News

Following a damning report into government support into energy efficiency in the home, we ask whether the government and businesses are doing enough to make sure that energy efficiency isn't being forgotten at non-domestic sites. Making reference to recent news reports and the Chancellors latest budget statement we analyse the current state of business energy efficiency performance.

Failing efficiency in the domestic sector

New research from the Association for the Conservation of Energy found that the number of energy efficiency measures installed at homes through government-backed schemes fell by 80 per cent. Similarly, the research found that the number of UK households receiving help from the government to improve energy efficiency fell by 75 per cent since 2012. Cuts to government funding programmes lead to sharp declines in the take-up energy efficiency measures. According to the study, there was a sharp decline in 2013-14 when previous schemes were replaced by the Green Deal and the Energy Companies Obligation (ECO). There was another slowdown in 2015-16 following cuts to ECO. The government also faced criticism following a BBC Panorama programme which aired on Monday night. The show reported on millions of people who still can’t afford to keep their homes warm – 16 years after the government promised to eradicate fuel poverty by 2016.

Parallels in the non-domestic sector

We can draw a number of parallels between the domestic and the non-domestic energy markets, that could lead to similar levels of energy efficiency apathy in the business energy market. In his budget last week, the Chancellor George Osborne put an end to the carbon reduction commitment (CRC) energy efficiency scheme. CRC is an energy reporting scheme designed to improve energy efficiency for large organisations. It will be scrapped following the 2018/19 compliance year. To replace the hole this will leave in government finances, the Chancellor also proposed increasing the Climate Change Levy (CCL) – another environmental tax for non-domestic users – from 2019. Substituting an increased CCL for the CRC may sound like a simpler and more effective way of boosting efficiency. But the policy change could have some unintended consequences. Business Green, for example, report that some green businesses like renewable generators will be required to pay the increased CCL, “making the price hike an effective tax increase for renewables.” renewable generators are now liable to pay the CCL, making the price hike an effective tax increase for renewables.