Improving energy efficiency in homes should be paid for with taxes - report

Making homes more energy efficient should be a "national priority" paid for through taxes, the industry has urged.

A new report from industry body Energy UK on reducing carbon emissions said improving the energy efficiency ratings of all buildings should form part of a national infrastructure programme.

It also called for measures to ensure new onshore wind farms - the cheapest form of power, but one the Tories have blocked - can be built in communities that want them, as part of efforts to cut the UK's carbon emissions at least cost.

Currently, improvements to the energy efficiency of homes are paid for through a levy on consumer bills, but the report called for any subsidies for a national programme to be funded from general taxation to avoid unfairly hitting those in fuel poverty.

Those who are able to pay for improvements to the homes they own, including landlords, should be encouraged to do so with regulations and attractive loans, grants, tax incentives and stamp duty rebates, it said.

Improving the efficiency of homes will cut consumer costs as they will use less energy, with a report by the Government's Committee on Climate Change revealing bills were down over the past eight years because of more efficient appliances

A national infrastructure efficiency programme, for which fuel poverty campaigners have long argued, will help build a strong supply chain and encourage competition, the report argued.

Greater energy efficiency of homes is also needed to make sure that efforts to tackle the greenhouse gas emissions from heating, most of which is supplied by gas, are as effective as possible.

Cutting emissions from heat for homes, offices and industry has not been tackled effectively and must be addressed urgently to meet legally binding goals to cut carbon.

A range of measures could be used, including hydrogen or low-carbon gases to replace natural gas, district heating systems, heat pumps and hybrid technologies, the report said.

Pilot schemes and research are needed to assess the pros and cons of the various technologies and the impact on the grid of turning to electricity to provide heat should be analysed.

Lawrence Slade, chief executive of Energy UK, said: "Our new report highlights the need for a long-term, certain and holistic policy framework that will ensure the UK meets its carbon targets at the least cost to consumers.

"The industry believes that energy efficiency should be a national priority to make the transition to a low carbon economy more affordable for both consumers and businesses.

"To tackle climate change, we need to have an honest debate about benefits and costs.

"All sectors including heat and transport need to work together and play their part in the same way the energy industry has done for decades."