Fuel poverty remains a significant global and UK challenge, with millions of households struggling to afford basic energy needs. To date, government attempts to alleviate this have often focused on improving household income and the ability to pay bills. These policies are not tackling the problem at its root, nor helping these households to reap the rewards of an increasing abundance of clean power. Installing low-carbon technologies, such as solar PV and batteries, in fuel-poor households can provide a long-term solution by reducing energy costs and carbon emissions, and enhancing energy security.

Despite the potential benefits, there is little research in this space - holding back evidence-based policy-making. Empirical data on the effectiveness of low-carbon technologies in alleviating fuel poverty is limited, due to low penetration rates by low-income households. Existing studies on the adoption of solar panels primarily focus on electricity consumption at the import or export level, but results are inconsistent: some papers estimate a net reduction in consumption imported from the grid, while others differ on the extent to which the reduction is dampened by a rebound effect (Qiu et al, 2019; Beppler et al, 2023; Kattenberg et al, 2022; Oliver et al, 2024). This analysis aims to bridge that gap by evaluating the impact of solar PV and battery installations on vulnerable households through real-world evidence.

Our analysis leveraged data from a programme designed to support those who are living in or at risk of fuel poverty by providing free solar panels and home batteries. Octopus Energy’s Warm Home Discount delivery team contacted 3,000 eligible customers last year, resulting in 166 completed installations. This provided a valuable opportunity to compare smart meter readings between households with and without the new technologies.

Key findings from the analysis include:

1. A significant reduction in electricity consumption from the grid: Households with solar panels saw their weekly electricity consumption from the grid decrease from around 25kWh to just 10kWh, as demonstrated in Figure 1. There are differences between the two groups analysed in terms of initial electricity consumption and spread of average weekly consumption. This suggests that among eligible customers, higher electricity users were more likely to take up the offer. Customers with lower consumption may have been less inclined to do so because their overall needs were already low.

2. Net electricity generation during the summer: During specific months as highlighted in Figure 2, many households generated more electricity from solar PV than they imported from the grid. This was either stored in their home battery or sold to the grid - making ‘grid interactive buildings’ a lived reality for these consumers.

3. Carbon emission reductions: The intervention resulted in estimated CO2 savings of 179.37 kg CO2eq/year per household, totaling 29.77 tonnes of CO2 across the 166 installations.

These results may reflect inherent differences between participant groups, which means they cannot provide a fully accurate picture of the intervention’s impact. To establish causality and provide more robust evidence, we are now conducting a randomised control trial (RCT) with Octopus’s Warm Home Discount delivery team and its solar and battery installation service. This trial will use randomisation to ensure comparability between groups and generate reliable insights.

The RCT will address critical questions including:

• Who opts into the solar PV and battery intervention, considering factors like income levels, geographical location, and household composition?
• What are the precise impacts on electricity consumption, bills, and carbon emissions?
• Are there any rebound effects following the installation of solar panels and batteries?

The results will also enable us to make assessments about wider welfare impacts. This will allow us to create a comprehensive picture of how low-carbon technologies can be deployed most effectively to combat fuel poverty. The insights from this research will allow policy-makers to design optimal LCT subsidy schemes, ensuring the equitable adoption of low-carbon technologies and helping the Government meet its ambitious clean energy targets. Ensuring that vulnerable households benefit from the energy transition is key to ensuring its ongoing political salience - both here in the UK, and around the world.