Why rising energy prices are a wake-up call for sustainable investment

Part of the increase will go towards funding the expansion of the warm home discount scheme, whilst some will go towards matching energy supply with demand, which includes the costs of switching between renewable and fossil fuel energy sources.  

The UK’s previous resistance to transition fully towards clean energy has meant that prices have increased dramatically in the past five years due to volatile wholesale gas prices. Whilst prices now are lower than they were during the peak of the 2022 energy crisis, they are still significantly higher than pre-2021. Recent proposals suggest that removing gas plants from the market would save energy users £5 billion a year. 

Moving away from fossil fuels should now be seen as non-negotiable. Research shows that it’s likely we’ll have used all fossil fuels within 140 years, though some say it could be as little as 50. In order to meet Paris Agreement targets to reduce emissions, renewable energy capacity must be tripled by 2030.  

So how and why should we transition towards green energy and homes?  

Expanding renewables will build a resilient energy system  
 

Creating an onshore, renewable energy system will result in a far more resilient energy market which is less vulnerable to shocks and price increases. Whilst we can see short-term fluctuations in some renewable energy sources, with solar being less effective in certain seasons for example, long-term they are infinitely more stable. Renewables can provide a far more equitable supply of energy than our dwindling supply of fossil fuels, which are closely tied to geopolitical trends and events. 

There’s a growing economic case for renewables and green homes  

 
Aside from significant improvements to energy security, the transition towards low-carbon energy and homes will lead to long-term savings, as well as the creation of employment and turnover in emerging sectors and technologies. Projections estimate that the renewable energy sector could be valued at £41 billion by 2030.  

It’s not only energy systems that need to get greener – homes must also transition to create the greatest impact and make sure that energy is not only sustainable, but that we are using it as efficiently as possible. Energy-efficient homes, either new builds or retrofitted properties, are buildings that have optimum insulation levels, energy-efficient doors and windows, and low-carbon energy systems, such as heat pumps or solar panels. The value of homes with higher EPC ratings is expected to grow and the demand for skilled professionals to deliver these improvements is also increasing. 

We must shift capital towards sustainable energy and efficient homes 
 

Despite making climate pledges, Britain’s biggest banks have consistently channelled more money into fossil fuels than sustainable initiatives, providing £119 billion to fossil fuel companies between 2020-2024. Green companies received less than half this amount. 

A key benefit of renewables is that their fuel cost is zero. However, the installation and operational costs are significant. The government estimates that power companies will spend £40 billion a year over the next five years on renewable projects. 

Similarly, huge investment is needed to bring British homes up to scratch with the environmental credentials. UK homes are some of the least energy-efficient in Europe, with an estimated £250 billion needed to fully decarbonise homes by 2050. Whilst some grants are available to help homeowners with making improvements to their homes, such as the Boiler Upgrade Scheme, more action is needed to make these changes affordable and accessible at scale.

Net zero can mean zero bills  
 

In the future, a combination of renewable energy solutions, green home improvements and energy storage could lead to households with zero bills associated with their energy use. In fact, homes like these are already being developed in the UK – but there’s much work to be done to make this a reality for the majority of people.  

Providing energy security of this kind would undoubtedly improve the lives of many: increasing wellbeing by removing the stresses associated with fluctuating energy prices and reducing the health risks connected to unaffordable bills, such as illnesses and deaths associated with cold or damp homes. Investment into green energy and homes can create a fairer energy system where vulnerable people are protected and families are not sacrificing their comfort, health or income to live in warm, energy abundant homes.  

Fund the green energy transition  

Currently, Triodos finances many independent projects in the sustainable energy sector, all implementing clean energy systems for their communities at different scales. The Solar for Schools Community Benefit Society is an organisation that funds solar installations on schools across the UK, whilst clean energy pioneers, Thrive Renewables, have already made possible 45 wind, solar, hydro, storage, tidal and geothermal projects, including six that are community-owned.