Energy Efficiency: the Nudge Agenda Trigger Points Research

1. Energy Efficiency: the Nudge AgendaTrigger Points Research Greg ShreeveInsight ServicesApril 2013

2. Policy into Practice: 2050 target of 80% carbon reduction against 1990 levels in the UK

3. What does that mean for homes? • Full Loft and cavity wall insulation on all suitable homes • Triple glazing on all poor homes • Reduced flow hot water fittings • Low energy light bulbs by 2016 • Draught proofing • Heating controls – room thermostats etc • Foam insulation on hot water tank • Insulation/lagging on primary hot water pipe-work • External insulation on all med and large homes • Internal insulation on all small homes • Insulated doors • Floor insulation • Reduced infiltration & heat recovery (existing homes 2007-2010 only) • Energy efficient appliances • All small existing and new build homes up to 2019 with gas connection – community gas CHP, if no gas connection – community biomass boiler • All medium and large homes to have STHW and PV • Large and medium homes in good condition to have GSHP. Large and medium homes in poor condition to have biomass boilers. • Post-2019 homes – no modifications as they are zero carbon homes. Plus people living differently in their homes and substantial change in the way we generate energy

4. Barriers for homeowners to energy and carbon saving improvements

5. Attitudes to energy saving alterations There are different types of alterations that are considered differently… ‘Easy additions’ • Energy saving bulbs, lagging pipes/insulating water tank, (draught proofing) • Claim they would consider these independently of other home improvement projects ‘Replacements’ • A-rated appliances, water saving devices, double or ESR glazing, A-rated boiler • If replacing these, makes sense to consider energy saving options • So ‘triggers’ for these are the replacement occasion itself e.g. having new kitchen (appliances), boiler breaks (boiler) ‘Major alterations’ • External wall insulation, internal wall insulation, cavity wall insulation, floor insulation • Perceived to be big, expensive, messy jobs (except cavity walls, for some) • At present little consideration and/or awareness of these (except cavity walls, for some) • NB. External wall insulation rejected outright by majority – cost, looks, hassle Most resistance

6. Why Nudges and Triggers? “If you go with the grain of people's instincts you are more likely to achieve the public policy outcomes you want, rather than sitting in a government department dreaming up some rational scheme that doesn’t work in practice" George Osborne, 2009 “There are many opportunities to provide householders with information and offer advice to coincide with other events or activities relating to homes (‘trigger points’). When people move into a new home they will see their EPC and often have the chance, as part of early changes they make to their home and with a clear loft, to address energy efficiency issues” Warmer Homes, Green Homes DECC 2010

7. Smart meter roll-out Loft insulation NewWindows Children move out Kitchen Refit LIFE EVENT/ LIFE STAGE What do we mean by trigger points? Newbaby Moving intogether Retirement Inheritance Living with children YoungCouple Empty nesters HOME SALE/RENTAL Preparation for rental Sale Purchase HOME IMPROVEMENT Whole houserefurb Extension/conversion OTHER

8. The theory: benefits of a trigger points approach in overcoming key barriers to energy efficiency improvements I can’tafford it I don’t have enough information It’s too much trouble • Life change triggers (retirement, inheritance) can provide access to finance; • Finance already in place for work on the home; • Can often incur the marginal rather than the full cost of action (eg scaffolding is already in place). • Residents already prepared for/ in disruption; • Already engaging with building professionals who can provide advice; • EPC is already in place for some trigger events. • BUT: • Triggers aren’t a panacea • Applicability in rented sector? Perhaps just one big trigger event there: voids.

9. Testing the theory How often do trigger events occur? How do they relate to life stages? How much are people willing to flex their refurbishment budget for energy efficiency? Do people welcome advice on energy saving at trigger points? Can action at trigger events build into a whole house refurbishment? Can effective trigger point based advice be provided?

10. 22% households considering refurbishment projects in next 3 years 25.7 million households in UK Homeowners account for 70% of the population (17.5 mil households) 22% are considering refurbishments in the next 3 yrs (3.9 mil households) Source: Ipsos Nat Rep CapiBus – wtd data

11. Approaches to promoting energy efficiency at trigger points

12. Tradesmen feel their clients would be motivated by this idea Motivation for clients to include energy saving 73% Base: total 107 B2 Having read the description, how motivated do you think your clients would be to include energy saving ideas when they refurbish their properties in general?

