The Government is monitoring the delivery of ECO4 against the current cost assumptions and will consider changes if necessary. Changing the cost assumptions may require either a change to the overall energy bill reduction target, the estimated funding, policy details of the scheme, or a combination of all three. Such changes would require public consultation and regulatory change.

The number of Green Deal plans provided by Home Energy & Lifestyle Management Ltd which included External Wall insulation in Scotland by parliamentary constituency are shown in the table below.

To manage the risk of revealing personal or commercial data, our approach is not to release non-zero counts of less than five for a small geographic area.

ECO delivered approximately 2,800 insulation measures a week in 2018, but insulation is also delivered outside of ECO. We do not have data for those measures. A further 18,200 insulation measures a week would be required to reach 21,000 per week, when compared to insulation delivered under ECO during 2018.

Our view is that a range of measures are needed alongside ECO to drive an increase in deployment of energy efficiency. In the Clean Growth Strategy we set out our aspiration to improve all homes to EPC Band C by 2035, where cost effective, affordable and practical. Alongside the Clean Growth Strategy we called for evidence on Building a Market for Energy Efficiency, which sought evidence on the range of measures required to shape the market for the future in line with the aspiration.

Other insulation measures are expected to be delivered under the Minimum Energy Efficiency Standards Regulations, which require private rented properties in England and Wales to have an EPC rating of at least an E before they can be let. Where a landlord needs to improve an EPC F or G property to meet the standard, their costs are capped at £3,500.

The Clean Growth Strategy set out our aspiration that as many homes as possible will be upgraded to an Energy Performance Certificate (EPC) Band C by 2035, where practical, cost-effective and affordable. BEIS estimate that the total investment cost of meeting this aspiration is in the order of £35-65 billion (undiscounted), with the actual cost dependent on a range of factors including the technology mix used in particular properties.

Further innovation in home energy efficiency measures could lead to cost reductions which reduce these estimates significantly. A key component of the Buildings Mission announced last year, is to halve the cost of retrofitting existing homes to a similar standard of new homes. We recently approved a £10 million innovation project for whole house retrofit, to demonstrate a cost reduction trajectory through retrofitting similar properties at scale.

Improving the energy efficiency of our homes reduces the overall energy system costs of heat decarbonisation. The level of additional energy efficiency required is dependent on the heat decarbonisation scenario.

Given the scale of investment required, financing these improvements will require funding from both public and private sources. In the Clean Growth Strategy, we committed to extend support for home energy efficiency improvements to 2028 at least at current levels of support through the Energy Company Obligation. This is equivalent to around £6 billion of investment. Additional investment in cost-effective energy efficiency measures will be needed from private sources, including owner occupiers, social landlords and private landlords. For example, landlords of the worst performing properties are already required to invest up to £3500 in improving their homes to a minimum EPC Band E before they let their property, where no third party funding is available.

Different parts of the UK have taken different approaches, reflecting the devolved nature of energy efficiency policy. In Scotland, for instance, zero interest loans are available to homeowners for energy efficiency improvements as well as equity loans where interest is repaid on sale of the property.

In other EU countries a range of approaches have been taken to support home energy efficiency improvements. These include low and zero interest loans, mortgage incentives, capital subsidies, tax credits and reduced VAT on the installation of energy efficiency measures. We are always looking to learn from international experience in developing policies which are right for the UK.

Given the importance of low cost financing, our Call for Evidence on Building a Market for Energy Efficiency sought evidence on different ways of financing energy efficiency, and other fiscal incentives. Different approaches will be appropriate for different consumer groups and tenure types and there is no one size fits all approach. We are currently analysing responses to this.

Financing these improvements presents real opportunities for green finance innovation, for example around green mortgage products or green bonds. The UK’s first ever Green Finance Strategy will also be published in the summer. This strategy will build on the recommendations of the Green Finance Taskforce report: Accelerating Green Finance and will set out the steps required to attract the investment we need into our clean economy, including around financing residential energy efficiency.

We will set out further details on how we will catalyse the market for energy efficiency later in the year and stimulate the required investment. This will take account of responses to our Call for Evidence alongside recommendations from the National Infrastructure Commission, and Committee on Climate Change.

The National Infrastructure Commission made over 50 recommendations to the government, in their National Infrastructure Assessment (NIA) published in July 2018. As announced at Budget 2018, the government will respond in full to the NIA through a National Infrastructure Strategy, including on the installation rate of energy efficiency measures in the building stock.

