So Which Households Can Benefit from Energy Efficiency and is there an Argument to Fund from the Public Purse? Research Briefing 04

Improving household energy efficiency has a positive impact on a more efficient household’s income. This is because money saved by the permanent reduction in energy bills will be available to spend year on year. An EPSRC funded team at the Centre for Energy Policy and Fraser of Allander Institute at the University of Strathclyde has analysed the macroeconomic expansion likely to follow successful energy efficiency measures. This highlights the multiple dividends of energy savings, boosted GDP, employment and income benefits which result from energy efficiency measures. This latest work begins to explore the impact of focusing policy only on fuel poor households but finds that the more wide-ranging the boost to energy efficiency, the greater the economic expansion is likely to be. The multiple dividends are particularly obvious in the case where all households rather than just fuel poor households are targeted. This is due to both the greater stimulus and limited spending power of low income households. Governments should consider the wider economic and social benefits of spending on energy efficiency when designing energy efficiency policy, evaluating its outcome and making budget decisions.