cost of electricity rose sixfold</a> between January 2021 and November 2022 as the impact of the COVID pandemic combined with Russia’s invasion of Ukraine to push up wholesale energy prices.</p>
<p>Without government intervention, household electricity costs could have grown sixfold too. But the <a href="https://theconversation.com/britains-energy-price-cap-left-many-people-confused-especially-conservative-voters-193985">energy price guarantee (EPG) launched in September 2022</a> was designed to limit the per-unit price charged to all consumers. </p>
<p>Under the scheme, a typical customer should pay around £2,500 per year (£3,000 from April 2023), according to government estimates. The government then compensates suppliers for the difference between the per-unit cost they face to buy energy and the maximum they can charge to customers. But this is a costly burden and the public funds used to do this could be deployed to support households in better ways.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/how-the-uk-energy-crisis-plan-will-affect-bills-and-price-inflation-an-economist-explains-190586">How the UK energy crisis plan will affect bills and price inflation — an economist explains</a>
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</em>
</p>
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<p>When discussing energy, there are also environmental considerations, of course. Heating and lighting UK homes account for <a href="https://www.gov.uk/government/statistics/final-uk-greenhouse-gas-emissions-national-statistics-1990-to-2020">almost a fifth</a> of the country’s greenhouse gas emissions. And efforts to reduce these emissions are moving far too slowly. According to government data, the residential sector, alongside agriculture, has <a href="https://www.gov.uk/government/statistics/final-uk-greenhouse-gas-emissions-national-statistics-1990-to-2020">the worst record for reducing carbon emissions</a> over the last 30 years.</p>
<p>And with governments becoming increasingly aware of the need to tackle this problem, wholesale energy prices will probably remain high as more taxes on carbon emissions are introduced globally. But until emission taxes become a reality, it could be more effective to overhaul energy policy to pursue two main aims: </p>
<ul>
<li>supporting energy-poor households in weathering the energy crisis, and </li>
<li>supporting the government’s ambitious net-zero strategy, which includes a target of installing 600,000 heat pumps by 2028. </li>
</ul>
<p>Meeting these goals will take a new approach, both to energy support and to how the government deploys its transition strategies, including more local and regional collaboration.</p>
<h2>A broader support system</h2>
<p>While the EPG is a step towards the first goal, it ignores the second. Indeed, <a href="https://warwick.ac.uk/fac/soc/economics/research/centres/cage/publications/workingpapers/2022/how_large_is_the_energy_savings_potential_in_the_uk/">the analysis I conducted with my colleagues</a> at the University of Warwick highlights that the EPG has regressive effects. It reduces energy costs for families with high incomes and high usage. </p>
<p>At 2022 market prices (represented by the dashed blue line in the chart below) an increase in energy use leads to a pronounced increase in annual bills. Under the EPG (the solid orange line) bills increase less sharply as usage goes up. This means that super-consumers will benefit most from the EPG. </p>
<p>Within the roughly 280,000 UK households with an annual income over £150,000, <a href="https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp644.2022.pdf">around 14,000 consume more than twice as much energy</a> as nearly 50% of all other households in this high-income group.</p>
<p><strong>Rising energy costs versus consumption</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A line graph showing energy bills increasing more at market prices than under the government's EPG, as described in the paragraph above." src="https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=437&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=437&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=437&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=549&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=549&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505170/original/file-20230118-24-qem2ms.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=549&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Estimated increase in energy bills with electricity at market prices and under the EPG.</span>
<span class="attribution"><a class="source" href="https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp644.2022.pdf">Ofgem, Department for Levelling Up, Housing & Communities</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>A lack of focus on energy efficiency investments is also an issue in national energy policy. And confusing short-lived policies, lengthy paperwork and late reimbursements can mean programmes <a href="https://www.ofgem.gov.uk/publications/bus-monthly-scheme-update">fail to fully spend budgets</a>. </p>
<p>This can trigger a termination of a scheme until a new one is drafted, leaving customers to wonder whether energy efficiency investments are worthwhile if the government cannot make up its mind about what to provide. For example, the plateauing of solar panel installations <a href="https://centaur.reading.ac.uk/73053/3/Hanna%20Leach%20Torriti%20Renewable%20Energy%20paper.pdf">has been linked</a> to the <a href="https://www.iema.net/articles/solar-sector-slams-halving-of-fits">halving of the government’s renewable energy feed-in-tariff</a> scheme in 2012. </p>
<p>Conversations with local councils during our research into this issue have also highlighted that despite more closely understanding the needs of the population, local councils feel underfunded and under-supported to help with the transition to net zero. And national government programmes sometimes miss important segments of the rural, rental, and middle-income population, for example.</p>
<p>A broader and more coherent strategy is needed, under which the national government works with local authorities. Our research shows that 10.9 million properties in England alone could benefit from energy efficiency investments in terms of reduced energy use, reduced energy bills, and reduced carbon emissions. </p>
<p>Indeed, the next graph shows that at least 5.8 million properties would benefit from improved wall insulation such as solid or cavity wall insulation, 2.8 million properties would benefit from roof or loft insulation and 7.1 million properties could benefit from floor insulation. Further, there are at least 3.7 million properties that could benefit from condensing boiler upgrades.</p>
<p><strong>Residential energy efficiency improvements</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A bar chart showing how many thousands of UK properties would benefit from a list of energy efficiency measures including draught proofing, boiler upgrades and wall insulation, as described in the paragraph above." src="https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=320&fit=crop&dpr=1 600w, https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=320&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=320&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=402&fit=crop&dpr=1 754w, https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=402&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/505171/original/file-20230118-7572-usmvs7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=402&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Number of properties with estimated potential for energy efficiency improvements (thousands).</span>
<span class="attribution"><a class="source" href="https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp644.2022.pdf">Department for Levelling Up, Housing & Communities</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Helping at many levels</h2>
<p>But how can these investments be made, while still supporting families who struggle to pay their bills? Replacing the EPG with a more progressive price structure that keeps revenues neutral would be a solid first step. Our research suggests that a two-tier tariff could better target energy use subsidies towards low-income households with low energy use while charging market rates for high users who can afford to pay higher rates and invest in energy efficiency. </p>
<p>And if receiving a large bill still does not encourage families to use less energy, a renewed push to encourage smart meter uptake could help people plan their energy use. This could also open up new opportunities for conservation and demand management, as my <a href="https://www.nber.org/papers/w30816">upcoming research</a> on water conservation in the US shows.</p>
<p>Community-level strategies could also help the government support households on their journey towards energy efficiency. <a href="https://pubsonline.informs.org/doi/abs/10.1287/mksc.2021.1306">Research in this area</a> shows that firsthand experience and word of mouth can go a long way to convincing people to adopt green investments. Neighbours joining forces might help reduce contractor costs.</p>
<p>It will take a joint effort, at all levels of government, to reach net zero without leaving the most vulnerable behind. At the local level, organisations with strong community ties, such as faith-based groups, could help restore trust in energy policies that have flip-flopped too often in the past. Local councils are well-positioned to identify these pockets of trust and bring them to fruition. Only by recognising the role of these forces can national policy succeed in tackling this challenge.</p><img src="https://counter.theconversation.com/content/197476/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ludovica Gazze receives funding from the ESRC and J-PAL. </span></em></p>A two-pronged approach to energy support would see targeted help with bills and more efficient housing.Ludovica Gazze, Assistant Professor in the Department of Economics, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1957022022-12-13T09:49:55Z2022-12-13T09:49:55ZOne in four homes is ‘hard to decarbonise’ – without help their inhabitants could get stuck in fuel poverty<figure><img src="https://images.theconversation.com/files/499528/original/file-20221207-1298-6wmhjd.jpg?ixlib=rb-1.1.0&rect=8%2C0%2C5848%2C3898&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Existing decarbonisation measures are often unsuitable for the least efficient homes.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mother-son-trying-keep-warm-by-2206535659">Monkey Business Images/Shutterstock</a></span></figcaption></figure><p>Millions of people are facing soaring energy bills this winter. Yet according to <a href="https://www.nature.com/articles/s41560-022-01075-w">our research</a>, at least 20% of homes in the UK will continue to use large amounts of energy. We have found that existing energy <a href="https://www.gov.uk/government/news/government-joins-with-households-to-help-millions-reduce-their-energy-bills">efficiency measures</a> such as improving home insulation and installing air source heat pumps are not enough to help these homes move out of the very lowest energy performance criteria.</p>
<p>These properties are called <a href="https://www.theccc.org.uk/publication/analysis-on-abating-direct-emissions-from-hard-to-decarbonise-homes-element-energy-ucl/">hard to decarbonise homes</a> and include a wide range of unconventional residential buildings such as high rise blocks, homes with space constraints or those with heritage status. An estimated <a href="https://www.nature.com/articles/s41560-022-01075-w">one in four homes</a> worldwide are classified as hard to decarbonise, accounting for 25% of all direct <a href="https://www.theccc.org.uk/wp-content/uploads/2019/08/Analysis-on-abating-direct-emissions-from-%E2%80%98hard-to-decarbonise%E2%80%99-homes-Element-Energy-UCL.pdf">residential sector emissions</a>. </p>
<p>But homes are the <a href="https://www.nature.com/articles/s41560-022-01075-w">fourth largest</a> source of carbon emissions in the world. Failing to find affordable ways to improve the energy performance of the least efficient homes will undermine the UK’s ability to achieve its carbon reduction targets while trapping vulnerable households in fuel poverty. </p>
<h2>Energy inefficient homes</h2>
<p><a href="https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/energyefficiencyofhousinginenglandandwales/2022">Energy performance certificates</a> indicate the energy efficiency of buildings in the UK. Buildings are rated according to their energy features, including the building materials, heating systems and insulation. The ratings run from A to G, where A is the most efficient and cheapest to run.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An energy efficiency rating scale ranked from A (most efficient) to G (least efficient)." src="https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/499525/original/file-20221207-11795-bl1qaz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Energy Performance Criteria are used to rate the energy efficiency of buildings in the UK.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/energy-efficiency-concept-rating-chart-108074963">MPanchenko/Shutterstock</a></span>
