Catch 22: Fuel poverty vs energy efficiency

Whilst new builds are being built to be as energy-efficient as possible, existing homes that need to be retrofitted are pushing low-income families deeper into fuel poverty.

There is a societal shift towards a sustainable future, we are facing a transition away from traditionally used energy sources such as gas to a cleaner electric solution. This will inevitably lead to the inflation of energy prices for households across the country and beyond.

When approaching the performance of the property, the measurement of Energy Use intensity (EUI) is used to help to build the picture of the property’s energy efficiency. It is calculated by dividing the total energy consumed by the building in one year by the total gross floor area of the building.

London Energy Transformation Initiative (LETI) has recently announced an impressive EUI of 35kWh/m2/yr, of which the heating element only contributes a mere 15kWh/m2/yr.

Typically a new build faces a two-way pull; capital costs vs EUI. A pull that will have a minor impact relative to the cost of building new homes. Due to the higher household incomes paired with the efficiency of the new build, fuel poverty does not become a factor.

However, what about those living in poor-performing properties with low incomes facing fuel poverty?

Facing the phasing out of gas, and the transition into a period of electric pricing inflation we could see small low-quality homes cost a disproportionate amount to heat and power.

Unlike new builds, existing homes undergo three key pulls. These are split into EUI, the capital cost to retrofit a home and fuel poverty. For a property to reach or rather meet the EUI levels of a new build requires a large upfront capital cost. The amount of money that those facing fuel poverty simply do not have to hand.

However, using a design that has a higher EUI in order to be affordable and practical, the required energy to heat the property increases equalling an increase in fuel poverty.

Because no one is willing to foot the bill for retrofit, many homes will become disproportionately more expensive to run, exacerbating fuel poverty.