Major New Report Reveals How Cleantech Homes Could Slash Energy Bills By 40%

A new report published in July by the Sustainable Markets Initiative highlights the vital role that electrified cleantech homes can play in reducing energy bills for customers, cutting carbon emissions, and boosting property value. 

The Sustainable Markets Initiative was launched by His Majesty King Charles III in 2020 at the World Economic Forum to bring together top organisations from industry and financial services with governments to reshape the future of housing and accelerate a sustainable and prosperous future. The report provides the new government and developers with a blueprint for building more affordable, sustainable homes and was produced as part of the Sustainable Markets Initiative Cleantech Homes Lighthouse Project, which involves leading UK businesses committed to net zero. It was written by Baringa Partners, a leading global advisory firm in partnership with Octopus Energy and with contributions from Sustainable Markets Initiative Lighthouse Project members such as Rightmove, Lloyds Banking Group, Bellway, Hill Group, Savills, Peabody, and UK Power Networks. The report provides the new government and developers with a blueprint for building more affordable and sustainable homes.

Richard Ellis, Director of Sustainability at Peabody, said: 

“We’re working hard to reduce our carbon footprint and lower bills for residents. We’ve laid out how we plan to become a net zero organisation in our Sustainability Action Plan, highlighting in detail what we’ll do over the next three years, including improving the energy efficiency of our own heat networks.”

The report reveals that the savings on energy bills can effectively offset the extra build costs that come with these high-tech homes. The total cost of ownership savings could potentially reach up to £18,500 over 25 years making cleantech homes an attractive option for anyone who wants to invest in sustainable and cost-effective living solutions. These homes are designed to be highly energy efficient and are not only better for the environment but also offer real financial benefits to homeowners. The report also demonstrates how cleantech homes can see a lift in property value of up to 16%

Charlie Nunn, Group Chief Executive, Lloyds Banking Group, said: 

“As the UK’s leading provider of financial services, we bear significant responsibility in helping to finance the transition to a low carbon economy. Decarbonising our housing stock is critical to achieving this, while also meeting urgent demand for good-quality homes which are energy-efficient and more affordable to run.
We support all parts of the UK housing sector – partnering hundreds of housing associations, financing developers’ sustainability goals, and supporting millions of homeowners and first-time buyers as the UK’s biggest mortgage provider. We want to help facilitate more high-quality, greener homes, for the benefit of people and planet.”

According to the report, using electricity rather than gas to power new homes could cut energy bills by as much as 40% as well as significantly reduce carbon emissions which will help the UK reach its net zero target. 

If you’re wondering exactly what a cleantech home is, it’s a home that has solar panels, batteries, and a heat pump. Cleantech homes are not connected to the gas grid and don’t use any other fossil fuel for heating. Batteries can be used to store the energy generated and manage the demands on the grid. Once the National grid achieves its 100 percent clean energy target which is currently set for 2037, cleantech homes will be net zero.

Greg Jackson, founder of Octopus Energy, said: 

“Homes with heat pumps, solar panels, and batteries can make big bills a thing of the past. Sometimes we can eliminate power bills completely. With the price of all these technologies falling it’s a cost-effective way to cut power bills while also slashing a big chunk of the UK's climate emissions. It’s time to get on with it, which is why we’re calling for bolder action to accelerate the electrification of home heating.” 

With domestic heating being responsible for around 18% of UK carbon emissions building cleantech homes with electric heat pumps rather than gas heating is a crucial step to a sustainable future. 

Another important point made by the report is that removing harmful NOx emissions from gas boilers and cookers can contribute to the improved health of home occupants. Cleantech homes are healthier as they don’t have any of the harmful gas emissions that can increase the likelihood and severity of asthma and other respiratory diseases.

One of the key recommendations in the report is to phase out gas boilers in new builds which is seen to be essential if the UK is to reduce carbon emissions from residential heating. The report argues that transitioning to electric heating solutions such as heat pumps is vital for long-term sustainability. If gas boilers are eliminated, new homes can become more energy-efficient and environmentally friendly, which would be a significant help in meeting the UK’s climate goals. 

Andy Hill OBE, Group Chief Executive, and founder of The Hill Group, said: 

“We are delighted to be working with the SMI task force to create a blueprint to help housebuilders achieve impending net-zero targets. Hill has played a leading role in developing this report, contributing extensive experience-based insights on the transition to air-source heat pumps due to our extensive work in this area.
As a business, we are confident we are ahead of the curve and, from our industry-leading position, we can assist and guide others in creating a cleaner, greener world.”

The report highlights the remarkable progress made by the renewable energy industry over the last two years and shows how much sustainable technologies have been adopted in the housing sector. 18% of new homes, nearly a fifth, now feature heat pumps and more than 11,00 heat pump engineers have been trained which means more heat pumps can be installed and maintained. However, the report calls for further acceleration in investment for cleantech homes if the UK is to meet its ambitious net-zero targets. Contributors to the report are urging accelerated growth and the phasing out of gas boilers in new homes. Interestingly, a consumer study within the report finds that 91% of homeowners with heat pumps are satisfied with them compared to 74% of homeowners with gas boilers. 

Various actions can be taken to accelerate the transition to net zero including phasing out gas boilers, removing green taxes from electricity bills, and supporting retraining for low-carbon technology installation and maintenance. Retraining existing workers and training new entrants to the field will ensure the workforce is big enough to support the transition. This will not only help the UK to meet climate goals but will also create new job opportunities in the green economy.

Green taxes can make electricity more expensive for consumers potentially putting consumers off adopting electric heating solutions. The Sustainable Markets initiative believes that more homeowners would switch to sustainable energy sources if green taxes were removed from utility bills as it is hoped that electric heating would be more competitive with traditional gas heating. 

Several pledges have been made by contributors to the report to show their support for bolder action to be taken. These pledges include the Hill Group which has committed to installing its final boiler this year, Rightmove which has said it will increase the volume of green content on its site and promote heat pumps in property listings, and UK Power Networks which has said it will ease grid connections for cleantech homes making it easier for homeowners to adopt sustainable energy solutions. 

These pledges made by industry leaders demonstrate a collective effort towards a greener, more sustainable housing sector. 

Johan Svanstrom, Chief Executive Officer, Rightmove, said: 

“Under Rightmove’s GoGreener initiative, we aim to help educate the millions of people who use Rightmove every day about the green home choices they can consider. Our platform reveals a growing interest in sustainable living, with searches for terms like 'solar panels' and 'heat pumps' increasing rapidly, as well as stronger user interaction with EPC information.
We're actively allocating product and content efforts to renters, homeowners, and buyers about the benefits of Cleantech homes, including energy bill savings, improved health, and potential value accretion. We are also externally advocating for incentives across the market to support a faster transition to greener, healthier, and more cost-effective homes nationwide."

Cleantech homes with their advanced technologies and sustainable practices represent a forward-thinking approach to housing that will not only reduce the environmental impact of residential living but also provide long-term economic benefits to homeowners.