Thank you, Lord Ravensdale. It is great to hear from you as you conclude your first six months as our SEA President, and I would like to extend my gratitude to you alongside our sponsors Mitsubishi Electric and Ambion heating for making today possible. I’m also grateful to Selvin Brown, Director of Net Zero Buildings: Domestic at the Department for Energy Security and Net Zero, for being here to represent the Minister, Miatta Fahnbulleh, whose diary didn’t permit her to join us.

Over the past year, we have made significant progress in advancing sustainable energy in homes and buildings. We remain dedicated to our core message of a technology-agnostic approach to the contribution building-level measures play in reaching net zero. A special thanks to our policy advisors, Megan Hulme and Alexander Moseley, who have been working tirelessly behind the scenes on behalf of our members.

Last year, we celebrated our 20th anniversary amid a General Election-induced policy slowdown. However, we used this time wisely to research new policies for heat decarbonisation, energy efficiency incentives, and for supporting innovators. Notably, our members working on infra-red heating are collaborating to establish an industry-wide testing regime, a step toward recognition within government schemes.

We welcomed a new President, Lord Ravensdale, who brings a wealth of experience both in business and as an active member of the Lords Environmental and Climate Change Committee.

We have had to navigate a new House of Commons, with more than 50% of seats now held by those elected for the first time last year. The Select Committee system got up and running quickly and we were pleased to welcome Bill Esterson MP, chair of the Energy Security and Net Zero Select Committee recently to a private dinner with our Executive Members. While our relationships with civil servants were already well-established, we’ve quickly got to grips forging relationships with new Ministers and Special Advisers.

We also saw strong market growth, with UK heat pump sales increasing by over 60%, prompting the Government to increase funding for the Boiler Upgrade Scheme. Meanwhile, our local government engagement has expanded, as we strengthened our ties with regional authorities in Greater Manchester, London, Wales, and Scotland.

Falling behind – why there is still work to do?

Despite progress, there is much work to do. The Government considers that around 20% of homes may not be suitable or cost effective for heat pumps, yet alternative heating solutions receive minimal support. Fabric energy efficiency has dropped down the agenda, and only a fraction of necessary insulation measures are being installed.

Government commitments remain inconsistent. Whilst the Government’s manifesto pledge of £13.2bn of funding to upgrade 5m homes is to be welcomed, only £3.4bn of that funding has so far been committed, ECO4 finishes in just over a year’s time, and the Great British Insulation Scheme – originally an SEA policy idea, has under-performed significantly. Insulation installation rates remain far below past levels.

The Climate Change Committee’s underlying assumptions in its 7th carbon budget are that of the 5.1 million unfilled cavity walls, only 16% of these will be addressed by 2040, around 90% of the 8.5 million solid walls remain uninsulated, and the CCC believes current policy will only result in 15,000 being addressed in the next 15 years. Meanwhile, fuel poverty continues to affect 12.7% of UK households, contributing to over 7,000 annual deaths due to cold homes.

The SEA’s 2025/26 focus

So there is a lot to do. We are particularly concerned to address five key areas of policy:

Heat Decarbonisation

• The current approach to retrofit policy is to subsidise a low carbon heat transition, presently with grant schemes, and then effectively shifting that burden of subsidy from Government to the boiler industry.
• Although subsidies are important for market-making in the early years while volumes are low, they are by definition not technology agnostic, and forcing the picking of winners.
• In January we therefore published a proposal for a Carbon Intensity Standard. This proposal provides a structured, technology-agnostic approach to phasing out fossil fuel boilers, ensuring fair competition between heat pumps, biomass, and other heating alternatives. This will gradually replace reliance on subsidies, making the transition more financially sustainable.Smart Energy
• Several electricity suppliers and National Grid are already offering consumer incentives to consume power during cheaper periods or times of grid pressure.
• With electricity suppliers soon set to be exposed to real-time wholesale costs, consumer incentives for flexible energy use will grow. Dynamic pricing models and demand-side response programs could help households save hundreds of pounds annually while easing grid pressure.

