WWF-UK and ScottishPower commissioned Frontier Economics to develop a modelling tool that can investigate how different additional public spending levels could help address fuel poverty across Great Britain through energy efficiency improvements.

Applying the English definition of fuel poverty, we estimate that fuel poverty affects nearly four million households across Great Britain. Those in fuel poverty often face significant health and wellbeing issues through inadequately heated homes, as well as higher risks of falling into debt. Increasing home energy efficiency has the potential to reduce fuel poverty, providing significant social benefits, while also delivering major reductions in greenhouse gas emissions.

In this report, we assess the impact of providing additional funding targeted at improving fuel poor homes, on top of existing policies and UK Government commitments, and alongside the strengthening of private rented sector regulations.

We find that applying this funding and these measures to improve the energy efficiency of fuel poor homes would, at all levels considered, facilitate strong progress towards meeting the target of ensuring that as many fuel poor homes as is reasonably practicable achieve a minimum energy efficiency rating of Band C, by 2030. It would also deliver significant bill and carbon savings.

• This funding would accommodate all 0.7m FPEER E/F/G fuel poor homes being upgraded to an FPEER C level, as well as 0.7m – 1.6m FPEER D homes. In total, the funding results in 1.4m- 2.3m homes being upgraded. This is 38% to 61% of the GB fuel poor group.
• When this additional public funding is combined with strengthened regulations for the private rented sector from 2028, this could result in between 2.3m to 3.0m homes in the fuel poverty household group being improved to FPEER C level. This is 62% to 80% of the GB fuel poor group.

Applying this funding and these measures would also deliver significant bill and carbon savings. We estimate that household bills would reduce by around £300-400 per year, depending on the funding scenario. For some households (such as households with heat pumps installed in  direct electric heating homes with insulation), bill savings are more than a thousand pounds per year.

We recognise that there are trade-offs for a Government to make between focussing funding on treating the homes with the worst energy efficiency rating or focussing on treating the largest numbers of households. There are also trade-offs between delivering full upgrades to homes (including heat pumps, as appropriate) or focussing the limited funding on reaching more households with a ‘fabric first’ insulation upgrade approach. The results presented in this report reflect a prioritisation of reduced bills and warmer homes for those in the deepest fuel poverty, combined with a targeted roll out of heat pumps to a limited proportion of fuel poor households. However, the modelling tool we have developed will enable the exploration of different approaches to policy development in this important area.

Click here to read the full report.