Fuel poverty is not always a cut and dry issue in affordable housing. Whilst fuel poverty has plagued affordable housing almost since its inception, in recent years coordinated strategies have been put in place across nearly every housing provider in order to combat and reduce this problem. Unfortunately, once a strategy is in place it can be difficult to convince an organisation to adapt - especially as more and more research is being done into cause and effect. It is now widely understood that there are three areas which contribute to fuel poverty - income levels, energy pricing and the energy efficiency of a property but not all of these areas were created equal. So let’s take a look at each of these as a potential stock-wide solution.
One of the most obvious causes of fuel poverty is a low-income level. If a resident doesn’t make enough money to effectively heat their homes a ‘simple’ solution is to help them to increase their income. This can come in a number of different forms - it might come from aid in getting government or housing provider grants or subsidies, helping them access additional vocational training to improve their employability or through help with reducing other sources of expenditure, for example, restructuring credit card debt. All of these options are great ways to increase the overall income of residents but they are long-term solutions that will not fix a problem overnight. It also can only be done once. Once a resident has received all of the help above and is still not in the economic position to pay their heating bills consistently you do not have any other ways of improving their income. As a result, this method should always be undertaken in conjunction with other methods to increase overall efficiency. Whilst most housing providers are likely already engaging with this method at scale, it is not the so-called ‘silver bullet’ when it comes to combatting fuel poverty.
Subsidise energy bills
Another way to directly impact your resident’s ability to pay for heating is to subsidise their energy bills. This can be hugely effective as it not only begins working immediately but also allows you to negotiate better deals with energy companies for better rates on your resident’s behalf. The downside of this is that you are now directly responsible for keeping your residents out of fuel poverty and in some cases, residents become reliant on this subsidy in order to keep their financial lives running smoothly. It also can have the unintended side effect of increasing energy usage as when a person feels they are not responsible for some, or sometimes all, of a properties energy bill they are less likely to engage in energy-saving methods. This can increase the cost of individual energy subsidies but also directly impact a housing providers greenhouse gas emissions targets as their average energy usage per household increases. As a stock-wide method, the general consensus for this is that it isn’t economically sustainable and also doesn’t directly combat the underlying causes of any individual residents fuel poverty problem - it only masks it.
Improve the energy efficiency of properties
The final and, we think, the most effective form of combatting fuel poverty is through the improvement of a properties energy efficiency. By retrofitting properties with energy efficiency technology you are permanently reducing the energy consumption of a property and therefore reducing the burden of the occupants’ fuel bills. The main benefits of combatting fuel poverty this way are that the cost is a one-off - meaning once the budget has been assigned and spent you no longer have to worry about additional yearly costs. Retrofit can also be conducted to varying degrees which gives you and your organisation flexibility in pricing. If you have the ability to spend £2000 on each property you can deploy the most effective methods for each property and then come back the next year and add additional solutions to those still struggling with fuel poverty. Finally, it is combatting fuel poverty on a property-by-property basis instead of targetting individual families. This ensures that once works have been conducted, the rate of fuel poverty in your stock should be permanently reduced. Switchee, for example, perpetually saves residents upwards of 15% per year on their heating bills and when a resident moves out, the next resident continues to receive that benefit. We think that this method has the most validity when it comes to a stock-wide rollout in order to combat fuel poverty but perhaps, in the end, there is no perfect one-size-fits-all solution to fuel poverty.
Ultimately it’s a combination of all three
In the end, a combination of all three of these techniques is probably required to eliminate fuel poverty from your resident’s lives. The focus for each organisation is likely to be different based on the availability of funds and resources that they can assign to each type but utilising modern energy efficiency technologies like IoT sensors, smart thermostats and HRVs can significantly reduce your organisation’s reliance on subsidising energy bills and improving resident incomes. Combining this with resident-focused programmes for improving employability and reducing debt as well as some subsidising of energy bills in particularly desperate cases can ultimately end fuel poverty in affordable housing.