Can Feed-in Tariffs and Renewable Heat Incentives Help Fuel Poverty and Inequality in the UK and, If So, How?

Author:
Organisation:
Imperial College London
Date: 2010
Location:

Rationale

The introduction of national programmes such as the Feed-in Tariff (FIT) and Renewable Heat Incentive (RHI) was aimed at encouraging the installation of domestic microgeneration systems. Their primary aim was to reduce fossil fuel consumption and thus carbon emissions, but they have the potential to have a positive impact on fuel poverty by reducing expenditure and generating income for households. The model generally expects property owners to invest in such systems up front, which poses a potential barrier to their uptake among low-income households, who are often most at risk of fuel poverty. While there has been some research on the interaction of microgeneration and fuel poverty, the social impact of these programmes is largely unknown. An increased knowledge of the barriers and strategies to mitigate them could offer solutions to persistent fuel poverty and inequalities.





Key research Question

Whether such programmes can be accessed by households in low-income areas and, if so, how such access might be managed and optimised in a way that benefits those experiencing the greatest inequalities. By investigating this, can the social impact of these programmes be identified?



Summary of activity

The research involved a literature review of qualitative research techniques, which was used to develop a systematic theoretical model as a tool for understanding the causal relationship between the renewables programme and social benefit. An overview of literature pertaining to fuel poverty and inequality in the UK was also presented.

Semi-structured interviews were completed with 16 people across two case study areas (Nottingham and the Isle of Wight). In each area, the installation of renewable systems in deprived neighbourhoods was being funded through central government grants. The results were fed into the theoretical framework to test its efficacy, and the model was adjusted where necessary.





Findings

  • The evidence suggested that the theoretical framework was a viable model for investigating the relationship between fuel poverty and the renewables programmes.
  • The case study data indicated that both FITs and the RHI can significantly reduce fuel poverty and inequality where these are targeted at low-income households, but an unregulated model relying on initial capital investment may undermine such efforts by assisting the better-off.
  • Effort was most effective where a local energy organisation (LEO) was involved in coordinating the process, not least because they could compete for funding with private contractors.
  • The success of LEOs may be undermined by issues including the limited availability of sustainable low-interest finance for investing in installation.


Recommendations

  • The programmes need to be designed in such a way as to steer their delivery towards low-income areas. Proposals should include support for the formation of LEOs, the supply of low-interest finance, and ensuring that energy policy includes a core focus on tackling poverty and inequality, which would reorientate FIT/RHI funding towards vulnerable households.
  • Further research is needed to test the conclusions on a larger scale, including longitudinal research into impacts over time.


Other themes



Outputs







Explore

Find out more about our Fuel Poverty themes. Discover our projects and related reports.