TALKING HEADS / HANNAH SWORD


Clean energy and affordability


Clean energy won’t matter if no one can afford to use it. Hannah Sword argues that we need to prioritise affordability, as net zero targets won’t be hit without public support.


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uch of the UK’s net-zero agenda rests on bold promises: cleaner energy, cutting-edge technology,


and climate leadership on the international stage. The key barrier to achieving it is not the readiness of green infrastructure nor the ingenuity of engineers, it is whether organisations and households can afford to participate.


Debt and denial Recent figures from Ofgem highlight the scale of the problem – household energy debt has reached a record £4.15 billion, a sum that almost certainly underestimates the financial strain building beneath the surface. And households are not alone in facing these pressures. Rising energy costs are also spilling over into the budgets of councils, schools, and businesses, many of which find themselves paralysed – not for lack of ambition on climate or efficiency, but because shrinking budgets and depleted reserves leave little room to manoeuvre. For too many, the question is no longer “when will we retrofit?” but “how will we pay the bill?” Whilst there is still a belief that clean energy will, in the long term, prove cheapest, the once-easy optimism that maturing technology and economies of scale would inevitably drive down costs is waning. Energy bills have not returned to pre-crisis levels, driven by factors such as ageing infrastructure, grid reinvestment, regulatory levies, and geopolitical shocks. While forecasts point to relative stability over the next two quarters, costs are likely to stay high by historic standards – and the significant investment needed for the energy transition in the short-to- medium term means households and organisations will continue to feel the pressure. The government cannot be


accused of total inactivity as considerable subsidies, grants, and loan schemes do exist. In practice, however, many are sluggish to disperse, and encumbered by red tape. Across Europe, spending on household energy subsidies reached €646 billion between 2021 and 2023, according to Bruegel, a


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‘events’ in 2023, proving the principle at scale. Nevertheless, many people still find these tariffs confusing. The challenge is therefore to remove barriers to their take-up, by increasing the value people receive for providing flexibility and simplifying access to schemes by allowing suppliers, and others, to innovate around proposition design so everyone can feel the benefits.


The question of who pays, today or


tomorrow, remains critical. For many, loans or capital outlays, however theoretically ‘cheap’, are simply unaffordable. The answer is likely to lie in innovative finance. On-bill financing, successful in parts of America and Europe, spreads the cost over a number of years and attaches it to energy savings. The effect is to make deep retrofit, or equipment upgrades, possible with limited upfront pain and enabling the benefits of low carbon technology to be spread beyond those who are ‘able to pay’.


The mission should be clear: embed affordability in every project, every policy and every pound spent. That is the only way to turn lofty vision into practical, popular and permanent change, so that no one is left behind.


testament to the affordability gap created by decarbonisation’s upfront costs. Few countries have ‘cracked the code’ to effectively channel support to where it is needed most.


Data and digitalisation Data and digitalisation create the ability for us to better target our support to where it is most needed. Widespread deployment of smart meters, now in 33 million UK homes and businesses, generates masses of data that, if harnessed correctly, could reveal exactly where energy is wasted. Focusing upgrades on places where they will have the biggest impact, such as schools with leaky boilers or homes that are unable to meet the cost of the transition, ensures that every pound of public money is used more efficiently, something that is especially important when budgets are tight. Dynamic tariffs and demand side


flexibility, technologies that reward users for shifting electricity use in response to signals, offer large promise. National Grid Electricity System Operator’s (ESO) recent demand-flexibility service paid out £11 million across two peak demand


Prioritising affordability If the UK’s net-zero agenda is to succeed, affordability must be built into policy from the outset, not an afterthought. And without seeing a clear link between clean energy and lower bills, it’s likely we will lose the social licence to deliver the transition at a future election. Achieving this means using data to


better target interventions, ensuring time-of-use flexibility tariffs are both simple and inclusive, and creating finance models that broaden access to low carbon technology beyond the able to pay. We also need to do far more to explain why and when this investment programme will deliver benefits, not just for the climate, but in terms of energy security and lower household bills. Europe leads in climate policy,


with countries like Denmark, Sweden, and Finland making strong commitments and showing progress toward their net-zero targets, demonstrating that a fairer, faster transition is possible, but only by aligning the architecture of net zero with the lived financial reality of millions. The mission should be clear – embed affordability in every project, every policy and every pound spent. That is the only way to turn lofty vision into practical, popular and permanent change, so that no one is left behind. ▄


Hannah Sword Director at BFY Group and BFY Carbon Strategies


EIBI | SEPTEMBER 2025


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