Despite reductions in the use of gas in homes and a decline in energy demand, homes still present a significant headache for those worrying about how we will meet our future carbon targets. The current policy framework leaves a significant gap between what’s like to be achieved and what is needed to meet the fifth carbon budget. New regulatory policies are needed to bridge the gap.
In a wide-ranging call for evidence, BEIS sought views on how markets for energy efficiency should be stimulated and the relative attractiveness of various options that impact upstream and downstream demand for products and services that deliver improvements to homes.
In techUK’s response, we highlighted the significant role that digital technologies can play in connected homes – not only in helping home occupiers to manage their use more efficiently but in supporting a smart, flexible grid system and gain new actionable insights on how to further reduce energy bills. It is therefore no longer appropriate to just consider the fabric of a building along: we need a policy framework that recognises the role of these technologies in enabling a dynamic, productive UK energy system.
techUK’s research shows that consumers are increasingly interested in this nascent technology with 42% of people interested in purchasing smart home energy technologies in the future, prompted in part by the roll out of smart meters. But consumer participation cannot be taken for granted. The market for smart appliances remains low and many still consider them too expensive. More needs to be done to empower and incentivise consumers to manage their demand, adopt new technologies and minimise costs to their benefit and that of the electricity system as a whole.
Among the recommendations from techUK to government:
• Introduce new “smartness” indicator on EPC labels highlighting to occupants comfort controls or ability to participate in demand response.
• Commit to continue to energy label products following our exit of the European Union to ensure consumers can identify the most efficient smart appliances on the market.
• Ensure measures to overcome access to finance barriers – such as low interest loans to homeowners, equity loans or “green” mortgages - allow for upgrades in energy efficient smart appliances as a permitted energy efficiency measure or alternatively that a separate percentage of the loan is permitted to upgrade energy efficient smart models.
• With clear evidence of the social good smart technologies and appliances can bring (in tackling fuel poverty and supporting assisted living, for example) VAT reductions, as permitted under the Council Directive 2006/11/EC on the common system of value added tax, should also be considered.
• Supply side options include incentives linked to certain tariffs, for example on the back of sign-up to time of use tariffs and domestic maximum demand tariffs, could drive demand for energy efficient technologies. Government’s role is to urgently remove barriers to smart tariffs, such as half-hourly settlement, enabling new business models to develop. Government should also establish rules that will ensure those who are unable to participate in this new market are not disadvantaged.
• Address grid flexibility barriers to ensure that the full range of technologies and solutions are at our disposal. This could be achieved, without spending money on upgrade to the grid, through demand response services or by giving network operators a degree of control over the use of large loads. Maximum demand tariffs could help to integrate large new connections.
• Review the current status of third party access to other sets of energy and efficiency data and commit to a review of public interest justifications for greater access. Consider how to integrate the Royal Society and British Academy’s high level principles for data governance into its current review of the smart meter Data Access and Privacy Framework.
You can download the response in full below.