Homeowners who make their properties more energy efficient should pay less council tax and stamp duty, the UK boss of renewable energy giant Eon has told Ministers.
Michael Lewis has presented proposals for tax cuts linked to energy efficiency as Boris Johnson prepares to unveil his blueprint for Britain’s green energy transition.
He said making homes greener is ‘absolutely critical’ to meeting the UK’s 2050 net zero target, and the Government should make green incentives a major part of property transactions.
Proposals: Making homes greener is ‘absolutely critical’ to meeting the UK’s 2050 net zero target
In talks with Energy Minister Kwasi Kwarteng, Eon – the second biggest domestic energy supplier in Britain – has also suggested giving home buyers access to ‘green loans’ as part of their mortgages. They could spend this money on making their home more energy efficient.
He said the Government should then ‘align the tax system to zero carbon’ by adjusting council tax bands and stamp duty to favour energy-efficient homes. Eon has also suggested cutting VAT on heat pumps and solar panels.
Lewis told The Mail on Sunday: ‘The energy transition has to be focused around the customer. If we don’t make the UK’s housing stock much more energy efficient, we will never deliver zero carbon.
‘There are around 19million UK homes with an energy efficiency rating of D to G. If these were all upgraded to energy efficiency bands A, B or C, you would save roughly 130 Terawatt hours of energy per year.’
Comparing the output to nuclear energy, he added: ‘That’s roughly six Hinkley Points.’
Lewis hopes his policies will be incorporated in the Prime Minister’s ten-point green energy plan – which could be unveiled as soon as this week – and a delayed Energy White Paper that should outline specific policy proposals.
He welcomed the Government’s £3billion green homes grant, which gives households access to up to £10,000 for work such as loft insulation, but said it is ‘nowhere near enough’ compared to the estimated £50billion to £75billion investment needed to reach net zero.
Lewis said Eon aims to switch all its customers to smart meters by 2025 and lead the electrification of homes by installing heat pumps and hydrogen-ready boilers.
‘We need to get off gas, and that means we need to install something like 633,000 heat pumps a year if we’re going to get to zero carbon. At the moment, we’re on 27,800.’
Eon also wants the ban on the sale of internal combustion engines brought forward to 2030.