The energy and cost of living crisis highlights the urgency of decarbonising social housing

This winter has been a busy time for our decarbonisation and energy efficiency team. From responding to the energy crisis, to the latest wave of the Social Housing Decarbonisation Fund and preparing for minimum energy efficiency standards in the sector, there is lots to recap on since our last update in November.

The ongoing energy crisis has led to a renewed focus on decarbonising homes in order to bring down household energy bills and reduce our reliance on global energy markets, highlighting the benefits of energy efficiency measures beyond contributing to our long term zero emissions goals.

Various government support packages were put in place over the winter to help households and organisations with the rising cost of energy. We have been engaging with the government and our members to ensure that these support packages reach everyone who needs help throughout this winter and through to 2024. We have focused on the support in place for heat network customers, who were initially excluded from the support packages because of the way they receive their energy (via commercial contracts rather than domestic contracts). Our lobbying helped to secure equivalent support for these customers via the Energy Bills Support Scheme Alternative Funding (EBSS AF) and through the Energy Bill Relief Scheme (EBRS) and Energy Bill Discount Scheme (EBDS).

While the Energy Bill Relief Scheme came to an end in March, the Energy Bills Support Scheme Alternative Funding and Energy Bill Discount Scheme are still in place to support heat network customers. The Energy Bills Support Scheme Alternative Funding portal provides a one-off £400 payment to these customers, and is open until 31 May 2023. The Energy Bill Discount Scheme replaced the Energy Bill Relief Scheme from April 2023 to April 2024 and caps the unit cost of gas and electricity for commercial contracts. At the Spring Budget, the Chancellor announced a higher rate of the Energy Bill Discount Scheme that will be applied for heat networks to ensure domestic heat network customers receive the same level of support as other customers who are protected by the Energy Price Guarantee.

There has also been a lot going on in Westminster. Back in February it was announced that the Department for Business, Energy, Innovation and Industrial Strategy (BEIS) would be split into three new departments, with the Department for Energy Security and Net Zero (DESNZ) tasked with ‘securing the UK’s long-term energy supply, bringing bills down and halving inflation’. In terms of what this means for social housing, it is good to see a dedicated department for net zero and we will continue to work closely with the government to highlight the work housing associations are already doing and to influence the direction of future policy. We have been invited to represent the sector on the social housing sub-group of the new Energy Efficiency Taskforce, the first meeting of which is set to take place this month.

Last month DESNZ announced that a total of £778m has been awarded to 107 projects across the country for wave two of the Social Housing Decarbonisation Fund (SHDF). The funding will be rolled out from April 2023 to upgrade the least efficient social homes over the next two years. With dramatic increases to the cost of energy in recent months, and the disproportionate impact this will have on low income households, the work necessary to bring the homes of housing association residents up to EPC C is now even more urgent in order to reduce their fuel bills. Research we published in November showed that upgrading the remaining social rent homes to EPC A, B, or C could save residents more than £700m a year in heating costs, equating to an average saving of £567 per household per year. We continue to work closely with DESNZ on current and future waves of the Social Housing Decarbonisation Fund, to ensure it is accessible and supportive for housing associations.

While the Social Housing Decarbonisation Fund requires homes to be upgraded to a minimum rating of EPC C, there is currently no legislation requiring all social homes to reach a minimum energy efficiency standard within a specified timeframe. The government has committed to consulting on minimum energy efficiency standards in the social rented sector within six months of the Social Housing (Regulation) Bill receiving royal assent. The NHF will be working closely with Department for Levelling Up, Housing and Communities (DLUHC) and DESNZ over the coming months ahead of the consultation period to ensure the views of housing associations are represented in the consultation proposals. We have developed a paper which sets out the proposed consultation in more detail and asks for feedback from our members to inform our position.

We know that housing associaitons are committed to decarbonising their homes both to contribute to the UK’s 2050 net zero target and to make residents’ homes more comfortable and affordable to heat. Over the coming months we will continue to engage with the government to ensure current and future funding streams, and regulations enable housing associations to continue with this work at pace. We’re always keen to hear from our members about your work to your reduce carbon emissions, so do always feel free to get in touch with me.