</figcaption>
</figure>
<p>The UK’s housing stock has an average rating of D. But we found that between 60% and 80% of hard to decarbonise homes have an energy performance rating of F or G. </p>
<p>However, existing decarbonisation measures are often unsuitable for these homes. </p>
<p><a href="https://www.cse.org.uk/advice/renewable-energy/air-source-heat-pumps">Air source heat pumps</a>, for example, cannot be installed in homes with limited external space. The heat pump itself is small but needs to be positioned somewhere outside with unobstructed air flow. </p>
<p>High rise residential buildings can also be complex and expensive to insulate.</p>
<p>Renovating multi-storey buildings requires costly scaffolding. <a href="https://doi.org/10.1080/10286608.2021.1969371">Split incentives</a> can arise where the landlord is forced to make changes that, through reduced utility bills, will only benefit the tenant. And the priorities of different stakeholders often compete with one another – leaseholders are more likely to prioritise avoiding paying improvement charges, the freeholder may prioritise upgrading their property and tenants will prioritise savings on their energy bills. </p>
<p>In the absence of fitting decarbonisation measures, those occupying hard to decarbonise homes will be exposed to higher energy bills. The annual <a href="https://www.citizensadvice.org.uk/cymraeg/amdanom-ni/about-us1/media/press-releases/out-in-the-cold-draughty-homes-mean-a-third-of-cash-spent-on-energy-bills-goes-straight-out-the-window-warns-citizens-advice/#:%7E:text=From%201%20October%202022%2C%20the,brought%20to%20EPC%20rating%20C.&text=Citizens%20Advice%20estimates%201%2C145%2C545%20live%20in%20homes%20with%20EPC%20rating%20F.">fuel costs</a> associated with an F-rated property are estimated to be at least £500 a year higher on average than they are for a D-rated home.</p>
<h2>Trapped in fuel poverty</h2>
<p>Vulnerable households, including those on low incomes and with physical and mental health issues, are <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782?via%3Dihub">disproportionately represented</a> within the hard to decarbonise housing stock. The situation of these occupants will be <a href="http://doi.org/10.1038/s41560-022-01075-w">exacerbated</a> by high energy costs and cold homes. </p>
<p>These people may be priced out of heating their home to a safe and comfortable level over the winter months. This so-called fuel poverty increases the chances of suffering poor mental and physical health. According to national fuel poverty charity NEA, <a href="https://www.nea.org.uk/news/271120-01/">8,500 deaths</a> in the UK were due to a cold home in 2020. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5250%2C3481&q=45&auto=format&w=1000&fit=clip"><img alt="Hand opening a wallet and revealing change in front of a white radiator." src="https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5250%2C3481&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/499524/original/file-20221207-4043-riqkzh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Occupants of the least efficient homes are exposed to escalating energy prices.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hand-opening-wallet-few-coins-front-2205592199">Maren Winter/Shutterstock</a></span>
</figcaption>
</figure>
<p>UK homes are transitioning towards low carbon heat sources. But this could restrict future fossil fuel use to those occupying hard to decarbonise homes and risks exposing already vulnerable households to escalating prices. Households are already <a href="https://www.theguardian.com/business/2022/nov/16/uk-inflation-rate-energy-price-rises">paying 90% more</a> on average for gas, electricity and other fuels than they were last November.</p>
<p>Failing to find solutions for hard to decarbonise homes will also leave occupants vulnerable to <a href="https://www.nature.com/articles/s41560-022-01075-w">“asset stranding”</a>. This is where hard to decarbonise homes become prematurely obsolete and unappealing to purchasers because they are cold and expensive to run. </p>
<h2>Achieving a zero carbon future</h2>
<p>Addressing hard to decarbonise homes is a complex challenge. While it is <a href="https://committees.parliament.uk/publications/8742/documents/88647/default/#:%7E:text=The%20CCC%20estimates%20that%20an,on%20average%2C%20under%20%C2%A310%2C000.">widely accepted</a> that all homes will need to be energy efficient by 2050, nothing is being done to help people living in hard to decarbonise homes.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man standing at the top of scaffolding installing insulation to the external wall of a building." src="https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/499535/original/file-20221207-4529-es1h8m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">High rise residential blocks can be expensive to insulate.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/finishing-mineral-polystyrene-insulation-facade-residential-2104872782">Korostylev Dmitrii/Shutterstock</a></span>
</figcaption>
</figure>
<p>But it is the occupants of these properties that may hold the key to identifying viable solutions. These people know their homes best and can offer insight into how to live in energy <a href="https://doi.org/10.1080/14036096.2019.1568296">inefficient homes</a>. Research has demonstrated people’s ability to adapt energy efficient technologies to the particularities of their <a href="https://doi.org/10.1142/S1363919608002072">homes</a> in the past. </p>
<p>From 2005 to 2012, a <a href="https://doi.org/10.1016/j.enpol.2012.12.038">study</a> in Finland recorded 192 instances of user innovation or modification to heat pump or wood pellet burning systems. The innovations included redesigning the controls or the addition of protective housing for outdoor units and improved the efficiency, suitability or cost of the heating systems. These users accelerated the development of these renewable technologies by modifying them to cater for the variation in their homes.</p>
<p>Taking an occupant led approach could reveal solutions that would enable the UK to meet its climate targets and better protect its most vulnerable inhabitants.</p><img src="https://counter.theconversation.com/content/195702/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aimee Ambrose currently receives funding from the Arts and Humanities Research Council and Horizon Europe.</span></em></p><p class="fine-print"><em><span>Rokia Raslan receives funding from BEIS, British Council, SEAI.</span></em></p>Existing decarbonisation measures are often unsuitable for the least efficient homes – failing to improve their performance will trap vulnerable people in fuel poverty.Aimee Ambrose, Professor of Energy Policy, Member of Fuel Poverty Evidence and Trustee of the Fuel Poverty Research Network, Sheffield Hallam UniversityRokia Raslan, Associate Professor in Building Performance Simulation, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1939932022-11-30T11:28:04Z2022-11-30T11:28:04ZBritish pubs are closing at an alarming rate – but the hospitality sector is fighting back<figure><img src="https://images.theconversation.com/files/497218/original/file-20221124-24-xhtjhh.jpg?ixlib=rb-1.1.0&rect=65%2C8%2C5398%2C3604&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Raise a glass to your local this winter.</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/Hozdtk6Y8bs">roman synkevych / unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>A licensed venue <a href="https://www.morningadvertiser.co.uk/Article/2022/10/20/number-of-licensed-premises-closed-in-2022">closed every hour</a> in Britain during the third quarter of 2022 and the nation’s pubs are “<a href="https://www.thecaterer.com/news/pubs-vanishing-increasing-rate-2022-altus">vanishing</a>” at an alarming rate. Such troubles show no signs of easing, with hopsitality industry bodies warning more than one-third of the sector is <a href="https://www.ukhospitality.org.uk/news/621638/">at risk of failure</a> in early 2023 due to the rising cost of doing business. </p>
<p>After <a href="https://www.bbc.co.uk/news/uk-england-manchester-62468609">surviving COVID</a> (many of them barely), UK hospitality businesses are now facing <a href="https://www.theguardian.com/business/2022/aug/30/thousands-of-uk-pubs-face-closure-without-energy-bills-support">soaring energy bills</a>. Celebrity chef Tom Kerridge recently revealed that electricity costs for his gastropub in Buckinghamshire have <a href="https://www.independent.co.uk/life-style/food-and-drink/tom-kerridge-energy-bills-pub-b2158245.html">risen by 600%</a> this year. Food and drinks businesses are also dealing with <a href="https://www.bighospitality.co.uk/Article/2022/06/23/record-staff-shortages-causing-hospitality-to-lose-21bn-in-trade">difficulties finding staff</a> and an unstable political environment that is not <a href="https://www.morningadvertiser.co.uk/Article/2022/07/18/bii-how-can-government-support-pubs">prioritising small business support</a>.</p>
<p>On the other side of the bar, customer numbers and spending power are in freefall due to the <a href="https://www.bbc.co.uk/news/topics/cljev4jz3pjt">cost of living crisis</a>. Consumer confidence is at a <a href="https://www.marketingweek.com/consumer-confidence-record-low/">record low</a> at a <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/impact-of-economic-uncertainty-and-rising-energy-costs-on-confidence-in-hospitality?utm_source=newsletter_daily&utm_medium=email&utm_campaign=03-Nov-2022&cid=DM1040351&bid=2073940985">particularly difficult time</a> for the hospitality business – the month of December often brings in <a href="https://www.morningadvertiser.co.uk/Article/2022/01/19/Did-pubs-bars-or-restaurants-experience-worst-Christmas-trade#:%7E:text=December%20is%20such%20a%20crucial,staff%20productivity%20are%20factored%20in.">three times as much trade</a> as a normal month. Hospitality bosses are also concerned that upcoming <a href="https://www.bbc.co.uk/news/business-63791844">transport strikes</a> could add to their woes if Christmas parties are cancelled. The industry believes strike action in December 2022 alone could cost the trade <a href="https://www.ukhospitality.org.uk/news/624328/STRIKE-RESOLUTION-NEEDED-AS-HOSPITALITY-SET-TO-LOSE-1.5-BILLION.htm">£1.5 billion in sales</a>.</p>
<p>Smaller, independent or family-run hospitality businesses are particularly exposed to such pressures. But breweries are struggling with similar problems. This is already an <a href="https://www.sciencedirect.com/science/article/pii/S1876610215007195">energy-intensive industry</a>, making power price rises even more painful. Supply issues have also caused the price of carbon dioxide used in the brewing process <a href="https://www.ft.com/content/1899f5c0-498b-4606-8627-22df949aec96">to rise tenfold</a> between this year and last. When combined with cashflow problems stemming from pandemic-era lockdowns, this has resulted in nearly <a href="https://beernouveau.co.uk/2022-closures/">50 brewery closures so far in 2022</a>, with more expected in the coming months. </p>
<p>This state of affairs is not just affecting badly run pubs or independent businesses – all pubs are at risk. The Five Bells Inn in Devon, <a href="https://www.top50gastropubs.com/Pubs/UK/Devon/the-five-bells-inn.html">a highly regarded gastropub</a>, has <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/Top-50-Gastropub-the-Five-Bells-Inn-Cullompton-closed?utm_source=newsletter_daily&utm_medium=email&utm_campaign=04-Nov-2022&cid=DM1040667&bid=2074917209">recently announced its closure</a> due to “lockdowns and the economic downturns they caused”. Nationwide pub chain Wetherspoons hasn’t escaped these pressures either, recently putting <a href="https://www.thesun.co.uk/money/19939462/wetherspoons-sells-off-thirty-two-pubs/">32 pubs up for sale</a>.</p>
<p>When local pubs and breweries close it’s <a href="https://www.bii.org/BII/Campaigns/not-just-a-pub.aspx">not just a pub</a> that is lost, it’s often a <a href="https://www.tandfonline.com/doi/full/10.1080/00343404.2014.989150">community hub</a>, particularly in <a href="https://journals.sagepub.com/doi/abs/10.1177/0269094214544276?casa_token=W651ohl46aoAAAAA%3A9OUIh81GNGZ3GDP5fYpX5AbQOL1j7j9Jt7FwksErlsDsVVbZq89EpDkb29BUZiK1tkL-w348E3a_&journalCode=leca">rural areas</a> where hospitality businesses might be the lone employers and are often a significant part of local supply chains. In Britain especially, losing a pub – not to mention losses in the thriving beer and <a href="https://www.tandfonline.com/doi/full/10.1080/00076791.2015.1027692?casa_token=eaUovX-YOEgAAAAA%3AdkIC_kPGcNUXyW-i2_OpV1sbmFFgyfr8HCY3ALEnfaP2ifiZ84IJG35rhnnLjUAKEtQ7PY1OYK7y">brewing culture</a> – can extinguish a part of the local <a href="https://link.springer.com/chapter/10.1057/9781137466181_14">heritage and culture</a>, and a key element of the <a href="https://www.beerguild.co.uk/news/englands-pubs-toast-tourism/">tourism and visitor economy</a>. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1587344584463581185"}"></div></p>
<h2>Survival techniques</h2>
