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Green homes could cut energy bills and give UK economy £10bn boost

·3-min read
Green homes could cut energy bills and give UK economy £10bn boost
Greenpeace UK is calling on the government to deliver an extra £12bn for green homes in the spending review next month. Photo: Aaron Chown/PA Images via Getty

Green homes in the UK could deliver "huge economic and social benefits," including cutting energy bills, creating new jobs, NHS savings, and boosting the economy, a new report by Greenpeace UK has found.

Full government funding to cover the cost of replacing gas boilers with low-carbon heating sources such as heat pumps and the installation of green home insulation across the UK's housing stock could create up to 138,600 new jobs and inject £9.8bn ($13.4bn) into the economy by 2030, according to the report.

The government’s Heat and Buildings Strategy and Spending Review, which is expected to outline plans and finances for decarbonising homes and buildings, is set to be published in October.

The government currently plans to install just 600 ,000 heat pumps per year by 2028. This would add £3.9bn to the economy and provide 71,500 new jobs by 2030, according to Greenpeace UK.

Installing just over 1 million heat pumps per year by 2030 and upgrading all buildings to EPC C standards within the next 10 to 15 years, in line with the Climate Change Committee's (CCC) central pathway for delivering net zero, would boost the economy by £4.8bn and create 84,700 new jobs, according to analysis of macroeconomic modelling produced by Cambridge Econometrics on behalf of Greenpeace UK.

Read more: Why the UK is facing an energy crisis and what it means for your gas and electricity bills

An extra £5bn would be funnelled into the economy if the cost of heat pump installations fell to £5,500 in line with industry estimates, the report found.

Greenpeace UK is calling on UK chancellor Rishi Sunak to deliver an extra £12bn for green homes in the spending review next month, along with a "comprehensive package of grants, loans and tax incentives that would see the deployment of heat pumps rapidly ramped up this decade, covering the full cost for low-income households."

Greenpeace also wants the UK government to commit to phasing out new gas boiler installations early in 2030s as well as a fully-funded programme to insulate homes.

Greenpeace said: "It’s clear that the greater the government’s investment, the better the return, both in terms of jobs and economic growth."

Making homes more environmentally friendly is a substantial net job creator, mostly in construction and manufacturing, the report found.

Warmer homes could also save the NHS up to £848m a year, according to a separate report by the Building Research Establishment. Health impacts related to cold homes currently cost the NHS up to £2bn each year.

Read more: Top tips to avoid October price rise and save on energy bills

Other benefits of green homes include lower home energy bills and reduced fuel poverty, Greenpeace found.

“The simple fact is, the government’s current plan to decarbonise homes won’t cut emissions enough to meet its own legally binding climate commitments or tackle the climate crisis," said Doug Parr, Greenpeace UK’s policy director.

"A more ambitious plan, which will sufficiently slash emissions from homes, could create many thousands of new jobs right across the country and pump billions into the economy."

Watch: Top tips for helping the environment on a tight budget