Hilary Benn reveals strategy to tackle existing domestic stock at Think and hints at feed-in tariffs to boost renewables sector

The Environment Minister, Hilary Benn, yesterday pointed towards the introduction of reduced-cost loans aimed at the improved energy performance of the lowest performing homes.

Hilary Benn
Hilary Benn

And he said that the Government was mulling the feed-in tariffs that have produced a step change in the introduction of solar and wind energy in Germany and other countries.

Towards A

Speaking to the Think 08 event, Benn, said, “We should be moving towards packages to help people improve their (energy performance) ratings, particularly from E to D towards A.

“With people being concerned about the rising cost of energy, there’s an opportunity. If you can save climate and save energy at the same time, why would you not do it?”

Benn hinted at the involvement, if not the financial support, of energy companies by saying that repayment for energy improvement features such as loft insulation, more efficient boilers or cavity wall insulation could be made on energy bills.

“You could say, ‘this is what you will be paying for energy if you don’t make improvements and this is what you will be paying if you will and this is the cost of paying it back,’” he said.

Elsewhere Benn underlined the Government’s determination to have energy companies foot the bill for energy improvements in ‘vulnerable’ households. He said it was looking for £1 billion from the energy industry under the Carbon Emissions Reduction Target (CERT) to insulate 2.5 million lofts and perform three million cavity wall insulations. He said this was equivalent to taking a million cars off the road.

Paul Ekins, Professor of Energy and Environment Policy at Kings College, London, said homeowners had so far proved oblivious to the cost savings of investing in energy efficiency.

"The policy of low or no interest loans could be a mechanism to encourage people to take an economically rational decision."

He added that the Government was keen on having energy companies pay for public objectives such as cutting carbon but pointed out that industry would be forced to borrow at market rate, passing on costs to the consumer. Meanwhile, a revolving Treasury fund would, if handled correctly, have no cost to the taxpayer beyond inflation and interest and could have knock-on benefits such as increased employment.

The cost of any loans should be added to the house value to prevent consumers walking away from their debt, he said.

Feed me

Discussing the feed-in tariff issue, where the guaranteed price for renewable energy is set by government, in order to decrease investment risk, Benn said. “Renewables Obligations Certificates [ROCs] do not work very well for the domestic sector or for small schemes.

“We are looking at feed-in tariffs very closely. We think there’s a lot of potential.” ROCs, which are tradable, require energy providers to source a certain amount of power from renewable sources or buy certificates to compensate. The amount that could be provided by smaller schemes would not significantly help energy firms to meet their commitments.

The idea of a feed-in tariff was backed by the Think Tank event which took place last week where proposals for incentives to green the built environment were voted on by an audience of sustainability professionals. The event was jointly run by Think and the UK Green Building Council