<p>Pubs are trying to adapt to survive in this increasingly difficult environment. Some are trying “<a href="https://www.beerguild.co.uk/news/cambridge-pub-the-tollemache-arms-launching-dining-in-the-dark-to-battle-rising-energy-bills/">dining in the dark</a>” events during which venues turn out the lights and operate by candlelight. Others have launched <a href="https://www.morningadvertiser.co.uk/Article/2022/11/04/star-pubs-bars-to-offer-work-from-the-pub-packages">work from pub packages</a> designed to entice people to “work from home” at their local rather than their kitchen table. With these initiatives, businesses are trying to attract new customers or even just offer something different to entice cash-strapped regulars. </p>
<p>Some publicans are also cutting down the space they use or even <a href="https://www.instagram.com/p/CkOQqxaMvep/">moving to smaller venues</a> in response to higher costs, while others are <a href="https://www.bbc.co.uk/news/uk-wales-63501972">reducing the variety of drinks they offer</a>. But these efforts won’t be enough to save many pubs with spiralling costs driving the <a href="https://www.bbc.co.uk/news/uk-scotland-scotland-business-63379044">average price of a pint of beer to £7</a> in some cities. This is likely to make a pint unaffordable for people that are already tightening their belts ahead of a difficult winter. </p>
<p>So what can be done to help brewers and pubs survive the difficult upcoming months? The industry has called for more <a href="https://campaignforpubs.org.uk/supportpubsnow/">government support</a> in the form of statutory rent codes that provide the right to a rent review, a freeze on beer duty, reduced VAT and tailored support packages for costs such as energy. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1593510394278154240"}"></div></p>
<p>Sadly the recent autumn budget statement from the government included little help for pubs and breweries, aside from <a href="https://www.bii.org/BII/BII/News/CEO-Updates-Articles/BII-responds-to-the-Chancellors-autumn-statement.aspx">business rates support</a>. It was received with disappointment across the industry and led to protests in the days after the UK’s chancellor of the exchequer, Jeremy Hunt, announced the details. </p>
<p>In times of greater economic prosperity people could be encouraged to “use it or lose it” with regard to their local pubs and breweries. But consumers have lost a lot of spending power in recent months, as shown by a <a href="https://www.morningadvertiser.co.uk/Article/2022/11/03/Hospitality-sector-sales-see-decline-in-October?utm_source=newsletter_daily&utm_medium=email&utm_campaign=03-Nov-2022&cid=DM1040351&bid=2073940985">7.1% fall in hospitality sales</a> in October. Similarly, Christmas bookings for pubs have <a href="https://www.morningadvertiser.co.uk/Article/2022/11/21/christmas-bookings-at-pubs-in-decline?utm_source=newsletter_daily&utm_medium=email&utm_campaign=21-Nov-2022&cid=DM1043720&bid=2086963973">dropped by 20%</a>. </p>
<p>For those consumers who do have money to spend on hospitality, no matter how little, thinking carefully about where to spend it could mean the difference between a pub or brewery surviving this winter. Choosing a local pub, an independent that may be struggling to survive, or ordering beer from a local brewery could ensure that business is still there the next time you go for drinks.</p>
<p>A <a href="https://campaignforpubs.org.uk/supportpubsnow/">Campaign for Pubs petition</a> has also been set up by industry groups including the <a href="https://britishpubconfederation.co.uk/">British Pub Confederation</a>. And another hospitality organisation, the Campaign for Real Ale (CAMRA), has suggested helping to save local pubs at risk of closure through <a href="https://camra.org.uk/campaign_resources/">community ownership</a> or by nominating them as an “<a href="https://camra.org.uk/campaign_resources/nominating-a-pub-as-acv-a-camra-guide/">Asset of Community Value</a>”. The latter means that, if put up for sale, locals have six weeks to delay the sale for up to six months to get time to put together a bid to buy it and keep it open to serve the community. </p>
<p>The UK hospitality industry is warning of a “<a href="https://www.theguardian.com/business/2022/oct/24/we-need-help-now-uk-hospitality-warns-of-tidal-wave-of-closures-as-crises-loom">tidal wave of closures</a>”. Without more help, many of Britain’s pubs and breweries could disappear for good.</p><img src="https://counter.theconversation.com/content/193993/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Local pubs and breweries are disappearing across the UK due to the rising cost of living and doing business.Victoria Wells, Professor of Sustainable Management, University of YorkNadine Waehning, Lecturer in Marketing, University of YorkLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1939972022-11-22T16:52:23Z2022-11-22T16:52:23ZSmart meters show your energy use but here’s how you can actually save money<figure><img src="https://images.theconversation.com/files/495895/original/file-20221117-19-2zesyu.jpg?ixlib=rb-1.1.0&rect=24%2C0%2C8155%2C5444&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There are gaps in UK households' understanding of their energy usage</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/smart-energy-meter-kitchen-measuring-electricity-2116196165">Daisy Daisy/Shutterstock</a></span></figcaption></figure><p>Soaring energy prices are squeezing homes and businesses across the UK and Europe, prompting leaders to implement support measures such as the UK’s <a href="https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022">Energy Price Guarantee</a>. Yet it is often unclear to a consumer how much they are spending on energy. For those not on prepayment meters, there is no direct fee each time a light is switched on or a cup of tea is made. </p>
<p>Energy bills also tend to be paid in average monthly sums spread across a year. This protects households from winter price rises when energy use increases. But it also means that the amount households pay for energy is not directly linked to their daily or monthly energy consumption. This separates households from their energy use and the bills they pay. </p>
<p>Smart electricity meters could change how households use energy. They track a household’s energy use and express the cost on an in-home display. </p>
<p>There are now <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1099629/Q2_2022_Smart_Meters_Statistics_Report.pdf">25.6 million</a> smart meters installed in homes and businesses across the UK. Though the number of installations varies, an additional one million smart meters are installed on average each year. </p>
<p>The UK government believe that smart meters could cut household energy bills by 2–3% on average based on trials from their nationwide <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/831716/smart-meter-roll-out-cost-benefit-analysis-2019.pdf">smart meter roll-out programme</a>. But research <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/277045/key_findings_summary_quantitative_sm_public_attitudes_research_wave_4.pdf">cautions</a> against the benefits of smart meters for households. </p>
<h2>Not so smart meters</h2>
<p>A smart meter can reveal which of a household’s appliances use the most energy. Their proponents argue that they <a href="https://www.sciencedirect.com/science/article/pii/S0301421516300039#bib13">support</a> behavioural change and incite discipline over energy use by raising household energy consciousness. But the effectiveness of a smart meter depends on the decision of an individual not to consume or waste energy. </p>
<p><a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/657766/Leeds_Core_Cities_Green_Deal_Final_Report.pdf">Research</a> that I co-authored found evidence that there are gaps in UK households’ understanding of their energy usage. In other words, many households exhibit what we call a low level of “energy literacy”. </p>
<figure class="align-center ">
<img alt="A technician servicing his boiler." src="https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/496464/original/file-20221121-23-qc5bn3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Many households do not understand their heating control systems.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/technician-servicing-gas-boiler-hot-water-182175488">Alexander Raths/Shutterstock</a></span>
</figcaption>
</figure>
<p>Heating control systems can be complex, often involving timers and zonal controls that regulate the temperature across different rooms. We found that it was common for people to misunderstand these systems. </p>
<p>Some of the households interviewed admitted that they did not know how their boiler worked or how to adjust its controls. Others had their heating on continuously and simply turned the boiler on and off at the wall. This can lead to over or under heating parts of a house, resulting in wasted energy. It is therefore likely that those who respond to the prompts offered by smart meters will already be conscientious energy users. </p>
<p>However, the move away from physical heating controls may exacerbate the problem. Not all people will be able and willing to engage with smart meters. While there is a lack of research into the extent of energy literacy across different social groups in the UK, digital exclusion may leave some households still unable to control their own heating. </p>
<p>Understanding fuel bills is also a part of energy literacy. Research shows that many households have a limited understanding of their energy bills. In a 2021 survey, <a href="https://cdn.literacytrust.org.uk/media/documents/Energy_bills_and_literacy_report_-_final_002.pdf">just 46.6%</a> of the 2,520 UK adult bill payers questioned were able to identify the correct definitions of six terms commonly used on their energy bills. Without guidance, many households will be unable to use the information provided by their smart meter effectively. </p>
<p>Energy suppliers instead accrue considerable benefits from smart meters. A smart meter delivers <a href="https://www.sciencedirect.com/science/article/pii/S0140988314001649">information</a> about a home’s energy use to suppliers remotely and reduces the necessity for routine door-to-door meter reads. </p>
<h2>Finding a place for smart meters</h2>
<p>Smart meters may prove valuable for households on variable fuel tariffs, where the per unit price of energy they pay varies at the discretion of their energy supplier. The cost of energy rises during the hours where energy demand is at its highest and falls during periods of lower total energy use.</p>
<p>If smart meters are able to convey instant and future unit energy prices then consumers can shift energy intensive activities, such as washing clothing, towards cheaper periods including overnight. The National Grid is trialling a <a href="https://www.bbc.co.uk/news/business-63483668">scheme</a> which will compensate energy suppliers for offering households discounts on their electricity bills for reducing their energy use during peak times. The scheme applies to homes with smart meters, who receive an alert 24 hours before the test session. </p>
<figure class="align-center ">
<img alt="Two Tesla Powerwalls, the company's household energy storage system, mounted on a wall." src="https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/495897/original/file-20221117-23-6q2h5m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Battery storage can save homeowners money on their energy bills.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/austin-texas-usa-july-19th-2021-2015851994">Roschetzky Photography/Shutterstock</a></span>
</figcaption>
</figure>
<p>Energy can also be stored in house batteries and in electric cars. Variable tariffs would allow them to be recharged when energy is cheap and used during periods of peak energy use. Initial trials conducted by renewable energy company Octopus Energy revealed that charging batteries using variably priced energy could save households up to <a href="https://octopus.energy/blog/agile-powervault-trial/">£580 per year</a>. </p>
<p>This would also accelerate the transition towards electrified household heating. If enough homes use variably priced energy to recharge storage batteries and use them to satisfy their peak energy demand, the requirement for backup energy sources to bolster electricity generation during periods of high demand is reduced. </p>
