Some 3.5 million households in the UK were in fuel poverty in 2010, according to the most recent figures from the Department of Energy and Climate Change. A combination of low incomes, high energy prices and generally poor standards of heating and insulation across the country mean millions of people are struggling to heat their homes throughout the winter, with some even finding it necessary to make a choice between food and heating.
While the latest statistics appear to show an improvement compared with 2009, chief executive of the charity National Energy Action (NEA) Jenny Saunders warned that the figures were compiled ahead of a “period of profound economic austerity”, together with sustained increases in domestic gas and electricity prices. The NEA estimates that higher energy prices in 2011 will make heating unaffordable for five million households in England.
There are some solutions available to some people in fuel poverty. The coalition government’s Green Deal scheme – one of its flagship policies – aims to provide free or subsidised insulation for millions of households in a bid to improve energy efficiency and reduce bills. However, the scheme has recently come under fire, particularly after it was revealed it will prioritise more expensive solid wall insulation, which costs around £7,500 compared with £500 for simply loft insulation. Critics like the NEA say this means the Green Deal will not provide enough help in practice to those who really need it.
“The government response has been to effectively halve funding for schemes to improve heating and insulation standards in properties occupied by financially disadvantaged households, despite the fact that energy efficiency is the most rational long-term solution to fuel poverty. From next year, annual expenditure on these heating and insulation programmes will reduce from the 2010-2011 level of £1.1 billion to around £540 million,” said Ms Saunders.
Insulation is not the only solution to fuel poverty: the Feed-in Tariff (FiT) scheme aims to reduce fuel bills while encouraging clean, renewable energy sources by providing loans for the installation of microgeneration systems. By using a Microgeneration Certification Scheme-approved company such as EvoEnergy, homeowners can install their own solar energy systems to power their properties and repay the loan by selling excess energy back to the National Grid.
The FiT scheme has also seen its share of troubles, after rapid uptake last year led the government to cut the rate homeowners will receive for selling energy to the grid. Ministers were concerned that the falling costs of solar energy made the subsidies too generous, and the cuts were made to prevent the FiT from running over-budget. Despite the cuts, the scheme remains an attractive proposition for those able to install a microgeneration system, and may yet provide a long-term solution to the problem of fuel poverty.
“I am encouraged by the fall in fuel poverty in the period to April 2011, but there is no room for complacency. Fuel poverty remains a serious national problem and the coalition is absolutely committed to tackling it,” said energy and climate change minister Greg Barker.