Innovation

• We continue to facilitate the Retrofit Innovation Group, a group chaired by the Energy Systems Catapult that includes Government officials from several departments, standards bodies, and regulators, to smooth the path to market for innovators in building-level low carbon technologies.
• This year the SEA Executive has set up an Innovation Working Group to create a policy focus for our innovator members.

Social Housing

• Our Social Housing Working Group brings together our social housing provider members with key parts of their supply chain. The group receives briefings from Westminster and devolved Governments on the progress of the funded schemes and how to access them, as well as updates on progressing the implementation of Awaab’s law.

Fabric Energy Efficiency

• The fifth is fabric energy efficiency incentives and on this occasion, I ask for you to indulge me a little because we have launched a brand-new policy paper today on exactly this subject.
• Today, we launch our Energy Efficiency Incentive, a proposal transitioning from short-term grants to a revenue-based model that rewards in-use performance.
• At its peak, the UK was installing over a million energy efficiency installations per year. Government initiatives meant that an estimated 1.7 million loft, cavity wall, and solid wall insulations were being installed annually.
• However, policy changes introduced in 2013 resulted in a dramatic fall in the installation of loft and cavity wall insulation. This downturn led to the collapse of industry installation rates, including some high-profile business failures, caused supply chains to contract, and damaged investor confidence to a point that has never since been repaired.
• The relative short-term, capital grant-based support model’s inability to provide a horizon of no more than a few years is not as appealing to investors as, say, parallel examples that have been so successful in supporting the solar and offshore wind industries.
• Inspired by the success of feed-in tariffs for solar and offshore wind, our long-term approach would attract sustained investment, revitalise the insulation sector and ensure efficiency measures are effectively implemented.
• It will; Attract private investment into fabric energy efficiency, ensure installations meet high-quality performance standards, reduce consumer bills by providing consistent, predictable returns on energy efficiency upgrades, and align with successful schemes used to drive solar and offshore wind deployment, such as Feed-in Tariffs and Contracts for Difference.
• Finally, on this, to reassure those of you in the electric heating industry, we would not propose such a policy be funded by further levies on electricity bills, rather that it be funded by the exchequer, for which we have the precedent of the Renewable Heat Incentive.
• I’d encourage you to look at this new proposal, and at our Carbon Intensity Standard proposal, launched earlier this year. Both are live on the website, and there is a QR code on the summary paper flyers that are available here this evening.

Conclusion and Acknowledgement of Good Progress

To conclude, the Government IS making good progress. They have committed to Private Rented Sector Minimum Energy Efficiency Standards, increased funding, and are intending to proceed with the Future Homes and Buildings Standard. We understand the Warm Homes Plan, when announced after the Spending Review in the summer, will also address alternate electric heating, levies on electricity bills and other important areas of building-level policy, including non-domestic.

However, more decisive action is needed. The SEA remains committed to shaping policy and ensuring sustainable energy solutions become a national priority.

In 2025, we will expand parliamentary engagement, strengthen industry representation, and collaborate with key stakeholders. We will work towards strengthening our voice within the sector by increasing our member base. We are already delighted to have recently welcomed Herschel infrared into our Executive group. We will engage with chairs and active members of relevant Select Committees, build stronger links with a wider audience, and strengthen our relationships with devolved government.

I will close this speech now by once again thanking my incredible team – our policy advisers Megan and Alex who have been working round the clock with David on this Energy Efficiency Incentive proposal and with Aditya on our Carbon Intensity Standard proposal published in January, as well as our membership and comms team, Michael, Sasha, and Thomas. And of course, Kristina – the glue that holds us all together, and who together with Tawia has made this event happen tonight. I also want to express our gratitude to Sandra Morris, who recently departed after nearly 15 years with us.

We could not do this work effectively without the excellent relationships we have with Ministers and officials. Selvin, please extend our appreciation to your colleagues. Finally, to you—our members—thank you for your continued support. Together, we will continue to develop policies that grow your markets and drive forward the transition to sustainable energy.

Thank you.