<p>Smart meters may be ineffective at encouraging greater energy consciousness. But in the future they may allow households to take advantage of a flexible energy grid built around variable pricing and energy storage. But given the current energy crisis, there is limited opportunity to switch energy tariffs. When the situation changes in the future, it is likely that smart meters will play a larger role in household energy consumption.</p><img src="https://counter.theconversation.com/content/193997/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Glew does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government is rolling out smart meters across the UK, but at present they are providing households with little benefit.David Glew, Head of Energy Efficiency and Policy, Leeds Beckett UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1949312022-11-21T15:48:27Z2022-11-21T15:48:27ZEnergy bills: why household finances and business certainty will still suffer under Jeremy Hunt’s extended plan<figure><img src="https://images.theconversation.com/files/496142/original/file-20221118-11-m3w61y.jpg?ixlib=rb-1.1.0&rect=0%2C39%2C8688%2C5722&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Preparing for a cold winter.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-hands-wool-gloves-warm-near-2106326786">Jelena Stanojkovic / Shutterstock</a></span></figcaption></figure><p>Among the grim news in Jeremy Hunt’s recent autumn statement was an attempt to square the circle on energy bills. Funding for the <a href="https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022">Energy Price Guarantee</a> that aims to limit household energy prices will continue throughout the 2023-24 financial year. But the level of support available after this winter will be significantly lower. </p>
<p>An <a href="https://news.sky.com/video/energy-price-cap-to-rise-again-in-2023-from-2-500-to-3-000-12749552">increase</a> in the energy price cap means that the annual average household bill will rise from £2,500 to £3,000 per year. This is still around <a href="https://www.cornwall-insight.com/predicted-fall-in-the-april-2023-price-cap-but-prices-remain-significantly-above-the-epg/">£700 a year less</a> than households would pay from next April under the older price cap arrangements, according to research firm Cornwall Insight.</p>
<p>When the additional government payment for this winter of <a href="https://inews.co.uk/inews-lifestyle/money/not-received-energy-payment-arrive-1975565">£400 per household</a> is taken into account, this means that average energy bills will rise by £900 in 2023-24. This represents a <a href="https://www.ofgem.gov.uk/energy-data-and-research/data-portal">tripling</a> of average bills compared to just two years ago. The autumn statement has promised extra support for those receiving benefits and pensions, but this energy bill rise will be a further financial blow to many households – especially those with low or average incomes, and particularly those just above the threshold for receiving benefits.</p>
<p>The costs to government (and the taxpayer) of the cap for 2023-24 should fall significantly. The government estimates that it will spend £14 billion less as a result: partly due to the higher cap, and partly due to an expected fall in gas prices. But as the Office for Budget Responsibility <a href="https://obr.uk/the-chairs-presentation-on-our-latest-economic-and-fiscal-forecast-3/">points out</a>, the costs for next year could be much higher than the government expects if gas prices go back up to <a href="https://www.statista.com/statistics/1174560/average-monthly-gas-prices-uk/">August 2022 levels</a>. Such a rebound could mean the government has to further limit the amount of support available and the types of households covered by its energy bill support scheme.</p>
<h2>The outlook for business</h2>
<p>For businesses, the announcement brings even less certainty. The current <a href="https://www.gov.uk/guidance/energy-bill-relief-scheme-help-for-businesses-and-other-non-domestic-customers">Energy Bill Relief Scheme</a> for non-domestic customers ends next March, and will be reviewed before the end of this year. The government was clear in its autumn statement that, even if support is extended, the amount available will be “significantly lower”. While that is understandable given the £18 billion cost of the current scheme over six months, this may put many businesses in a very difficult position next year.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/energy-price-freezes-and-business-support-are-sticking-plasters-heres-how-to-protect-uk-families-and-companies-from-future-crises-189406">Energy price freezes and business support are sticking plasters – here's how to protect UK families and companies from future crises</a>
</strong>
</em>
</p>
<hr>
<p>It has been argued that support for bills is not a sustainable, long-term solution to this energy crisis. <a href="https://www.edie.net/we-need-to-run-not-walk-green-groups-react-to-energy-efficiency-spending-plans-in-the-fiscal-statement/">Many believe</a> a decisive shift away from fossil fuels, as well as energy market reforms and a more ambitious approach to energy efficiency are also required. Now that the government is spending so much money on energy subsidies, it has a direct interest in improving the energy efficiency of the UK’s poorly insulated homes. This would reduce bills and government spending, improve energy security and reduce emissions.</p>
<h2>Boosting energy efficiency</h2>
<p>The autumn statement offers mixed signals on energy efficiency, and lacks the urgency required to properly address this issue. Expected spending in this parliamentary session of £6.6 billion will still be much less than the £9.2 billion pledged in the <a href="https://www.energyvoice.com/other-news/212718/tories-pledge-9-2bn-for-energy-efficiency-in-homes-hospitals-and-schools/">2019 Conservative manifesto</a>. An extra £6 billion has been promised in Hunt’s statement, but this funding will only be available after the next election. Although it is welcome, this extra money will not bring down bills during the next three winters. </p>
<p>In the short term, a new task force will be formed to “deliver energy efficiency across the economy”, and to meet a new target of a 15% reduction in energy demand by 2030. The target will only apply to energy use in buildings and industry, and therefore excludes the energy we use for cars, buses and other forms of transport.</p>
<p>It is useful to put this target into context. Energy demand in the UK <a href="https://www.gov.uk/government/statistics/energy-chapter-1-digest-of-united-kingdom-energy-statistics-dukes">peaked in the early 2000s</a>. During the last decade – a period that includes the impacts of COVID-19 – overall demand fell by 7%, with industry energy use falling slightly more than that for households.</p>
<p>The new target will require more rapid reductions in demand in a shorter period of time. It also means that the new task force and the government will need to overcome a decade of policy failure in this area. Energy efficiency policies were having a <a href="https://www.theccc.org.uk/publication/2022-progress-report-to-parliament/">significant impact on homes until 2012</a>. Since then, high profile policy initiatives like the <a href="https://www.gov.uk/green-deal-energy-saving-measures#:%7E:text=The%20Green%20Deal%20helps%20you,heating">Green Deal</a> have not delivered. </p>
<p>The current <a href="https://www.ofgem.gov.uk/environmental-and-social-schemes/energy-company-obligation-eco">Energy Company Obligation</a>, which funds suppliers to improve energy efficiency in low income, fuel poor and vulnerable households, is welcome. But it needs to be scaled up and complemented by incentives for households that are not in fuel poverty. Without this increase in ambition, many households will remain vulnerable to high prices for years to come.</p><img src="https://counter.theconversation.com/content/194931/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jim Watson receives research funding from UK Research and Innovation and the Foreign, Commonwealth and Development Office (FCDO)</span></em></p>More ambition, particularly in boosting energy efficiency, could help.Jim Watson, Professor of Energy Policy and Director of the Institute of Sustainable Resources, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1939852022-11-14T17:38:25Z2022-11-14T17:38:25ZBritain’s energy price cap left many people confused – especially Conservative voters<figure><img src="https://images.theconversation.com/files/493851/original/file-20221107-3575-os8czm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Andrey_Popov / shutterstock</span></span></figcaption></figure><p>If you’re in the UK, how do you understand the government’s plan to deal with energy prices?</p>
<p>Has it:</p>
<ol>
<li>Capped energy bills for all households at £2,500 for the next two years;</li>
<li>Capped the price of energy so a typical household will pay £2,500 per year for the next two years; </li>
<li>Required energy providers to offer free gas and electricity when the temperature falls below 4 degrees, up to £2,500 per year; or,</li>
<li> Increased the personal income tax allowance for the next two years by £2,500 to help offset energy costs.</li>
</ol>
<p>If you answered 2) you are of course <a href="https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022">correct</a>. Yet when colleagues and I recently presented those four options to 617 people, 32% of them got it wrong. Of those who gave an incorrect answer, more than 90% chose the first option believing there will be a strict price cap of £2,500 this year.</p>
<p>If you got it wrong, perhaps you were misled – from the very top. Trying to distract from the disastrous rollout of the “mini-budget”, the then prime minister Liz Truss repeatedly tried to focus on an element of government fiscal policy likely to be more popular with voters – her plan to address skyrocketing energy costs. </p>
<p>On BBC radio, she claimed her government was “making sure nobody is paying fuel bills of more than £2,500”. Labelling such claims as false, fact-checking charity <a href="https://fullfact.org/economy/liz-truss-energy-price-cap-2500/">Full Fact</a> asked Truss to publicly correct her statements, fearful that people would believe their bills were capped and that they could use as much energy as they liked.</p>
<p>Voters generally do not pay much attention to the minutiae of policy announcements but the costs of heating one’s home, coupled with Truss’ continued reference to the policy, may have led to widespread misperceptions.</p>
<h2>People who get the policy wrong think they will pay less</h2>
<p>That’s why we carried out our survey, fielded between October 18 and 20. It forms part of a <a href="https://www.brunel.ac.uk/research/Projects/Project?entryid=71eb5129-bb92-4715-bfc5-766431c045f0">wider project</a>, funded by the Economic and Social Research Council, in which colleagues and I hope to find out how people’s trust in the government and its policies affects their intention to support and comply with policies during the post COVID-19 recovery phase. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="coins on gas stove" src="https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/493853/original/file-20221107-23-h25dkm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Energy prices increased in late 2021 as the world recovered from the pandemic, then increased sharply when Russia invaded Ukraine in early 2022.</span>
<span class="attribution"><span class="source">Sergey Neanderthalec / shutterstock</span></span>
</figcaption>
</figure>
<p>Having established a good chunk of the public thinks there is a hard £2,500 cap, we wanted to see if there was any evidence those individuals have different expectations in terms of their energy bills. </p>
<p>To determine this, we asked people two additional questions: i) their estimated current monthly energy bill; and ii) what they thought their fuel bill would be at the same time next year. Of those who were able to give us estimates, the median respondent believed they would go from paying slightly more than £100 per month to over £150 per month – an increase of £56.</p>
<p>But this differs quite a bit depending on how people understand the energy price cap. The median respondent who correctly understands the policy indicated their bills will increase by £65 per month. Those who got the policy wrong believe that their monthly bills will increase by just £44. Across a whole year, that’s a difference of £252 (and bear in mind that at the time people were asked – October 2022 – bills had already <a href="https://theconversation.com/energy-bills-why-yours-is-now-so-expensive-and-where-all-the-money-goes-176443">increased hugely</a> over the previous year). </p>
<p>To see how partisan groups might differ in their responses, we examined responses by how participants said they voted in the 2019 general election. More Conservative voters got the policy wrong (34%) than Labour (26%) or Liberal Democrat (24%) voters. </p>
<p>Our data does skew towards slightly older people (the average age of participant being 51 years old) but neither age, trust in the traditional media or trust in the social media is strongly related to getting the answers right. Our sample is not big enough to state the party-political findings with full confidence, but they do highlight one potential concern for a Conservative government. </p>
<p>Particularly now that the new chancellor has limited the policy to <a href="https://www.independent.co.uk/news/uk/politics/jeremy-hunt-government-support-energy-bills-b2204261.html">six months</a>, the party’s core supporters might be most surprised when they discover their energy bills do not have a hard cap. When politicians make misleading statements (whether intentionally or not), those words can have financial and political impacts.</p><img src="https://counter.theconversation.com/content/193985/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dorothy Yen receives funding from Economics and Social Research Council (Grant Ref: ES/W011913).
