Without doubt, many social housing residents are facing a perfect storm this winter with a cut to Universal Credit and rocketing energy bills. Together, they threaten to make life much more difficult for many housing association residents, pushing some further toward or deeper into fuel poverty.
We know that housing associations will continue to support residents however they can and we also know from our work on decarbonising homes that climate action can be a powerful tool for combatting future energy crises and protecting our residents.
There is a variety of systemic causes to this energy crisis, but at the root of the issue, increased global demand has met reduced global supply and driven up the wholesale cost of gas significantly. We’re in a particularly vulnerable position in the UK. We only store enough gas to meet the demand of four to five winter days, which is just 1% of Europe’s total available storage. The Netherlands by comparison has storage capacity for more than nine times as much, while Germany’s capacity is sixteen times greater. Furthermore, we rely overwhelmingly on gas to heat our homes. In fact, nearly 50% of the gas we import is used for heating our homes, which leaves everyone – including housing association residents – exposed to volatile global gas markets.
NHF work on decarbonising housing associations has identified two broad phases to this national project and both could protect social housing residents from future energy crises.
Firstly, properly insulating homes is key. In the UK, our homes are among the least energy efficient in Western Europe. The most affordable energy is that which we wouldn’t need to buy in the first place so by increasing insulation in our homes we would reduce our demand for gas, buffering the country – and housing association residents – against global fossil fuel market volatility.
We are already seeing that those living in poorer insulated homes are bearing the brunt of this current energy crisis. Alongside mitigating future energy crises, better insulation means more affordable bills for housing association residents in normal (more stable) times too. Our sector’s impressive work to date installing insulation has already shown this to be the case. Despite the median income of social housing residents being 17.1% lower than those in the private rented sector, the rates of fuel poverty in our sector have fallen from 40.3% in 2010 to 18.4% in 2019.
The pandemic changed the way many of us use our homes. With more people spending more work and leisure time in their homes, energy use at home increased 7% in 2020 compared to 2019 and this is not likely to return to pre-pandemic levels. This again, increased residents’ vulnerability to volatile global markets and strengthens the case for investment in improving insulation.
Secondly, once our homes are much better insulated, we can shift away from gas altogether to clean heat technologies. The price and volatility of fossil fuels will only continue to increase in the coming decades, while the cost of renewables continues to fall exponentially.
There is a clear pathway to a more secure domestic energy system for our country and to stable, affordable bills for our residents if we invest significantly in a diverse portfolio of renewables, electricity storage, smart distribution technologies and the electrification of home heating. The Prime Minister’s recent commitment to create a decarbonised electricity grid by 2035 is promising.
While all but the heating technologies lies largely outside of our sector’s sphere of influence, we would like to work with the government to build up our domestic heat pump market and see more investment in training the workforce necessary to carry out retrofit and clean heat installation. For a future in which we are less reliant on gas, we need to bring down the cost of electricity for consumers. 25% of an electricity bill is currently used to pay for various government environmental and social schemes. These schemes are valuable, often aimed at reducing carbon emissions and fuel poverty, but they would be better funded through progressive taxation, which would lower bills for residents now and support our more secure, sustainable electric future for heating buildings.
As we prepare to launch the results of our decarbonisation work at Summit: Special Edition on 19 October 2021, let’s agree that while challenging, decarbonising housing association homes is of the utmost importance for our residents, our nation’s energy security and ultimately for the health of the planet.