Tackling fuel poverty

There has been a welcome drop in the number of households in fuel poverty in Scotland. However, it’s still a long way from the eradication that was supposed to happen this year and still higher than the first year statistics were collected in 1996.

Some key points from the report:

  • Between 2014 and 2015 the rate of fuel poverty declined by 4%. In 2015 there were around 748,000 fuel poor households representing 30.7% of all households.
  • Around 203,000 households, or 8.3% were living in extreme fuel poverty in 2015.
  • Just over half of the reduction in fuel poverty rates can be attributed to the drop in energy prices and around a third to improvements in energy efficiency
  • On average the private and the social housing sector have similar rates of fuel poverty: 30 and 33% respectively. There is more noticeable decline in fuel poverty in the social sector, reducing the social-private gap which was seen in the SHCS sample for 2014.
  • In 2015 37% of Scottish homes were in EPC band C or better and half had an energy efficiency rating of 65 or higher (SAP 2012). This is similar to 2014.

Norman Kerr, Director of Energy Action Scotland said:

Just last month the statutory duty under the Housing (Scotland) Act 2001 for the Scottish Government to eradicate fuel poverty expired and the target was missed.  Two working groups were tasked to advise Scottish Ministers on their next steps and they have made over 100 recommendations.  It is now vital that the Scottish Government uses this advice to develop a new strategy, set a new fuel poverty target and increase funding for its programmes in the upcoming Budget Statement. The progress to date on solving the problem of cold, damp and unaffordable to heat homes must not be lost, but can and should be built upon.”

With energy prices remaining relatively low, spending on energy efficiency remains an important element of a fuel poverty strategy. Twenty businesses have written a letter, with the backing of the Existing Homes Alliance, calling on ministers to increase spending on energy efficiency in next year’s budget to £190m. They say this would allow for existing schemes to be expanded and provide confidence to the sector at the start of the new Scotland’s Energy Efficiency Programme (SEEP).In the longer term, the alliance wants spending to be ramped up to an average of £450m a year over ten years.

Another measure that would help with eliminating fuel poverty is ending the price differential between pre-payment meters and direct debit. Prepayment customers represent just 15% of the domestic market, but account for over 30% of all fuel poor households.

A recent UK analysis shows that removing the price disparity between tariffs could lift between 95,000 (12%) and 181,000 (23%) of fuel poor prepayment customers out of fuel poverty and reduce the gap for the remainder.  The widespread adoption of SMETS2 smart prepayment meters (Smart PPM) could deliver real competition in the prepayment market, driving down prices towards parity with direct debit payment.

The reduction in fuel poverty in Scotland is welcome, but there is still much to do when nearly a third of households remain in fuel poverty. This is the time to develop a new strategy and invest in energy efficiency.

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