The government has already set out an ambitious aspiration on energy efficiency in the Clean Growth Strategy, for as many homes as possible to reach EPC Band C by 2035 where practical, cost-effective and affordable; and the Prime Minister has announced an Industrial Strategy mission to at least halve the energy use of new buildings by 2030. The government has a growing programme of ambitious policies to drive forward progress towards this aspiration, including extending the Energy Company Obligation from 2022 to 2028 to support more than £3bn of investment to upgrade the energy efficiency of around a million more homes, tightening the regulations on minimum energy efficiency standards in private rented homes, and announcing the introduction of a Future Homes Standard to ensure that all new homes are built with world-leading levels of energy efficiency and low-carbon heating. The government is further considering the detail of these policies, in order to unlock the necessary energy efficiency improvements for homes and businesses during the 2020s.

At Spring Statement, the Chancellor confirmed that the National Infrastructure Strategy will be published later in 2019, alongside the Spending Review and Autumn Budget. The Spending Review will determine the government’s spending priorities going forward, assessing spending in the round against government priorities and a broad evidence base. As part of that evidence base, HM Treasury guidance in the Green Book sets out the methodology by which Departments should undertake cost-benefit analysis for all proposals that concern public spending and changes to regulations, including for energy efficiency and broader infrastructure requirements. These are scrutinised by Treasury spending teams to support decision making and ensure value for money. Impact Assessments associated with particular policy proposals are published online at: https://www.gov.uk/government/publications.

The National Infrastructure Commission made over 50 recommendations to the government, in their National Infrastructure Assessment (NIA) published in July 2018. As announced at Budget 2018, the government will respond in full to the NIA through a National Infrastructure Strategy, including on the installation rate of energy efficiency measures in the building stock.

The government has already set out an ambitious aspiration on energy efficiency in the Clean Growth Strategy, for as many homes as possible to reach EPC Band C by 2035 where practical, cost-effective and affordable; and the Prime Minister has announced an Industrial Strategy mission to at least halve the energy use of new buildings by 2030. The government has a growing programme of ambitious policies to drive forward progress towards this aspiration, including extending the Energy Company Obligation from 2022 to 2028 to support more than £3bn of investment to upgrade the energy efficiency of around a million more homes, tightening the regulations on minimum energy efficiency standards in private rented homes, and announcing the introduction of a Future Homes Standard to ensure that all new homes are built with world-leading levels of energy efficiency and low-carbon heating. The government is further considering the detail of these policies, in order to unlock the necessary energy efficiency improvements for homes and businesses during the 2020s.

At Spring Statement, the Chancellor confirmed that the National Infrastructure Strategy will be published later in 2019, alongside the Spending Review and Autumn Budget. The Spending Review will determine the government’s spending priorities going forward, assessing spending in the round against government priorities and a broad evidence base. As part of that evidence base, HM Treasury guidance in the Green Book sets out the methodology by which Departments should undertake cost-benefit analysis for all proposals that concern public spending and changes to regulations, including for energy efficiency and broader infrastructure requirements. These are scrutinised by Treasury spending teams to support decision making and ensure value for money. Impact Assessments associated with particular policy proposals are published online at: https://www.gov.uk/government/publications.

Stamp Duty Land Tax (SDLT) was devolved to Scotland by the Scotland Act 2012 and subsequently replaced with the Land and Buildings Transaction Tax in April 2015.

In 2007, the then government introduced a relief from SDLT for zero-carbon homes intended to encourage greater energy efficiency in buildings.

However, the policy was found to be ineffective with a limited number of transactions taking up the relief and it was ended as planned in September 2012.

There are currently no plans to link SDLT on properties with their relative energy efficiency.

As stated in the Committee on Climate Change’s report, the level of home insulation under the Energy Company Obligation (ECO) in 2017 was 5% of the level of home insulation under the Carbon Emissions Reduction Target (CERT) in 2012.

Installations under CERT were at their highest in 2012 as suppliers delivered a significant proportion of their obligation in its final year. Government has reduced the overall level of ECO funding by approximately half since 2012 to reduce the cost burden on domestic energy bills. This funding reduction does not account for a reduction in insulation rates of 95%, where a decreasing potential for easy, low-cost insulation measures is a large contributor to fewer annual installations.