Insulating UK homes and installing heat pumps could benefit the economy by £7bn a year

A Guardian article published earlier this week following Greenpeace-funded research has shown that insulating homes in Britain and installing heat pumps could benefit the economy by £7bn a year and create 140,000 new jobs.

Photo by Erik Mclean on Unsplash

The study, Economic Impacts of Decarbonising Heating in Residential Buildings, conducted by Cambridge Econometrics shows that uptake of energy-saving measures would not only help households save heavily on their rising energy costs, freeing up money to boost the economy and create new jobs through the installation and insulation process. These moves would also have additional knock-on positive socio-economic and wellbeing benefits, helping to alleviate fuel poverty and lead to better healthcare and education.

The research also says that the government will need to invest heavily and back the measures in order to realise the economic benefits. The government would need to spend £27.7bn over eight years to subsidise the installation of heat pumps and insulation, but in the first year alone, households would save £11bn on their heating costs.  It’s yet to be seen whether the incoming Chancellor will make this a priority in the short term, despite pressure from campaigners and experts repeatedly reporting that insulation is the cheapest way to cut energy bills,

In our view, there is no doubt that government policy and investment is needed to improve the uptake of green home upgrade and drive down energy bills. Through our work, we have seen the benefits to residents time and again.

So, what support is currently available?

Through the SHDF (Social Housing Decarbonisation Fund), Wave 2 funding applications are open now. Qualifying Local Authorities can apply for schemes like the Green Homes Grant LAD scheme or the HUG (Home Upgrades Grant) to raise the energy efficiency of low-income and low-energy performance homes.  For those not on low incomes, the government will help households pay up to £5,000 towards heating pumps – but a pump’s total cost is twice that. Homes also need to reach a high standard of insulation to qualify for this scheme which costs several thousands of pounds in addition. The alternative is to investigate funding a Retrofit project privately. As energy bills continue to rise (despite the short-term cap) and unless the Government decides to heed the advice of experts, this may become a more attractive proposition for homeowners.