An analysis of the effect of Government grants on the uptake of home insulation measures

This paper presents an analysis of historical data on UK Government expenditure for home insulation grants and the effect that this had on the uptake of the insulation measures. The analysis focuses on loft insulation, this being the main measure that has been targeted by grant schemes. The paper shows that variations in loft insulation uptake between 1974 and 1996 were closely tied to changes to grant schemes. Furthermore, there is a clear correlation between the uptake rate achieved and the level of funding provided by the Government. The data also allow quantification of the effect whereby householders who would have installed loft insulation anyway take advantage of the availability of a grant (referred to as the "free-rider" effect). Hot water tank insulation is also considered and shown to follow a similar pattern to loft insulation Potential knock-on effects on other measures are also considered. The findings of the analysis are important because they help to identify the levels of Government funding that might be needed to achieve carbon reduction targets. (C) 1999 Elsevier Science Ltd. All rights reserved.