UK's Energy Efficiency Program
British politician Rishi Sunak recently announced the U.K.’s official energy efficiency plan. The £3 billion plan includes a £2 billion Green Homes Grant and £1 billion of funding to make public buildings more energy-efficient, among other initiatives. Each of these projects presents an important step toward sustainability, particularly the Green Homes Grant, and could even contribute to the reduction of poverty within the United Kingdom.

Green Homes Grant

The U.K. government hopes that the £2 billion Green Homes Grant will encourage homeowners and landlords to apply for vouchers, starting in September 2020, to improve the energy efficiency of their homes. The vouchers will cover at least two-thirds of the total cost, which is up to £5,000 for most households. For low-income households, the vouchers will cover the full cost of improvements, up to £10,000.

Effects of the Energy Efficiency Plan

The U.K.’s energy efficiency plan will create approximately 140,000 green jobs, improve the energy efficiency of over 650,000 homes, reduce carbon by more than half a megatonne a year and potentially shave £300 a year off of homeowner’s bills. These changes also have the potential to drastically alter the nation’s interaction with the environment for the better.

How will the UK’s Energy Efficiency Plan Help People in Poverty?

  1. Low-income households typically spend more on energy expenses. A 2010 study found that “low-income householders spend 10 percent or more of their income on energy expenses”, pointing out that as income goes up, expenses go down, since middle- and upper-income households tend to only spend 5% or less of their income on energy expenses. Therefore, the U.K.’s efforts to help low-income households become energy-efficient will allow them to have more disposable income.

  2. Low-income households have a more difficult time adapting to large fluctuations in natural gas prices, as they have less disposable income compared to middle and upper-income households. Due to market supply and demand, natural gas prices can experience fluctuations as large as 140%, as was seen in 2016. In March 2016 natural gas was $1.639/MMBtu, and by December of the same year, prices had risen to $3.93/MMBtu. The U.K.’s energy efficiency plan can help to alleviate low-income households’ concerns over the uncertainty of natural gas prices by making their homes less dependent on them.

  3. Low-income households are at greater risk of developing health problems. Many low-income households do not have enough income for necessary home improvements, meaning that these homes can often suffer from structural problems such as leaks, which can lead to the development of mold and infestations. Exposure to these issues can increase the chances of arthritis, respiratory disease, mental illness and heart disease. When homeowners make improvements to their homes to make them more energy-efficient under the Green Homes Grant, they will also lower their risk of experiencing these health issues.

The U.K.’s energy efficiency plan is taking the initiative that all developed countries should be to alleviate poverty in their country and increase the use of sustainable energy. By providing grants to homeowners and updating technology in public buildings, the U.K. is making great strides toward environmental stability.

Araceli Mercer
Photo: Flickr