Jason Reifler (from University of Exeter) and Han Dorussen (from Essex University) also contributed to this work.</span></em></p><p class="fine-print"><em><span>Steve Pickering receives funding from the ESRC.</span></em></p><p class="fine-print"><em><span>Thomas Scotto receives funding from the ESRC.</span></em></p>A third of people we surveyed incorrectly thought there was a £2,500 cap on energy bills.Dorothy Yen, Professor in Marketing, Brunel University LondonSteve Pickering, Docent, Political Science, University of AmsterdamThomas Scotto, Professor of Politics, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1934592022-11-01T19:01:00Z2022-11-01T19:01:00ZWe all need energy to survive. Here are 3 ways to ensure Australia’s crazy power prices leave no-one behind<p>Australia is in the midst of a spiralling energy crisis. Prices have risen rapidly and are <a href="https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/resp">forecast</a> to increase by another 56% in the next two years. </p>
<p>The federal government is considering short-term solutions such as imposing a <a href="https://www.theguardian.com/australia-news/2022/oct/28/call-for-energy-ministers-to-agree-to-gas-price-cap-at-30-of-current-market-offers">price cap</a> on gas. But amid stiff global headwinds including the war on Ukraine, more must be done to protect vulnerable energy consumers – now and in the long term.</p>
<p>We all need energy to survive: to raise our families, do our jobs and stay healthy. So how do we make sure Australia’s energy market leaves no-one behind? </p>
<p>A key step is a policy overhaul so all households can access rooftop solar and other technology to slash energy bills. </p>
<figure class="align-center ">
<img alt="elderly woman folds hands" src="https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/492690/original/file-20221101-13-26n4v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">All households need access to schemes that can slash their energy bills.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Why the system must change</h2>
<p>Earlier this month, the Australian Energy Regulator (AER) released a new <a href="https://www.aer.gov.au/news-release/aer-starts-a-journey-towards-energy-equity">consumer vulnerability strategy</a>. It called for “game-changer” reforms to ensure energy markets are inclusive and equitable. </p>
<p>Launching the strategy, AER chair Clare Savage said about 2.7% of residential energy consumers have debt longer than 90 days. She said a quarter of those customers had a debt greater than $2,500, and added:</p>
<blockquote>
<p>When your budget might allow a spare $5 or $10 a week, coming back from $2,500 worth of energy debt would be almost impossible - it would certainly feel insurmountable.</p>
</blockquote>
<p>The AER strategy contains 15 actions. They include measures to tackle market complexity, remove barriers to participation, increase protections and improve energy affordability for all.</p>
<p>One suggested action involves extending financial support to vulnerable energy consumers via rebates. But as I outline below, such policy can be difficult to design – as Australia’s experience with rooftop solar shows.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/O23L2m0sugw?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
</figure>
<h2>Government rebates are key</h2>
<p>About 30% of <a href="https://www.aemo.com.au/-/media/files/major-publications/isp/2022/draft-2022-integrated-system-plan.pdf?la=en">detached homes</a> in Australia have rooftop solar systems installed. This could reach <a href="https://www.aemo.com.au/-/media/files/major-publications/isp/2022/draft-2022-integrated-system-plan.pdf?la=en">65% by 2050</a>.</p>
<p>In recent years, Australian governments have offered rebates to households that install rooftop solar. <a href="https://onlinelibrary.wiley.com/doi/10.1111/1467-8489.12487">Studies</a> have found households with the technology installed are far less likely to struggle to pay their energy bills. </p>
<p>But as <a href="https://www.sciencedirect.com/science/article/pii/S0140988322002833">my research</a> shows, low-wealth households are less likely than average to have rooftop solar installed. And homeowners are almost <a href="https://vcoss.org.au/housing-and-homelessness/2022/03/victorian-renters-deserve-solar-equality/">five times</a> more likely than renters to have rooftop solar. </p>
<p>Policies to rectify this have not always succeeded. For example, a Victorian <a href="https://www.solar.vic.gov.au/solar-rebates-rental-properties">scheme</a> offering a $1,400 rebate to landlords who install solar panels on a rental property has had <a href="https://vcoss.org.au/housing-and-homelessness/2022/03/victorian-renters-deserve-solar-equality/">slow uptake</a>. </p>
<p>Governments must ensure the continued surge in rooftop solar is equitable. The same goes for home batteries which support rooftop solar – a technology also set to <a href="https://aemo.com.au/energy-systems/major-publications/integrated-system-plan-isp/2022-integrated-system-plan-isp">expand</a> in coming decades.</p>
<p>New approaches are needed. Here are three options for policy reform.</p>
<figure class="align-center ">
<img alt="homes with solar panels on the roof" src="https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=290&fit=crop&dpr=1 600w, https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=290&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=290&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=364&fit=crop&dpr=1 754w, https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=364&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/492692/original/file-20221101-11-e0jr9r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=364&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The pattern of Australia’s rooftop solar uptake offers lessons for policymakers.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
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<h2>1. Count assets, not income</h2>
<p>Government energy rebates and other financial support are often means-tested. Eligibility tends to be based on income. </p>
<p>But <a href="https://onlinelibrary.wiley.com/doi/10.1111/1467-8489.12319">research</a> shows a household’s assets are much more important than income in determining which have solar panels. These assets might include shares, savings or physical goods that can be used to help cover the upfront cost of installing the technology.</p>
<p>Governments should target energy rebates to households where the value of the home or other financial assets, such as savings in bank accounts, is low. </p>
<h2>2. Tailor financial assistance</h2>
<p><a href="https://www.energy.gov.au/rebates">Current</a> energy rebate schemes often provide the same amount of money to all eligible households, regardless of household assets. This generic policy design is inequitable because many poorer households can’t afford even the reduced cost, so end up getting nothing. </p>
<p>Government energy rebates should be tailored so households receive different amounts, depending on the value of their assets.</p>
<p>This tailored approach is already taken by the broader welfare system, where a recipient’s <a href="https://www.servicesaustralia.gov.au/assets-test-for-pensions?context=22526">assets</a> are part of the criteria used to determine what payments they receive.</p>
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<strong>
Read more:
<a href="https://theconversation.com/you-might-think-solar-panels-have-been-perfected-but-we-can-still-make-them-even-better-and-cheaper-191755">You might think solar panels have been perfected – but we can still make them even better and cheaper</a>
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<img alt="large new homes with electricity tower" src="https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/492695/original/file-20221101-20-1k2q3g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Means testing for energy rebates should be asset-based.</span>
<span class="attribution"><span class="source">Dan Himbrechts/AAP</span></span>
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</figure>
<h2>3. Combine and conquer</h2>
<p>Let’s say a government offers two types of rebates: one for electric vehicles and one for rooftop solar. </p>
<p>Usually, households must financially contribute as well, perhaps through a co-payment or by taking on a loan. However, a poorer household may not be in a position to make even that subsidised contribution.</p>
<p>Or perhaps a household lives in a rental property, and so can’t take advantage of a rooftop solar subsidy.</p>
<p>But what if two subsidies could be combined to form one larger subsidy? That might enable a household to adopt at least one of the technologies. </p>
<p>Governments could allow incentives for other technologies to also be pooled, such as those for household appliances or home batteries.</p>
<h2>Thinking big</h2>
<p>The problems of energy inequity extend beyond eye-watering gas and electricity bills. Energy poverty can <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/1467-8489.12487">increase</a> physical and mental health risks and contribute to social isolation, among other harms.</p>
<p>As climate change worsens, extreme weather will only exacerbate the energy equity crisis.</p>
<p>Financial disaster brought on by illness or other challenges can strike us at any time. Many people now struggling to pay their power bills may never have thought they’d experience such hardship.</p>
<p>Improving energy equity is challenging. But it’s time to tackle it head on – and think big.</p>
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<strong>
Read more:
<a href="https://theconversation.com/not-keeping-up-with-the-joneses-the-one-factor-that-makes-us-less-likely-to-emulate-our-neighbours-on-climate-action-176372">Not keeping up with the Joneses: the one factor that makes us less likely to emulate our neighbours on climate action</a>
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<img src="https://counter.theconversation.com/content/193459/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rohan Best does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>People struggling to pay their power bills may never have anticipated experiencing such hardship. It’s time to tackle energy equity head-on.Rohan Best, Senior Lecturer, Department of Economics, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1917942022-10-10T13:26:16Z2022-10-10T13:26:16ZFour ways to reduce your household energy use – proven by research<figure><img src="https://images.theconversation.com/files/488266/original/file-20221005-6883-3peami.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Many households are already feeling the effects of rising energy prices.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/young-couple-jacket-covered-blanket-sitting-1247928553">Budimir Jevtic/Shutterstock</a></span></figcaption></figure><p>A particularly cold September has given us a glimpse of the winter to come. The cold will bite hardest for the <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-8730/">13%</a> of England’s households that are already in fuel poverty. As the energy crisis intensifies, this is expected to rise further.</p>
<p>European leaders have therefore rushed to implement measures to protect households. The UK’s <a href="https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022">Energy Price Guarantee</a> caps the unit price of electricity and gas at 34p and 10p respectively. While this will ease some concerns over rising energy bills, many households will still be priced out of warming their home in the coming months.</p>
<p>So here are four ways research indicates households can reduce their energy use in time for the winter – and save money in the process.</p>
<h2>1. Air dry laundry</h2>
<p>Washing and drying clothing is responsible for around <a href="https://www.gov.uk/government/publications/household-electricity-survey--2">12%</a> of household electricity use in the UK.</p>
<p><a href="https://www.norfolknaturalliving.com/blogs/journal/is-hand-washing-your-clothes-better-than-using-the-washing-machine#more-sustainable">Hand washing</a> is frequently suggested as an energy-saving alternative to machine washing. </p>
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<a href="https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person crouched over a soapy bucket of water hand washing their clothing." src="https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=464&fit=crop&dpr=1 600w, https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=464&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=464&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=583&fit=crop&dpr=1 754w, https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=583&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/488055/original/file-20221004-14-6s0krm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=583&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Hand washing laundry is often touted as an energy saving alternative to machine washing.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hand-women-washing-clothes-thailand-style-276054953">aromaso/Shutterstock</a></span>
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<p>Yet modern washing machines are highly efficient, typically using <a href="https://doi.org/10.3390/su12187537">0.5 kilowatt hours</a> for a 9kg wash. This is considerably less than the <a href="https://www.mdpi.com/2071-1050/12/18/7537">0.82 kilowatt hours</a> used on average by hand washing. Even inefficient washing machines tend to use less energy than hand washing as much less hot water is required.</p>
<p>By instead restricting use of the tumble dryer, greater reductions in energy use can be achieved. Tumble dryers use a <a href="https://www.gov.uk/government/publications/household-electricity-survey--2">lot of energy</a>, with a single cycle using up to 4.5 kilowatt hours. This will cost £1.50 per cycle at the price cap.</p>
