The UK's rental sector is missing out on significant energy-saving opportunities, with research suggesting that renters could save up to £15 billion on energy bills over the next decade if landlords upgrade their properties with solar panels and energy-efficient appliances.
However, a 'split incentive' is cited as the main reason for the lack of motivation among landlords to invest in energy upgrades. This refers to the situation where landlords do not directly benefit from the energy savings, as they are typically passed on to tenants through rent reductions.
The study, conducted by the UKPulse Media, found that the majority of landlords (62%) are not motivated to invest in energy-efficient upgrades due to the perceived lack of financial returns. Meanwhile, 43% of renters reported being willing to pay more rent for energy-efficient homes.
Energy Minister, Rachel Maclean, stated that the government is committed to reducing carbon emissions and improving energy efficiency, particularly in the private rented sector. However, Labour's Shadow Housing Minister, Lucy Powell, criticised the government for not doing enough to address the 'split incentive', saying that 'renters are being left to foot the bill for landlords' lack of investment in energy-efficient upgrades.'
The UK government has introduced various initiatives to encourage energy efficiency in buildings, including the Energy Company Obligation (ECO), which requires energy companies to fund energy-efficient upgrades in low-income households. However, critics argue that these measures are insufficient and that more needs to be done to address the 'split incentive' and encourage landlords to invest in energy upgrades.
The research highlights the need for policy changes to address the 'split incentive' and ensure that landlords are incentivised to invest in energy-efficient upgrades. If successful, this could lead to significant energy savings for renters and a reduction in carbon emissions.