In its Powering Up Britain plan, the Department for Energy Security and Net Zero, which was created in February, also said it would respond to the consultation on improving home energy efficiency performance through lenders later this year.
The government said it would grant funding to organisations to test new green finance products, through the Green Home Finance Accelerator which was announced last year. Pilots are pencilled in for early 2024 and the government said this will “empower more consumers to decarbonise their homes”.
It added: “Behind every new net zero investment, sits a team of financial, legal, data and accountancy experts, presenting a huge opportunity for the UK financial sector and professional services. The UK’s financial sector already leads in green project financing and investment analytics. We set out how we will capture this opportunity in the 2023 Green Finance Strategy.”
David Postings, chief executive of UK Finance said: “The banking and finance sector fully supports the government’s goal of net zero UK emissions by 2050 and is committed to a just transition. We welcome the government’s commitment to investment in the UK’s energy independence and hope this package can be used to deliver green growth up and down the country.
“Providing a clearer path to net zero and mobilising investment through the Green Finance Strategy is crucial to enable the banking and finance industry to help deliver a just transition to a more sustainable economy.”
Lower energy costs and more independence
The government wants to see the country have one of Europe’s cheapest wholesale electricity prices by 2035 and move towards energy independence. It also wants to make it easier for people to switch to green products by rebalancing prices between gas and electricity.
It will introduce a Great British Insulation Scheme which would aim to save 300,000 of the least energy efficient homes up to £300-400 a year by March 2026. This will be part of a £1bn programme to fund upgrades such as loft and cavity wall insulation. It will target low income households and low council tax band homes.
The government will lay the legislation for this by summer. This is expected to contribute towards the government’s target to reduce energy demand by 15 per cent by 2030.
Postings added: “We have long called for further steps to green the housing stock and welcome the government’s pledge to increase energy efficiency as part of the Great British Insulation Scheme.”
A full technical consultation for Future Homes Standard and Future Building Standard in 2023 will also be published this year. This will include ways to encourage onsite renewable electricity generation such as through rooftop solar in new homes and buildings.
For solar, the government will set up a taskforce to develop a delivery roadmap and assess options for low-cost finance from retail lenders.
The Boiler Upgrade Scheme has been extended until 2028 and the government plans to enhance marketing to increase awareness and take up.
The government also wants to phase out all new and replacement natural gas boilers by 2035 and £30m will be invested in the development of heat pumps by UK manufacturers to help facilitate this.
It said: “People’s homes will be heated by British electricity, not imported gas.
“We want to make it as cheap to buy and run a heat pump as a gas boiler by extending the Boiler Upgrade Scheme by three years, and by rebalancing the costs of electricity and gas.”
Energy Security Secretary Grant Shapps said: “Access to cheap, abundant and reliable energy provide the foundation stone of a thriving economy with our homes and businesses relying on it to deliver our future prosperity.”
