The government's decision to consider radically downscaling its ambitions for solid wall insulation via the ECO has significant implications for the UK's energy efficiency policy.

As a result of the proposed changes, around £400 million less will be spent on residential energy efficiency improvements via the ECO every year, equivalent to 30 per cent of the previous total. The proposed cut in support for the technology could see the rate of installations fall by 70 per cent compared to the year before the ECO was launched.

Such an abrupt policy U-turn is not the way to support an efficient and sustainable solid wall insulation industry.

Our research looks at a range of funding options for insulation programmes. Depending on the option chosen, a strong solid wall insulation sector could offset the costs of the scheme by 50–100 per cent – and potentially make a return on investment in some cases, for example if health benefits from warmer homes are translated into potential NHS cost savings.

The report also shows that the proposed reduction in support could put at risk around 20,000 existing jobs in the sector.

We believe consumers are looking to politicians for long-term protection from rising energy prices. A greater focus on supporting energy efficiency, rather than on cutting ambition to grab short-term savings, is the only way to achieve this and simultaneously to reduce carbon pollution in line with the UK's legal obligations. And when the wider benefits of investing in energy efficiency are taken into account, the argument in favour of strong support for energy efficiency measures becomes even stronger.