Five low cost, high impact energy policies the next government should implement
A country still feeling the effects of an energy crisis whilst the climate crisis continues to loom large is going to the polls in a matter of weeks.
We have heard a lot from the major political parties about how to cut carbon and reduce energy bills. Many figures have been bandied around without a great deal of evidence or basis in fact. In the aftermath of a brutal energy crisis and as we drive further towards net zero whilst public finances have been significantly drained in recent years, prudence is vital. Appointing a public body such as the Office of Budget of Responsibility to provide independent analysis of any incoming government’s energy plans could achieve a level of accountability.
Much of the focus has been on how to plan, cost and build big things like grid infrastructure and large offshore wind farms. Those things are helpful, but there is so much more than can be done on the small scale too — the clean energy revolution needs to be ground up as well as top down.
So we have had a think about the five key things the next government could do which are relatively simple and low cost to implement and would have a big impact in terms of helping ordinary people contribute to cutting the country’s carbon emissions.
These are the five manifesto commitments we want to see.
Make green tariffs green again
When Good Energy launched the first fully certified 100% renewable domestic energy tariff in 2005, it was to provide people with a way to help grow a renewable sector which only provided a small fraction of the country’s power at the time.
Today more than 40% of our electricity comes from renewables, but the certification system system has not changed. More than 50% of electricity tariffs promise ‘100% renewable’ electricity, thanks to the trading of REGO certificates. But according to our research, nearly half of UK consumers don’t even know if they’re on a renewable tariff. Of those that do, just 7% have actively chosen to be. While 73% agree that we need more transparent regulation.
REGO prices have increased to such a degree that they are now of meaningful value. But it is not clear how much of this value is received by generators as opposed to the brokers and intermediaries involved in their trade. They are also now adding a meaningful amount to the bills of customers who don’t know, or care, whether their tariff is renewable.
Re-establishing the link between power and certificate, so the two can no longer be traded separately, would allow the customers who do want to support renewables, and may be prepared to pay a bit more to do so. Unleashing a wave of consumer driven investment in renewable power whilst unburdening those who cannot afford to do so.
Smarten up the electricity grid
Smart meters are a crucial enabler for a low-cost, low-carbon energy system. Despite their many benefits, including lower off peak energy prices and ultimately lower bills, the roll out has been plagued with problems. The government can make changes to improve the rollout experience from 2026, when the current framework ends.
Rather than applying incrementally greater pressure on suppliers to force their customers to adopt smart, there are more practical and effective solutions. We would suggest looking to landlords who look after their tenants energy bills and local authorities with social housing to install smart meters in their properties would be a win for all involved.
Move green and social levies
One party has in fact committed to curbing green levies on energy bills. You might be surprised to hear from a green energy company that we are supportive of this — but it must be done in the right way.
A number of levies are applied to the bills of all domestic electricity customers. They tend to be labelled ‘green’ but in fact cover a number of environmental and social support schemes including the Feed-in-Tariff, Energy Company Obligation (energy efficiency) and the Warm Home Discount.
Shifting these levies which are currently applied to electricity bills into general taxation would be a fairer way to pay for the essential green infrastructure we need to decarbonise our energy system whilst maintaining support for vulnerable customers.
It would also have additional benefit of making heat pump running costs much more competitive versus gas. The current imbalance between gas and electricity prices, driven in large part by green and social levies, creates an incentive to emit carbon. As heat pumps are much more efficient than gas boilers, bringing electricity and gas prices closer will make running a heat pump much more cost efficient.
Meanwhile it would bring energy bills down for everyone, whether they are able or ready to switch to heat pump or not.
Bring back the deadlines on fossil fuel boilers
In September the Prime Minister Rishi Sunak announced a suite of measures which were broad roll backs on climate and energy policy. This included pushing out the deadline for installation of new oil and liquid petroleum gas boilers from 2026 way out to 2035, whilst the 2025 deadline for gas boilers in new homes was also pushed back.
Our research has shown that people in oil heated homes are more open than any others to switching to heat pump, and are much more likely than average to have had problems with their heating. The argument that forcing a heat pump on off gas grid home is a burden, over a volatilely priced, unaesthetic, smelly heating source like oil, is absurd.
Unlike the delay to the ban on sales of new petrol and diesel cars which Sunak announced in the same speech, Labour have not publicly committed to reinstating these deadlines.
We want to see them both brought forward again. Banning gas boilers from new builds is entirely possible — Scotland has already done it. This could be achieved across the UK as part of the Future Homes Standard from 2025. And ban new oil boilers in all properties, at least in line with the Climate Change Committee’s pathway of 2028 if not before.
Supercharge small scale solar
Recent Good Energy analysis of our domestic solar customers’ data has shown for the first time that the average home with solar on its roof actually shares the majority of the power it generates.
Clearly more rooftop solar is a good thing anyway in that it reduces the property’s reliance on power from the grid, but our findings show that its contribution to reducing the grid’s carbon intensity has been historically underestimated.
To put this into context of Labour’s commitments — if a 4kW solar array went on the roof of all of the 1.5m new homes they have pledged to build, their excess power would be enough for an additional 1.15m homes. The new capacity would generate around 5% of the UK’s current domestic electricity consumption, which is very significant given the party is aiming to decarbonize the entire electricity grid by 2030.
Like banning gas boilers from new homes, this would be relatively straightforward to implement through a new set of requirements which are already slated be introduced from 2025 — the Future Homes Standard.