<p>By air drying laundry instead, I calculated that the average household could save over £130 a year.</p>
<h2>2. Use less hot water</h2>
<p>Facing critical gas shortages, the German city of Hanover <a href="https://www.theguardian.com/world/2022/jul/28/german-cities-impose-cold-showers-and-turn-off-fountains-in-face-of-russian-gas-crisis">turned off the hot water</a> in the bathrooms of all public buildings earlier this year. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1552841219809705986"}"></div></p>
<p>While energy-saving measures this severe are unlikely, hot water production in the UK is a major consumer of energy, accounting for roughly <a href="https://www.sciencedirect.com/science/article/pii/S0378778821004035?casa_token=xTAh7oY7yM8AAAAA:E-iJfrf8Z0YDsMcJRElfs2XHNswtyHpW8ims2UDwPFYv5-usqyz5ARij2m1nalnuKLB94qd1jw">one quarter</a> of household energy use. There are several ways households can reduce their hot water use.</p>
<p>One way is reducing the time spent in the shower. A high-pressure shower lasting nine minutes uses around <a href="https://www.waterwise.org.uk/wp-content/uploads/2018/02/United-Utilities_Water-and-Energy-Efficient-Showers_Project-Report.pdf">4.3 kilowatt hours</a> of gas. At the price cap, this will cost households 44p per shower. By reducing the time spent showering to six minutes, households can save 15p on heating water for each shower.</p>
<p>If you have a hot water tank, making sure it is well insulated can also deliver cost savings. This will keep water warmer for longer and reduce heating costs. </p>
<p>Another approach is to install a low-flow shower head. This restricts the flow of water while maintaining the feel of a high-pressure shower. At lower flow rates, a shower will consume less hot water. For households that average two nine-minute showers a day, this could save over £100 per year. </p>
<p>However, a low-flow shower head will only work well in areas where the water pressure is already sufficiently high. Reducing the flow of an already low-pressure shower would transform the shower into a dribble. </p>
<h2>3. Make better use of heating</h2>
<p>As the energy crisis intensifies, it is important to make sure heating is not wasted unnecessarily. <a href="https://www.sciencedirect.com/science/article/abs/pii/S0306261917315829?casa_token=lm5ZgEAZhMUAAAAA:iqGWb6BegjNur8LBAkMpQpQJbLia8FWyhVA_R0evSz82rDLFdv1c_JEQjftGRyXSn6HG13dj1w#b0015">Research</a> indicates that energy use could be slashed by up to 30% by reducing heating when occupants are asleep or away. </p>
<p>This can be done by manually dialling down the thermostat or by turning the heating off altogether. For those who habitually forget to lower the heating, a smart thermostat could prove a useful investment. These can be controlled remotely via your mobile, or automatically through presence sensors and allow heating to be lowered when the home is unoccupied.</p>
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<a href="https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person's hands adjusting a thermostatic radiator valve against a blue wall." src="https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/488059/original/file-20221004-12-62f4a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Homes with heating controls use much less energy than homes without.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/girl-adjusts-radiator-valve-heating-manual-1901588584">Robert Bodnar T/Shutterstock</a></span>
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<p>Energy is also wasted by heating unused rooms. Thermostatic radiator valves are one way to control the temperature across different rooms. They regulate the flow of hot water through radiators and can be programmed to <a href="https://doi.org/10.1016/j.enbuild.2018.05.023">modulate the temperature for each room</a>. </p>
<p>Thermostatic radiator valves can deliver substantial energy savings. One study found that they result in <a href="https://www.alexandria.unisg.ch/249922/">10%–18%</a> less energy use compared to homes with no heating controls. However, it is important that the doors between rooms remain closed to prevent energy being wasted.</p>
<h2>4. Maximise insulation</h2>
<p>Although we can make better use of heating, Britain’s homes are hugely energy inefficient. Its housing stock is one of the <a href="https://www.theccc.org.uk/wp-content/uploads/2017/01/Annex-2-Heat-in-UK-Buildings-Today-Committee-on-Climate-Change-October-2016.pdf">least insulated</a> in Europe. </p>
<p>Maximising your insulation is one way to reduce your energy use. Secondary glazing in the form of window shutters can <a href="https://issuu.com/hspubs/docs/technical-paper-1---thermal-performance-of-traditi">halve</a> the amount of heat lost through a single glazed window. I calculated that this could save the average UK home over £50 per year in heating costs.</p>
<p>But window shutters do not always represent an immediate energy-saving strategy. Shutter installation can be costly and if installed on a building’s exterior may require planning permission. </p>
<p>Closing blinds or curtains at night and during cold spells instead represents a cheaper way of retaining heat. Research indicates that blinds can reduce the amount of heat lost through windows by <a href="https://doi.org/10.1016/j.enbuild.2004.11.008">up to 38%</a>.</p>
<p>Changes in habits and small investments can substantially reduce energy consumption. If widely implemented, they can ease <a href="https://theconversation.com/turning-down-your-thermostat-really-can-ease-a-gas-supply-crisis-heres-how-178915">the energy crisis</a>. While the Energy Price Guarantee will provide temporary relief to many, investment in energy efficiency measures such as insulation must be prioritised to reduce our energy burden longer term.</p><img src="https://counter.theconversation.com/content/191794/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aurore Julien is a CIBSE Member and received funding from the UKERC for a PhD covering rapid energy savings to mitigate a natural gas crisis (2014).</span></em></p>Europe is facing the prospect of an acute energy crisis – how does research suggest households can reduce their energy use?Aurore Julien, Lecturer in Environment, Energy and Resources, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1902902022-09-12T16:18:30Z2022-09-12T16:18:30ZEnergy crisis: the UK is still heading for widespread fuel poverty – despite the government’s price cap<figure><img src="https://images.theconversation.com/files/483973/original/file-20220912-26-p2nxw3.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5116%2C3372&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Many UK households will be watching their energy costs very closely this winter.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/close-woman-holding-smart-energy-meter-2108464427">Monkey Business Images / Shutterstock</a></span></figcaption></figure><p>Fuel poverty <a href="https://www.jstor.org/stable/pdf/resrep17843.pdf?acceptTC=true&coverpage=false&addFooter=false">kills thousands</a> of people in the UK each winter. It means being unable to afford to heat a home to a safe and comfortable level, typically when <a href="https://cpag.org.uk/news-blogs/news-listings/fuel-poverty-updated-estimates-uk">10% or more</a> of household net income is spent on fuel. It damages our health, wellbeing and educational attainment and makes it hard for people to participate in society and the economy. </p>
<p>For decades, around 10% of UK households, or millions of homes, have been affected by fuel poverty. This year, the cost of living crisis, including a spike in gas prices as a result of <a href="https://www.reuters.com/business/energy/why-russia-drives-european-british-gas-prices-2022-09-02/">Russia’s invasion of Ukraine</a>, has prompted a surge in the number of households struggling to afford heat and electricity. </p>
<p>In October 2021, an estimated <a href="https://www.nea.org.uk/energy-crisis/fuel-poverty-statistics-explainer/">4 million households</a> in the UK were in fuel poverty. But the <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-9491/#:%7E:text=The%20monthly%20increases%20in%20both,series%20going%20back%20to%201970.">largest increase</a> in gas and electricity prices ever in April 2022 has pushed a further 2.7 million UK households into fuel poverty, bringing the total number to <a href="https://www.nea.org.uk/energy-crisis/">6.7 million</a>. </p>
<p>And this was before the government regulator Ofgem <a href="https://www.ofgem.gov.uk/publications/ofgem-updates-price-cap-level-and-tightens-rules-suppliers">announced</a> in August that average energy bills were likely to hit £3,549 by October 2022. Under this scenario, it was <a href="https://www.nea.org.uk/news/8-2-million-uk-households-could-be-in-fuel-poverty-from-october/">estimated</a> that 8.2 million households, or one in three homes, would be in fuel poverty this winter, plunging an additional <a href="https://www.nea.org.uk/energy-crisis/fuel-poverty-statistics-explainer/#:%7E:text=At%20the%20start%20of%20October,their%20homes%20warm%20and%20safe.">1.5 million households</a> into fuel poverty in the space of just six months. </p>
<p>In a bid to stem this crisis, the government <a href="https://www.gov.uk/government/news/government-announces-energy-price-guarantee-for-families-and-businesses-while-urgently-taking-action-to-reform-broken-energy-market">recently announced</a> a two-year plan to cap the cost of household energy so the average bill is £2,500 a year. Although much lower than Ofgem’s £3,549-a-year projection, £2,500 still represents a <a href="https://www.nea.org.uk/energy-crisis/">doubling of average energy bills</a> in the space of a year and a £500 increase since April 2022.</p>
<p>The cap is therefore unlikely to significantly reduce the number of households falling into fuel poverty this winter. Those with high energy needs can still expect to pay more than the £2,500 average.</p>
<h2>Counting the cost</h2>
<p>We may not see the number of households in fuel poverty hit the previous projection of 8.9 million, but we can logically expect the figure to remain in excess of the 6.7 million already reached in April 2022. While the government’s response will prevent fuel poverty levels from affecting more than <a href="https://www.nea.org.uk/news/8-2-million-uk-households-could-be-in-fuel-poverty-from-october/">one-third of all households</a>, as was projected prior to the announcement, it will still remain at record levels.</p>
<p>Even with average energy bills frozen at £2,500, many people will continue to think twice about turning on the heating this winter. In fact, <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782?via%3Dihub#b29">research</a> by the Fuel Poverty Research Network suggests that households in or at risk of fuel poverty are likely to take their own action to ensure that their energy bills never get anywhere near £2,500 a year.</p>
<p>As a result, we can expect to attempts at <a href="https://www.ofgem.gov.uk/sites/default/files/docs/2020/10/self-disconnection_and_self-rationing_final_impact_assessment.pdf">self-disconnection and self-rationing</a> to continue to grow rapidly. Self-disconnection is where households are left without energy services such as heating and electricity because of a lack of funds. Typically associated with <a href="https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/PPM%20self-disconnection%20short%20report.pdf">prepayment meter customers</a>, self-disconnection can happen when customers forget or are unable to top up their meters. </p>
<p>Self-rationing involves limiting the use of these services for the same reasons, or not buying other important products and services to be able to afford energy costs. Both involve <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782?via%3Dihub#b29">risks</a> to health, wellbeing and quality of life.</p>
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Read more:
<a href="https://theconversation.com/how-energy-saving-advice-can-hurt-the-most-vulnerable-households-190113">How energy-saving advice can hurt the most vulnerable households</a>
</strong>
</em>
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<p>Our energy bills are broadly made up of two parts: the cost of buying and supplying the energy we consume, and <a href="https://fullfact.org/economy/green-levies/">the green levies</a> that raise revenue to fund the shift towards a low-carbon energy system. </p>
<p>These levies also contribute funding to initiatives designed to alleviate fuel poverty, such as the <a href="https://www.gov.uk/the-warm-home-discount-scheme">Warm Homes Discount Scheme</a> that has helped low-income households afford their energy bills in previous years. The government plans to fund its energy crisis plan through borrowing and by temporarily <a href="https://inews.co.uk/news/green-levy-what-levies-how-much-energy-bills-liz-truss-remove-meaning-explained-1840410">removing green levies</a> from household energy bills.</p>
<p>This means UK taxpayers will eventually foot the bill for repayments via taxes, but as the climate crisis deepens and fuel poverty soars, suspending green levies is also reckless. The transition away from fossil fuels needs to <a href="https://www.ipcc.ch/2022/04/04/ipcc-ar6-wgiii-pressrelease/">speed up</a>, rather than being paused. </p>
<p>Talk of moving these levies into <a href="https://news.sky.com/story/green-levies-why-scrapping-them-wouldnt-lower-your-bills-as-much-as-claimed-12619655#:%7E:text=the%20levies%20to-,general%20taxation,-would%20be%20%22fairer">general taxation</a> sounds progressive, and could be if it means that the higher earners pay more towards the transition. But this is unlikely to come about under a government pledging <a href="https://www.reuters.com/world/uk/uk-heads-return-trickle-down-economics-under-low-tax-truss-2022-09-07/">significant tax cuts</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/483982/original/file-20220912-18-5mrzxu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Boat and oil platforms on May 17, 2015 near the town of Cromarty in Scotland.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cromarty-uk-may-17-boat-oil-281716826">ZRyzner/Shutterstock</a></span>
