Dr Jan Rosenow, Ricardo AEA
Nick Eyre, Environmental Change Institute, Oxford University
UK residential energy efficiency policy over the last decade is widely seen to have been relatively successful. Significant improvements have been made to a notoriously old and inefficient housing stock, primarily through the installation of condensing boilers and retrofitting of basic insulation measures in large utility programs. Energy demand has fallen by 20% in absolute terms. Despite the success there has always been concern that the rate of deep refurbishment has remained low. Seeking to address this, the UK Government has made a major change in policy in 2013. Utility programs have been reduced in scale and are now directed entirely at low income households and the treatment of the oldest (pre-1930s) buildings. A voluntary loan program with on-bill repayment at commercial interest rates, known as the Green Deal, has become the centrepiece of policy. Ex ante assessments indicated that this would result in a significant reduction in the scale of energy efficiency activity. This paper presents an analysis of early program results that are even more concerning, with almost no take up of the Green Deal. The paper identifies the reasons for the observed changes; it draws lessons about the relative success of regulatory and voluntary approaches; and it discusses the design details that have resulted in very low take up. The analysis is relevant to any programs seeking to achieve deep refurbishment of inefficient building stocks.
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