Insulation only provides short-term reduction in household gas consumption

Insulating the lofts and cavity walls of existing UK housing stock only reduces gas consumption for the first year or two, with all energy savings vanishing by the fourth year after a retrofit, according to research from policy experts at the University of Cambridge.

The latest study is the first to track in detail household gas use across England and Wales for at least five years both before and after insulation installation.

Researchers analysed gas consumption patterns of more than 55,000 dwellings over twelve years (2005-2017), and found that cavity wall insulation led to an average 7% drop in gas during the first year. This shrank to 2.7% in the second, and by the fourth year, any energy savings were negligible.   

Loft insulation was half as effective as cavity wall, with an initial fall in gas consumption of around 4% on average, dropping to 1.8% after one year and becoming insignificant by the second year. For households with conservatories*, any gains in energy efficiency disappeared after the first year.  

The findings suggests that when it comes to home insulation there may be a significant 'rebound effect': any savings through energy efficiency get cancelled out by a steady increase in energy use.**

The UK Treasury recently announced some £6 billion in funding to reduce the energy consumption of buildings and industry by 15% over the next eight years, with a major focus on insulation retrofits across the residential sector. 

Researchers behind the study, published in the journal Energy Economics, say it is extremely difficult to identify specific causes of the 'rebound effect' they found, but behaviours such as turning up the heating, opening windows in stuffy rooms or building extensions may all contribute.

They argue that good insulation is vital, but any drive to insulate UK homes should be combined with investment in heat pump installation and campaigns to encourage behaviour change if 2030 targets for energy independence are to be met.   

To capture the overall effect of insulating homes, the researchers accounted for various factors, including the age and size of buildings, the weather and gas prices.

However, they did find that gas price influenced energy use – so the soaring cost of gas may mean greater energy reductions from insulation now than during the study period. The research also found household gas consumption fluctuated less after both loft and cavity wall insulation.     

“The recent spotlight on increasing the energy efficiency in UK buildings is both welcome and long overdue, and there are very real benefits to households from good insulation, not least in terms of health and comfort,” said study co-author Prof Laura Diaz Anadon, Director of the Cambridge Centre for Environment, Energy and Natural Resource Governance.

“However, home insulation alone is not a magic bullet. High gas prices will reduce the rebound effect in the short term, as homeowners have the need to keep costs down at the front of their minds. In the long term, simply funding more of the same insulation roll-out to meet the UK’s carbon reduction and energy security targets may not move the dial as much as is hoped.”

Anadon and her Cambridge co-author Dr Cristina Penasco say that insulating old and draughty housing across the UK is a vital step, but argue that not encouraging homeowners to “fully degasify heating” while going through the disruption of a retrofit is a missed opportunity.

Heat pumps, which extract warmth from outside to heat internal radiators, are highly efficient and negate the need for gas boilers. Recent research suggests the UK lags behind many other European countries on heat pump sales, and the UK Committee on Climate Change has also highlighted the need to speed up heat pump deployment.

“When trying to get middle income households to conduct energy renovations, as the government are currently doing, it makes sense to further encourage heat pump installation at the same time," said Penasco, the study’s first author from Cambridge’s Department of Politics and International Studies.

“This could be through incentives such as more generous and focused grant schemes, as well as obligations for boiler manufacturers and additional investments in skills for installers.”

“We found that energy efficiency retrofits are often combined with home improvements that actually increase consumption, such as extensions.”*** Scotland currently offers grants and interest free loans for heat pumps, while the rest of the UK has reduced VAT in the form of a tax rebate.

Residential housing accounted for almost a third (29.5%) of the UK’s total energy consumption in 2020, according to the International Energy Agency. In the UK, 85% of households use gas as their main heating source. 

The study used data collected by the UK’s Department of Energy and Climate Change, and compared energy use in individual households before and after insulation, as well as comparing households that did have efficiency renovations with those that did not.

Researchers found that, compared to wealthier areas, households in more deprived areas had half the reductions in gas use: an average of 3% during the first and second year after insulation. Neighbourhoods where deprivation was highest had the lowest reduction in gas consumption.

“Households in more deprived areas often have to limit energy use, so any savings created by home insulation can quickly get redirected into keeping a house warmer for longer,” said Penasco

“This is a good outcome if policies are aimed at reducing fuel poverty in low-income households, but will not help with the UK’s emissions reductions targets or reliance on gas.” In fact, when it came to household income, those in the bottom 20% increased gas consumption straight after insulation.  

“National caps on gas prices will not incentivise people to conserve energy,” said Penasco, who argues that energy reduction targets could be set for individual households, and associated with waivers on energy bills in the long run, particularly for low income households.

Added Anadon: “People do not deliberately squander energy savings. There is a need for education to lessen the rebound effect we have documented. Media appearances by ministers to discuss flow temperatures of boilers are positive signs that parts of the government are starting to think about this.”

*Conservatories are one of the most popular home improvements in the UK. Data from 2011 suggests that almost 20% of households in England had some form of conservatory, and 80% of those had some form of heating.

** The 'rebound effect' is a fundamental concept in economics, and was first identified by William Jevons in 1865, when he observed that more efficient steam engines increased rather than reduced coal use, as engines were put into more widespread use.  

*** Previous research suggests that extensions in the UK increase household energy consumption by 16% on average.