Competent retrofitting policy & inflation resilience: The cheapest energy is that which you don’t use

Dr Chau M. Chu, Dr Tom Haines-Doran, Professor Jamie Morgan

A working version of a paper published in Energy Economics, Vol. 121: 106648, May 2023


  • It is widely acknowledged for responses to inflation and climate emergency that the cheapest energy is that which you don’t use.
  • Carbon emissions from housing stock is a major issue and we explore UK retrofitting policy.
  • Current retrofitting policy depends too much on a market psychology and is in need of a major rethink.


Given that it is widely acknowledged that the cheapest energy is that which you don’t use, we take a tangential approach to issues of energy prices and inflation and focus on energy efficiency policy that reduces demand at source. Our focus is housing retrofitting from an institutional or framework perspective. We briefly set out what retrofitting is (since this is a moving target), and what the need for it is in the UK. We then focus on the Climate Change Committee’s current assessment of policy. This brings to the fore the government’s minimalist approach to ‘developing a market’. We argue that this approach invokes an individualised market psychology which is both conceptually and practically problematic, given the need for urgency and the current situation of inflation and uncertainty. We conclude by suggesting a fundamental rethink is required.

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