</figcaption>
</figure>
<p>In addition to the price freeze, the government’s plan also includes proposals to “<a href="https://www.gov.uk/government/news/government-announces-energy-price-guarantee-for-families-and-businesses-while-urgently-taking-action-to-reform-broken-energy-market#:%7E:text=accelerate%20domestic%20energy%20supply">accelerate domestic energy supply</a>” by increasing UK fossil fuel production. But it is our dependency on fossil fuels that has left us vulnerable to volatile international energy markets in the first place. </p>
<p>The cost of energy from renewable sources has been consistently lower than that produced from fossil fuels throughout the crisis and does not suffer from the same <a href="https://www.rechargenews.com/energy-transition/two-thirds-of-new-renewables-power-up-at-lower-price-than-cheapest-coal-fired-plants-irena/2-1-1259635">price hikes</a> as oil and gas traded on wholesale markets. The sooner we can transition our electricity system to locally generated renewable heat and power, the sooner we will escape the <a href="https://www.endfuelpoverty.org.uk/about-fuel-poverty/">unpredictability</a> of fossil fuel markets and the emissions these sources produce. </p>
<p>Coupled with the rapid roll out of energy efficiency programmes prioritising the fuel poor, this is the way to end fuel poverty and ensure we never experience a crisis like this again.</p><img src="https://counter.theconversation.com/content/190290/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aimee Ambrose receives funding from the Arts and Humanities Research Council.</span></em></p>Millions will still experience fuel poverty this winter, even with the government’s latest plan to help.Aimee Ambrose, Professor of Energy Policy and Trustee of the Fuel Poverty Research Network, Sheffield Hallam UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1894062022-08-30T14:52:29Z2022-08-30T14:52:29ZEnergy price freezes and business support are sticking plasters – here’s how to protect UK families and companies from future crises<figure><img src="https://images.theconversation.com/files/481762/original/file-20220830-18781-2at5m9.jpg?ixlib=rb-1.1.0&rect=0%2C23%2C7789%2C5161&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Businesses also face higher costs this winter.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/serious-young-bakery-owners-sitting-small-1761104399">Dragon Images / Shutterstock</a></span></figcaption></figure><p>The UK is bracing itself for a dark winter following the recent announcement of an <a href="https://www.independent.co.uk/news/uk/home-news/martin-lewis-energy-bills-ofgem-b2153183.html">80% increase</a> in the government’s energy price cap from October 1 2022. This will raise the annual bill for an average UK household to £3,549. The cap is expected to go up again by up to 50% in January 2023, and some forecasters even fear bills could almost top <a href="https://inews.co.uk/news/energy-price-cap-average-uk-bill-forecast-7700-april-2023-1819925?ico=most_popular">£8,000 by the end of that year</a>.</p>
<p>The energy price cap does not apply to businesses or public sector organisations such as schools and the NHS, however. There is no limit to what these organisations can be charged for their energy use. As heavy users of energy, exorbitant energy costs threaten their <a href="https://www.independent.co.uk/news/education/education-news/school-energy-costs-pay-increase-shorter-week-b2145109.html">daily operations</a>. </p>
<p>Concerns over energy supply have also raised the very real prospect of <a href="https://www.bloomberg.com/news/articles/2022-08-09/uk-braces-for-blackouts-gas-cuts-in-january-in-emergency-plan">power cuts and blackouts</a> this winter. Manufacturers and small businesses (who <a href="https://www.gov.uk/government/statistics/business-population-estimates-2021/business-population-estimates-for-the-uk-and-regions-2021-statistical-release-html#:%7E:text=Nonetheless%2C%20SMEs%20account%20for%20three,%C2%A32.3%20trillion%20(52%25)">employ around three-fifths</a> of the UK workforce) are especially vulnerable and thousands are already reported to have <a href="https://www.thisismoney.co.uk/money/news/article-11138015/Small-firms-closing-crushed-big-energy-bills.html">closed down</a>. </p>
<p>What’s more, some energy companies are now <a href="https://www.theguardian.com/business/2022/aug/25/big-energy-firms-refuse-to-supply-small-uk-businesses-bankruptcy-fears-contracts">refusing to supply</a> small businesses or asking for large upfront payments, out of fear these companies will be unable to pay their energy bills. If these refusals start to occur on a wider scale, we should expect some supply chain disruption as companies literally struggle to keep the lights on. </p>
<p>The crisis is also acute in the hospitality sector, which is already finding it difficult to <a href="https://www.ft.com/content/027ea2e9-d6c3-4a18-a735-87f92ace95a4">hire workers</a> due to post-Brexit immigration rules. Pub owners have <a href="https://www.theguardian.com/business/2022/aug/30/thousands-of-uk-pubs-face-closure-without-energy-bills-support">issued warnings</a> about potential closures across the sector. Even the traditional British chip shop is <a href="https://www.bbc.co.uk/news/uk-england-somerset-62650572">under threat</a> – several have already closed in recent months due to the high costs of cooking oils and energy. </p>
<p>The prospect of business closures and shutdowns threatens to raise unemployment and exacerbate the <a href="https://www.bbc.co.uk/news/business-62405037">expected recession</a>. But the government has arguably failed to offer any <a href="https://www.theguardian.com/politics/2022/aug/26/liz-truss-tories-disarray-energy-crisis-urged-spell-out-plans-help">adequate solutions</a>. </p>
<p>The <a href="https://www.britishchambers.org.uk/news/2022/08/government-is-running-out-of-time-to-support-businesses-in-urgent-need">British Chambers of Commerce</a> has written to government leaders with a five-point action plan to help business through the crisis. This includes calls for a COVID-style emergency energy grant for small- and medium-sized enterprises (SMEs), as well as stronger regulation of the energy market. </p>
<p>Opposition parties have also put forward proposals to tackle the crisis. Both <a href="https://www.afzalkhan.org.uk/news/2022/08/23/labours-plan-for-energy-costs-for-business/">Labour</a> and the <a href="https://www.theguardian.com/politics/2022/aug/08/ed-davey-calls-for-energy-furlough-scheme-to-avoid-october-price-cap-rise">Liberal Democrats</a> have called for a six-month price freeze on bills. </p>
<p>Labour have also suggested a £1 billion contingency fund to support energy intensive industries like steel, chemicals and ceramics, as well as business rate cuts for SMEs. Alongside a price freeze, the Green Party have called for <a href="https://www.theguardian.com/politics/2022/aug/17/green-party-calls-for-nationalisation-of-big-five-energy-firms">renationalisation</a> of the big five energy firms at a cost of around £2.5 billion. </p>
<p>There is some merit in these proposals although, in truth, they are largely sticking plasters. The UK <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1086781/Energy_Trends_June_2022.pdf">imports around 60% of gas</a> for household and business energy use and so prices are determined on global wholesale markets. </p>
<h2>What’s gone wrong?</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=344&fit=crop&dpr=1 600w, https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=344&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=344&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=432&fit=crop&dpr=1 754w, https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=432&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/481778/original/file-20220830-6748-z8b9ue.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=432&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The price of gas on the wholesale market in GB for delivery in Winter 2022.</span>
<span class="attribution"><a class="source" href="https://www.catalyst-commercial.co.uk/wholesale-gas-prices/">Catalyst Digital Energy</a></span>
</figcaption>
</figure>
<p>This energy crisis sheds light on the UK’s vulnerability and lack of energy security. Privatisation in the 1980s and 1990s led to a highly fragmented energy market and an over-reliance on short-term markets and imported oil and gas. Poor <a href="https://www.mirror.co.uk/news/politics/liz-truss-facing-questions-over-27774728">policy choices</a> over the last decade have left the UK with some of the <a href="https://www.theguardian.com/business/2021/sep/24/how-uk-energy-policies-have-left-britain-exposed-to-winter-gas-price-hikes">lowest energy storage capacity</a> in Europe. </p>
<p>Scrapping the <a href="https://www.theguardian.com/environment/2015/jul/10/uk-scraps-zero-carbon-home-target">zero-carbon homes plan</a>, reducing <a href="https://www.theguardian.com/environment/2019/jun/05/home-solar-panel-installations-fall-by-94-as-subsidies-cut">incentives and subsidies</a> for solar power and onshore wind, and more than a <a href="https://www.thetimes.co.uk/article/a-decade-of-energy-failures-fz35xxplw">decade of inaction</a> on home insulation now means the <a href="https://neweconomics.org/2020/07/a-national-house-retrofitting-programme">UK wastes more household energy</a> than any other country in western Europe. Lower energy efficiency puts greater pressure on the National Grid and raises energy costs for both business and households. </p>
<h2>Long-term solutions</h2>
<p>There are no easy or quick solutions to this energy crisis. External energy shocks mean that countries become poorer and governments must decide how to best to distribute the pain among different groups. </p>
<p>A co-ordinated and strategic package of policy support is now required. In the short term, most economists would agree that it makes sense to target financial support on <a href="https://www.theguardian.com/money/2022/aug/25/economists-urgent-action-energy-bills-winter-policies-price-freezes-taxes-cost-of-living-crisis?pc=dailybrief">poorer households</a>, while also providing some assistance to businesses to safeguard the economy. </p>
<p>But this crisis is also an opportunity to rethink the UK’s long-term energy needs and to build resilience. In particular, the UK needs to get serious about a “<a href="https://neweconomics.org/about/our-missions/green-new-deal">Green New Deal</a>” that weans both consumers and businesses off (imported) fossil fuels, and instead focuses on developing more renewable energy sources and reducing energy waste. </p>
<p>For households, this means more subsidies for better home insulation. This is something <a href="https://www.euronews.com/green/2021/10/25/italy-pays-homeowners-110-of-costs-to-eco-proof-their-homes">Italy has done </a>. It would cut <a href="https://lordslibrary.parliament.uk/home-insulation-and-the-net-zero-target/">carbon emissions</a> and deliver long-term savings. </p>
<p>For business, <a href="https://www.tandfonline.com/doi/full/10.1080/14693062.2021.1957665">industrial policy</a> can also play a critical role, providing funding for research into new industrial processes that reduce waste and improve energy efficiency. Some <a href="https://www.digitalrefining.com/article/1002769/digital-twins-heat-up-the-capabilities-of-energy-storage-plants#.YwoGm9PMKUk">industries</a> are already taking this step by experimenting with new digital technologies such as <a href="https://www.sciencedirect.com/science/article/pii/S136403212200315X">“digital twins”</a>– simulations to help companies to better anticipate and optimise their energy use. </p>
<p>If successful, such energy efficiencies could be applied across a range of sectors, including aerospace, automotive and medical technologies. This is a welcome first step in terms of rethinking our long-term energy needs to ensure UK businesses and consumers avoid future energy crises.</p><img src="https://counter.theconversation.com/content/189406/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Phil Tomlinson currently receives funding from the Engineering and Physical Sciences Research Council (EPSRC) for the Made Smarter Innovation: Centre for People-Led Digitalisation.</span></em></p><p class="fine-print"><em><span>David Bailey receives funding from the Economic and Social Research Council’s UK in a Changing Europe programme.</span></em></p>UK businesses are also suffering from the rising cost of living and doing business.Phil Tomlinson, Professor of Industrial Strategy, Deputy Director Centre for Governance, Regulation and Industrial Strategy (CGR&IS), University of BathDavid Bailey, Professor of Business Economics, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1886252022-08-15T15:58:17Z2022-08-15T15:58:17ZHow to tackle the UK cost of living crisis – four economists have their say<figure><img src="https://images.theconversation.com/files/479145/original/file-20220815-16-h5zjp9.jpg?ixlib=rb-1.1.0&rect=8%2C32%2C5455%2C3604&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Households and businesses across the UK may need to adjust their living habits in line with spiking bills this winter.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mature-woman-using-app-on-phone-1841929600">Monkey Business Images / Shutterstock</a></span></figcaption></figure><p><em>UK inflation, already at <a href="https://www.itv.com/news/2022-07-20/inflation-hits-new-40-year-high-at-94">40-year highs</a>, could <a href="https://www.bankofengland.co.uk/monetary-policy-report/2022/august-2022">pass 13%</a> in October, according to Bank of England forecasts. While <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/july2022">wages</a> have not kept pace with inflation, much of the expected squeeze on households and businesses is down to rising energy costs.</em> </p>