13. Room by Room upgrade standards Stepping stonestandard– initial stage based on Building Regulations Part L 2010 (consultation version) Best practice – aimed to achieve target EPC band B rating and based around the Energy Saving Trust publication Sustainable Refurbishment (CE309) 13

14. Upgrading a kitchen Stepping stone standard Upgrading walls and floor with 80mm high performance insulation, renewing door and windows to band C, mastic seal to penetrations, internal and external edges. Low energy lighting Best practice standard As above with 100mm floor insulation with 35mm perimeter, renew door and windows to band A, fit aerated low flow taps and fittings

15. Home owners – potential for energy saving stretch Averages shown Project Budget +13% +21% +16% +15% +16% +12% Quality Stretch +11% +27% +10% +16% +18% +39% Energy Saving Stretch Base: total (2161), entire room (572), kitchen (303), bathroom (261), heating (249), windows (199) A3 What sort of budget do you have in mind for this project? / A5If you were to stretch your budget to get a better quality end result , how much extra would you be willing to add to your budget? / A10 How much would you be willing to stretch your budget to include energy saving as part of your project?

16. Primary influencing opportunities Singles Greater opportunity for influence Young Couples Carefully planning their future. Starting a family, moving home, making property more contemporary, adding value Young Children Growing Children Older Children Primarily driven by functional need to update their properties. Considering fewer projects overall Preparing for retirement. Interested in specific projects -upgrading the heating, adding a conservatory Empty Nesters Undertaking modernisation projects. Lower budgets, willing to stretch but need a lot more convincing Strong functional and emotive (younger) need - running out of space. Involved in higher value projects. Recognise the benefit of future proofing and reducing CO2 Considering room refurbs & see the benefit in saving on energy bills & creating warmer rooms Greater commitment to the environment but limited budget. Less likely to spend on energy saving, interested mostly in draught proofing Lower commitment to the environment but interested in all forms of insulation. Higher available budgets, need convincing that stretch should be allocated to energy saving Interested in draught proofing. Want to live in sustainable and energy efficient homes - have already introduced proportionately more energy saving ideas Recognise the benefit of improving their energy rating. Want warmth and comfort. Have more energy saving measures already in place Show greater commitment to the environment but pre 1930s (dwelling) reluctant to add energy saving measures, post 1930s could be persuaded 16

17. Landlords Landlords interested in improving their properties on a whole-house, rather than room-by-room, basis; Focused on returns and feel that windows are the only energy saving product that leads to higher rents; Nonetheless, nearly all of them also accept the logic of making energy-saving improvements as they are doing other work.

18. Builders 84% of builders would like to be able to offer reliable energy efficiency advice to householders. 74% of homeowners would like to hear builders’ ideas on improving energy efficiency of their homes. BUT Builders often don’t make recommendations because of budget constraints and not wanting to lose the job by coming across as a salesman

19. Conclusions Home disruption (real and perceived) is a big barrier to more complex energy saving measures. Leveraging from existing or planned refurbishment projects is key.

20. Conclusions Whole house retrofit is a minority sport. Promoting energy saving alongside room retrofit is the way forward for many measures?

21. Conclusions Reaching people at the right lifestage is key:Growing families are a big opportunity

22. Conclusions Windows may be more important than we realise, in encouraging people to invest in energy saving

23. Conclusions “The Green Deal will help thousands of homes stay warm for less. Those people will benefit from energy saving improvements – and their energy bills will fall. The UK green sector is a success story – it is the sixth largest in the world and has a crucial part to play in building a strong economy. The Green Deal will support thousands of jobs – not just over the next few years, but in the long-term.”Deputy Prime Minister Nick Clegg

24. Conclusions Role for additional regulation within a trigger point based framework?

25. Next Steps for EST • Room in a minute project • Trigger point householder and builder advice • Making best use of unique data and insight