New research from Newcastle University on one of Great Britain’s largest fuel poverty projects finds that on average households saw their annual energy running costs drop from £2,011 to £1,089.
Before making improvements, 6,428 homes (41%) had annual running costs above £2,000. Post-intervention, the number of homes with over £2,000 running costs fell by over 90% to 460.
The total energy bill savings generated by the project were £10.8 million – much needed amid the energy crisis and went some way to offsetting the huge price rises across the UK.
Also published is a detailed blueprint for the future design and delivery of fuel poverty and energy efficiency programmes.
New research published today, 21 June, reveals the significant impact the Warm Homes Fund (WHF) project had, saving households a total of over £10 million – that’s £922 per household.
The project, one of the largest fuel poverty programmes to be delivered in Great Britain, delivered energy efficiency measures to fuel-poor households since September 2017. It will run until July 2024.
Measures delivered by the WHF included first-time gas central heating, air source heat pumps and energy and health-related advice and support.
It was funded by National Grid and administered by Affordable Warmth Solutions (AWS). The research was carried out by a consortium made up of Newcastle University, National Energy Action (NEA), and Energy Audit Company (EAC), with support from academics at University of Bristol.
Significant savings for fuel-poor households
The research found that significant energy savings were made for the households involved. Mean annual running costs dropped from £2,011 to £1,089 – so on average the installation of a new heating system saved households £922 per year. This was based on a fuel price figure calculated prior to the beginning of the energy crisis in October 2021. Ahead of the energy crisis, which saw typical bills double, these savings have been crucial.
Pre –intervention, just 18% of households were able to keep their whole homes warm when it was cold outside. Post-intervention, this increased fourfold to three-quarters (76%). Post-intervention, 48% of households reported that their physical health was better than before, and 39% of respondents reported that their mental health was better.
Around 5,500 homes (35%) did remain in fuel poverty – as defined by the government’s Low Income Low Energy Efficiency (LILEE) metric – after improvements, however, they still saw significant savings. The average fuel poverty gap – the energy bill reduction that a fuel-poor household would need in order not to be fuel poor – dropped sharply from £699 to £121. This means that on average, where households remained fuel poor, their annual required running costs dropped by almost £600, greatly reducing the severity of their fuel poverty.
Jeremy Nesbitt, Managing Director, Affordable Warmth Solutions, says: “The report published by Newcastle University and its partners provides robust evidence that improving the energy efficiency of homes can provide immediate and tangible, positive outcomes for customers. We need to recognise this research has been undertaken during unprecedented rises in energy costs and despite this thousands of homes now use less energy, and have provided customers with an opportunity to live a warmer and more comfortable lifestyle. There’s still lots more to be done and I believe the blueprint on the delivery of future large-scale energy efficiency programmes can become part of the solution.”
Dr Gareth Powells, School of Geography, Politics and Sociology and the Centre for Energy, Newcastle University, says: “The evaluation has been a truly collaborative endeavour. The evaluation consortium includes academic, charity and private sector expertise working in close dialogue with one another and with colleagues from a wide range of organisations in energy efficiency policy and delivery. As a result, we are confident that the evaluation and blueprint are resources that can work for and reflect the experiences of those working in the energy efficiency arena but also the households and communities they serve.”
Helen Stockton, Research Manager, National Energy Action, says: “The energy and cost of living crises continue to affect low-income households and those in the least efficient homes. This research underlines the vital role of investment in energy efficiency and advice support to households struggling to keep warm, safe and well at home.
“It has been a privilege to work alongside our consortium partners on the evaluation of the Warm Homes Fund. It has revealed the multiple and real benefits of making homes warmer, energy costs more affordable, and the transformational difference this can bring to people’s health and wellbeing, environment and the wider economy.
“We hope the evaluation and blueprint will provide a valuable roadmap for the design of fuel poverty and energy efficient programmes of the future.”
Kevin Jobson, EAC, says: “This research shows how replacing old, expensive heating systems with modern ones benefits not just the residents, but also the wider economy; an important lesson.”
A boost for the economy
The project also showed how funding to help fuel-poor households can have a wider benefit for the economy. The total energy bill savings generated by the WHF, which can be regarded as an increase in household disposable income, was £10.8 million. As this money was subsequently spent by households again, a further £14.4 million of spending took place, demonstrating the positive economic impact of energy bill reductions on the wider economy. For every £1 invested in the WHF, a further £1.34 was stimulated in the wider economy.
Targeting low-income households produces a larger economic impact. By targeting low-income households, the WHF grants produced a greater boost in demand across the economy than if the funding had been targeted at middle-income households. Analysis shows that approximately £2 million more demand has been created by targeting low-income households.
Savings to the NHS generated by the WHF are estimated to be nearly £2.5 million a year, while the wider societal benefits are estimated at almost £42 million annually. Post-intervention, 48% of households reported that their physical health was better than before, and 39% of respondents reported that their mental health was better.
The WHF is split into three broad categories:
- Category 1 is focused on urban homes and communities, primarily through first-time gas central heating systems;
- Category 2 is focused on rural homes and communities, primarily through ‘non-gas’ solutions such as LPG or heat pumps; and
- Category 3 aims to provide energy efficiency and/or health-related advice and solutions for householders.
Later in the WHF, a fourth category was introduced, focusing on the extension of mains gas to Park Homes sites. The addition of Category 4 was stimulated by the (now replaced) Fuel Poverty Strategy for England3, which noted that Park Homes residents were at particular risk from the harms associated with not being able to adequately heat their homes.
Please go to the Warm Homes Fund Evaluation page to download the final report and supporting documents
- The three-year project was funded by National Grid.
- It was administered by Affordable Warmth Solutions (AWS) www.affordablewarmthsolutions.org.uk/warm-homes-fund/ @aws_cic @WarmHomesFund
- The research was carried out by a consortium made up of:
- Newcastle University, @UniofNewcastle
- National Energy Action (NEA), (www.nea.org.uk), @NEA_UKCharity
- Energy Audit Company (EAC)
- Academics at University of Bristol
- The average SAP rating of the dwellings before any improvements were made was approximately 51, corresponding to SAP band E. This is considerably lower than the national average, which is around 60. After making improvements the average rose to 68, one point below band C. The main effect is movement from the E, F and G bands into the C and D bands.
- Economic modelling shows that from the initial £150 million investment in the construction, retrofit and installer sector, and the support services sector, an additional £200 million of demand was stimulated in the economy. This produced a total economic demand stimulus of £350 million. This means that for every £1 invested in the WHF, a further £1.34 was stimulated in the wider economy.
- Wales has the largest range of cost savings, and the highest median net cost saving per year. Savings are also comparatively high for Orkney and North East Scotland. This potentially reflects the greater impact that can be achieved when rural communities, typically characterised by older and less efficient housing stock occupied by those on lower incomes, are targeted.
- Also published is a detailed blueprint for the future design and delivery of fuel poverty and energy efficiency programmes. This blueprint summarises the main findings of the evaluation and makes recommendations as to how fuel poverty and energy efficiency schemes should be designed in the future, including the core guiding principles that they should aim to follow.