Incentives could improve UK sales of energy efficient appliances

Sensemaking / Incentives could improve UK sales of energy efficient appliances

A re-think of the UK Government’s energy efficiency strategy would benefit consumers and generate carbon savings, says Trewin Restorick of Global Action Plan.

By Futures Centre / 06 Aug 2013

The Chief Economist of the International Energy Agency has described global policies to promote energy efficiency as an ‘epic failure’. Research by my company, Global Action Plan, also suggests that opportunities for better energy efficiency strategies are being missed, and that a re-think is required.  

Surprisingly, the problem is not a shortage of cash. One government-led initiative alone, the Energy Company Obligation (ECO), will result in an estimated £2.4 billion being spent on energy efficiency measures in UK homes – around £94 per household.  

This funding is mainly focussed on improving the fabric of UK homes, specifically external wall cladding and hard to fill cavity walls – expensive measures which are tricky to implement.

Perhaps a more cost-effective form of carbon-abatement lies inside the house, with the ever increasing number of domestic appliances we buy.

Global Action Plan’s ‘Watts in the Kitchen’ report found that significant cost and carbon savings could be made by persuading consumers to buy the most efficient appliances.

At present the UK lags a long way behind other European countries when it comes to buying efficient appliances. Subsidies and other legislative mechanisms have been used to change the continental market. For example, in Spain, a scheme which ran from 2006-2012 provided a rebate of up to €105 when people replaced old inefficient appliances. Around 3 million new appliances were sold, saving enough energy to power 4% of Spanish homes. A similar initiative in Italy saw a 28% increase in A+ and A++ appliances, saving €9.5 million on energy bills.

These incentives appear to have fundamentally changed the market. Manufacturers have responded by creating a wider range of choice for people who want to buy the most efficient machines. Wander into a German appliance shop, and you’ll be able to take your pick from seven or eight different models of the most efficient fridge-freezers. In the UK it is more likely to be one or two.  

Retailers have also responded to the incentive, providing better quality advice than their UK counterparts: a mystery shopper exercise undertaken by Global Action Plan found that UK retailers struggled to give clear energy efficiency advice, instead focussing on the different features of the appliances.  

Our research suggests that the Government needs to take a broader view on promoting energy efficiency – a relatively low level investment over a short period of time could shift the market toward the most efficient appliances, creating significant carbon savings.  

Discussions I have had with key stakeholders suggests that such a change in policy would have widespread support. Two major retailers are already discussing how they can improve point-of-sale advice, enabling customers to see at a glance how much it will cost them to run the appliance every year. A leading energy company has also indicated that such a scheme would be easier to run than some of the existing ECO initiatives.

Crucially, shifting some ECO funding to appliances will enable retailers to talk directly to consumers about the importance and benefits of energy efficiency.  This would have the wider benefit of creating a more energy aware public, and might make it easier for the Government to ‘sell-in’ some of its other initiatives, such as the Green Deal, which are struggling to gain traction.

Hopefully the Government will use the new research to widen their thinking around energy efficiency strategies. If they don’t I fear the ‘epic failure’ tag could well be justified.

Trewin Restorick is the founder and chief executive of Global Action Plan, an environmental charity specialising in behavioural change. 

Follow Trewin on Twitter: @trewinr

Photo Credit: Ryan McVay/Digital Vision/Thinkstock

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