A report by the UK Green Building Council has called for incentives including reduced council tax bills or stamp duty to encourage up to 1.5 million home energy retrofits each year and boost the government's Green Deal programme.
The report, Retrofit Incentives: Boosting the take-up of energy efficiency measures in domestic properties, says that such measures would contribute hundreds of millions of pounds to the UK economy each year, as well as reducing emissions from buildings.
The report follows statistics released last month showing the government’s Green Deal aimed at increasing energy efficiency, has received a poor response.
Paul King, chief executive of the UK Green Building Council, said: “There are some tough political choices to be made, not least in using the tax regime to nudge householders into action, but the opportunities for UK Plc are just so great, that this is a nettle which needs to be grasped.”
The report says that a variable stamp duty regime could give home buyers a discount if a property beats a level of energy efficiency, or higher rates for poor performing buildings.
It claimed that such a scheme could deliver between 135,000 and 270,000 additional retrofits per year, annual carbon savings of between 209,000 and 417,000 tonnes of CO₂ and contribute £404 million-£807 million to GDP a year with a near zero annual direct cost to government.
It also said that council tax rates could be varied according to the energy efficiency of a property, which could deliver between 518,000 and 1,481,000 additional retrofits a year.
Another suggestion is to introduce an energy efficiency feed-in-tariff to reward households for installing energy efficiency measures.
Phil Birch, associate director of sustainability at property consultant Sweett Group, which carried out the economic analysis for the report, said: “The results indicate that well designed incentives could effectively stimulate extensive retrofit take-up without creating unreasonable complexity or cost for Government.
“Further work would be needed to translate these proposals into policy, however this analysis provides a robust and encouraging starting point.”