<p><em>A <a href="https://www.bbc.co.uk/news/business-58090533#:%7E:text=why%20is%20it-,rising,-so%20much%3F">spike</a> in wholesale energy prices has fed into retail charges for businesses and households. While the government sets a price cap to try to protect consumers from sharp increases, it rises in line with market rates. This could cause <a href="https://www.cornwall-insight.com/price-cap-forecasts-for-january-rise-to-over-4200-as-wholesale-prices-surge-again-and-ofgem-revises-cap-methodology/">average household bills</a> to increase by more than £650 in January 2023 to the equivalent of £4,266 for the year.</em></p>
<p><em>Political leaders from all major UK parties have put forward proposals to relieve the cost of living crisis this winter. We asked four economists to discuss the suggestions so far and to outline the measures they believe could help relieve some of the pressure on UK households and businesses this year.</em></p>
<h2>Price controls and winter rationing</h2>
<p><em>Alan Shipman, senior lecturer in economics, Open University</em></p>
<p>If left to the market, energy costs will soon rise so fast that price controls may be the new prime minister’s only option this winter. A tighter price cap than regulator Ofgem is <a href="https://inews.co.uk/inews-lifestyle/money/bills/ofgem-energy-price-cap-rise-again-wholesale-prices-surge-1785644?ico=in-line_link%5D%22%22">expected to set</a> would be one way to avoid a winter surge in bills that multiplies fuel poverty.</p>
<p>This would work similarly to the proposal by former prime minister <a href="www.theguardian.com/commentisfree/2022/aug/10/tax-profits-freeze-energy-prices-bring-suppliers-into-public-sector-gordon-brown">Gordon Brown</a>. The government would negotiate new price agreements with energy suppliers after assessing their profit margins and operating costs. </p>
<p>A lower price cap could sink some smaller suppliers, forcing the government to bail them out or take them over. This was already <a href="https://www.bloomberg.com/news/articles/2022-08-07/uk-households-get-280-million-bill-as-energy-suppliers-collapse#xj4y7vzkg">happening</a> before the latest rise in wholesale prices. </p>
<p>Indeed, Ofgem has admitted that requirements for new entrants with <a href="https://www.ofgem.gov.uk/publications/review-ofgems-regulation-energy-supply-market">riskier business models</a> were too lax prior to a market review in 2019. So price controls would also help to separate the viable operators from those that need to close or join <a href="https://www.power-technology.com/news/bulb-energy-auction-sale-bids/">Bulb Energy</a> in effective public ownership.</p>
<p>A tighter price cap would also reduce the amount of gas that distributors and power generators can profitably buy on the wholesale markets. This could lead to shortages unless remaining supply is rationed. EU countries are already preparing to limit industrial <a href="www.theguardian.com/business/2022/jul/26/eu-agrees-plan-to-reduce-gas-use-over-russia-supply-fears">use of gas</a> during winter peaks, anticipating that Russia will <a href="www.theatlantic.com/ideas/archive/2022/07/europe-winter-gas-shortage-russian-supply/670942/">close its pipelines</a> as temperatures drop. </p>
<p>The prospect of shutdowns to save fuel has drawn protest, <a href="www.reuters.com/business/energy/german-gas-rationing-looms-industry-begs-exemptions-2022-08-09/">especially in Germany</a> where energy-intensive steel and chemical makers are bargaining for exemptions. But a recession due to silent factories is likely to be shorter and less socially damaging than the one that will follow from letting the number of households in fuel poverty this winter <a href="www.nea.org.uk/energy-crisis/#:%7E:text=Energy%20experts%20Cornwall%20Insight%20predict,released%20on%2021%20July%202022">rise above 8 million</a> if prices are not controlled.</p>
<h2>Prioritise the energy transition</h2>
<p><em>Adi Imsirovic, Senior Research Fellow, Oxford Institute for Energy Studies and University of Surrey</em></p>
<p>A coherent policy to reduce the predicted explosion in fuel bills this winter must also ensure energy security and still facilitate the transition to cleaner sources of heat and power. None of the key politicians in the UK has such a policy at present.</p>
<p>The current government policy of a <a href="www.moneysavingexpert.com/utilities/what-is-the-energy-price-cap/">price cap</a> and lower VAT payments <a href="https://ifs.org.uk/publications/16137#:%7E:text=slightly%20more%20electricity">encourages consumption</a> and supports rich households that use more energy. Fossil fuel <a href="https://www.brookings.edu/research/reforming-global-fossil-fuel-subsidies-how-the-united-states-can-restart-international-cooperation/">subsidies</a> also discourage energy companies from investing in low-carbon sources. By scrapping fossil fuel subsidies amounting to some <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=COM:2019:1:FIN&from=EN">£10.5 billion</a> per year, targeted cash payments could be given to vulnerable households instead.</p>
<figure class="align-center ">
<img alt="Laptop with image representing switch from fossil fuels to renewables." src="https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=548&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=548&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479147/original/file-20220815-11-vun607.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=548&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Proposals to address the cost of living crisis need to address energy prices but should also consider the energy transition.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/energy-transition-fossil-fuel-green-2146459945">oliverdelahaye / Shutterstock</a></span>
</figcaption>
</figure>
<p>Of the proposals from both Conservative Party leadership contenders, Rishi Sunak’s targeted help for poor households is a better option cost-wise than Liz Truss’s tax cuts. But his proposal of a <a href="https://www.thetimes.co.uk/article/rishi-sunak-we-have-a-tried-and-tested-strategy-for-supporting-most-vulnerable-jfx2n2gsj">further reduction</a> in VAT on energy would subsidise fossil fuels by encouraging consumption and so fails the environmental criteria.</p>
<p>Labour’s proposed <a href="www.theguardian.com/business/2022/aug/10/as-cost-of-living-crisis-hits-politicians-take-a-long-break-to-recharge">extension of windfall taxes</a> is arbitrary – why not tax Google, Meta, law firms or any of the many other companies that announced significant profits recently? Taxing domestic producers such as Centrica or EDF could discourage investment in cleaner fuels such as gas or nuclear here in the UK. </p>
<p>Labour’s most recent proposal of a <a href="https://www.bbc.co.uk/news/uk-politics-62537011">price freeze</a> is also a policy of choice for the <a href="https://www.theguardian.com/politics/2022/aug/08/ed-davey-calls-for-energy-furlough-scheme-to-avoid-october-price-cap-rise">Liberal Democrats</a>. A price freeze would be the worst option for the climate transition. </p>
<p>It would <a href="https://blogs.imf.org/2022/08/03/how-europe-can-protect-the-poor-from-surging-energy-prices/">prolong dependence</a> on fossil fuels by supporting demand which would continue to benefit Russian production, and subsidise wealthy households who use and waste most energy. Eventually, price freezes may also lead to shortages if suppliers are unable to purchase energy in the wholesale markets at or below the frozen price.</p>
<h2>Target the most vulnerable</h2>
<p><em>Morten Ravn, Professor of Economics, University College London</em></p>
<p>Under the current conditions of rising living costs and a <a href="https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2022/august-2022">monetary contraction</a> (when the Bank of England raises interest rates to cool the economy), it is tempting for a government to provide a fiscal stimulus – cutting taxes or raising spending – to soften the blow to the economy. The dilemma is that such a stimulus could worsen the inflation problem by encouraging people and businesses to spend money.</p>
<figure class="align-center ">
<img alt="Calculator that reads " src="https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/479146/original/file-20220815-12-q33f5v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The UK is feeling the effects of rapidly rising inflation.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/inflation-word-on-calculator-business-tax-1947002581">Sauko Andrei / Shutterstock</a></span>
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<p>As such, targeted policies would be most helpful right now. High inflation and the cooling of the economy due to higher interest rates tend to hurt lower income households more. </p>
<p>Such households’ consumption baskets usually have more price sensitive goods (energy, fuel and commodities) and are more likely to be affected by the income squeeze. Policies targeted to this group could help the economy deal with the crisis by protecting the more vulnerable.</p>
<p>In this light, <a href="https://www.telegraph.co.uk/business/2022/07/31/bank-england-risks-radical-overhaul-struggles-contain-inflation/">Bank of England reform</a> as put forward by Liz Truss would be undesirable. The Bank of England’s most urgent job at the moment is to protect its reputation for being able to provide low and stable inflation and this requires protecting its current status.</p>
<p>Both Sunak and Truss have expressed a desire to cut taxes. Truss’s plan to do this soon would likely make the Bank of England’s job more difficult by forcing it to raise rates higher and faster. </p>
<p>Sunak’s desire to make a tax cut further down the line could exacerbate the cooling of the economy in the meantime as it would <a href="https://www.aeaweb.org/articles?id=10.1257/pol.4.2.145">effectively imply</a> a high tax rate today relative to the future encouraging people to put off spending now. But since neither Truss nor Sunak have clarified how their tax reforms would be financed, any further evaluation of the consequences is very hard.</p>
<p>Overall, each of the current plans are missing a commitment to quick implementation to protect the most vulnerable groups of society during the very challenging economic situation we are seeing right now.</p>
<h2>Go for investment and growth</h2>
<p><em>Shampa Roy-Mukherjee, Associate Professor in Economics, University of East London</em></p>
<p>The Tory leadership race has used the country’s dire economic situation and the cost of living crisis as political football. Both candidates have proposed economic policies they feel would <a href="https://www.ft.com/content/1454fe21-5b2e-459c-966c-65fd48d52f8f">appeal</a> to the 160,000 Conservative Party members who are predominantly affluent, white, British, men with an average age of 57 years old.</p>
<p>Much of the debate in the Tory leadership contest has focused on tax policy. The front runner in the contest, Liz Truss, claims her tax cuts will lead to economic growth and avoid the recession <a href="https://www.bankofengland.co.uk/monetary-policy-report/2022/august-2022">recently forecast</a> by the Bank of England. </p>
<p>But if the economy fails to show significant and permanent growth, these tax cuts could lead to a further reduction in spending on public services and pay, as well as higher public borrowing. They could also increase inflation by encouraging people and businesses to spend more, unless offset by higher interest rates set by the Bank of England.</p>
<p>The other contender, Rishi Sunak, has proposed to lower taxes once inflation is under control by cutting 3p off <a href="https://www.bbc.co.uk/news/uk-politics-62373675">income tax</a> by 2029 (in addition to the 1p cut pledged in April). But his plan is light on details and would only benefit people that are working. Plus, if these cuts are not backed by strong economic growth leading to higher tax revenues, the economic consequences could be much the same as the tax cuts proposed by Truss.</p>
<p>Neither candidate has put forward supply side policies that prioritise innovation, growth and inward investment. This could include regulatory reform, labour market flexibility, upskilling the workforce and <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/401199/openness-to-trade-exports-plus-imports-as-a-share-of-gdp-ranked-against-major-competitors.pdf">trade openness</a>. </p>
<p>Such measures would encourage growth and help combat inflation by increasing competitiveness, efficiency, productivity and ultimately real wages – all of which have been <a href="https://www.resolutionfoundation.org/press-releases/brexit-has-damaged-britains-competitiveness-and-will-make-us-poorer-in-the-decade-ahead/">negatively affected</a> by Brexit and the COVID pandemic. Failure to address supply side issues could lead to further reductions in productivity and real wages in the decade ahead.</p><img src="https://counter.theconversation.com/content/188625/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Morten O. Ravn receives funding from the European Research Council (Advanced Grant). The author is also a Regular Visitor at the European Central Bank.</span></em></p><p class="fine-print"><em><span>Adi Imsirovic, Alan Shipman, and Shampa Roy-Mukherjee do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Economists discuss current political proposals designed to tackle the cost of living crisis.Alan Shipman, Senior Lecturer in Economics, The Open UniversityAdi Imsirovic, Senior Research Fellow, Oxford Institute for Energy Studies, University of SurreyMorten O. Ravn, Professor of Economics at University College London, UCLShampa Roy-Mukherjee, Associate Professor in Economics, University of East LondonLicensed as Creative Commons – attribution, no derivatives.