A new scheme to help households cut energy bills and push Britain towards net zero will help just 3pc of those who could benefit and is vastly underfunded, experts have warned.
More than 11 million homeowners will miss out on the Government’s new flagship insulation scheme, which analysts said was £23bn short of the funding needed to actually achieve net zero.
The new “Eco+” scheme, due to be launched next year, has been described as a “drop in the ocean”. The Government began consulting on the new Energy Company Obligation scheme last week.
It will offer grants to install insulation in an estimated 410,000 homes over three years from April 2023, saving each household an estimated £310 a year on energy bills.
However, the funding is minute compared with the number of homes that need upgrading, according to Russell Smith of Parity Projects, an environmental consultancy. He said: “It is a drop in the ocean.”
Around 11.7m households should be eligible for the scheme, in line with criteria that relate to the council tax and Energy Performance Certificate bands, according to analysis by Hamptons estate agents. However, 97pc of these households will be unable to access the cash because of strict guidelines set out by the Government.
Eco+ will use the existing framework of Eco4, a scheme that targets only those deemed to be in fuel poverty. It will be broadened out to households that currently have no support and suppliers must use at least 20pc of the funding to improve homes of low-income households.
The remainder can be used for homes with EPC ratings of D or below in the lower council tax bands (bands A to D in England, A to C in Wales and A to E in Scotland).
Under the Eco4 scheme the typical grant per household was £2,000. If this amount were applied to Eco+, the scheme would need another £22.6bn of funding in order to improve all the properties that require upgrades.
Louise Hutchins of the UK Green Building Council, which has 700 members across the building sector, said: “This scheme is welcome, but it is not big enough. People desperately need it and it is important to scale it up. It is not enough money and a really short time period.
“There is a huge black hole of government policy on how to get to net zero.”
But Nigel Donohue of the Insulation Assurance Authority, a trade body, warned that aside from funding and scope, a bigger problem with the scheme was a lack of skilled engineers to do the work.
He added: “We are doing fewer insulation installations a year than we did a decade ago. We need a talent pipeline and long-term investment in skills.”
The sector needs to expand dramatically in order to meet the Government’s energy efficiency targets, experts said. The workforce is currently 200,000-strong but to get every home to a standard in line with net zero it would need to increase to 500,000, Mr Smith said.
He added: “That is if we started this year. The longer we wait, the harder it will be. The average age of a gas engineer is 56. We already have a problem with people retiring.”
The sector wants assurances that consumer demand would remain high enough to support an influx of workers – largely rooted in government grant schemes.
However, companies have been burned by previous schemes, including the Green Deal and the Green Homes Grant, which encouraged them to invest to scale up their workforces but then fell through.
Jess Ralston of the Energy & Climate Intelligence Unit, a non-profit body, said: “The lack of trust the insulation sector has in government schemes is very stark. It takes real long-term certainty to build trust.”
In his Autumn Statement, the Chancellor, Jeremy Hunt, committed to spending a further £6bn from 2025. The move should in theory give installers the certainty to invest in their workforces, but the sector has expressed wariness of such promises.
“The Conservatives probably won’t be in government then. And there is still no actual plan to improve all homes to have a C EPC rating by 2035,” Ms Ralston said.
Engineers are also in desperate need of notice of the Government’s plans to introduce minimum EPC targets for the private rented sector. Under current proposals, landlords will be obliged to make all newly let properties C-rated by 2025. For existing lets, the proposed deadline is 2028.
However, this would mean millions of homes being upgraded in a short time span and the Government has so far given no clarity on the deadlines. It has been 22 months since the consultation closed.
The largest number of properties that are eligible for Eco+ are in the North West, where in theory 1.5 million homes qualify for the scheme, according to Hamptons.
London, by contrast, has a comparatively low number at 932,000, as it has a larger share of homes in higher council tax bands and a large number of new homes, which typically have much higher EPC ratings.
A BEIS spokesman said: “The existing Energy Company Obligation scheme alone has already delivered energy efficiency improvements to around 2.4 million homes, alongside schemes such as the Home Upgrade Grant – and the billions more we are investing in making buildings more energy efficient.
“The £1 billion ECO+ scheme is additional and represents an acceleration of these efforts, also installing measures in households who have previously not been able to access ECO support.
“We have based the scheme on what suppliers indicated would be deliverable and just this autumn we launched a £10 million Home Decarbonisation Skills Training Competition to further fund training for people working in the sector.”