Making green alternatives cheaper for consumers is needed to stay on track for Net Zero, reveals PwC survey of 4,000 consumers

• High upfront costs are cited as the biggest barrier, as average earners are half as likely to consider switching to an EV or installing a heat pump than top earners.
  
• There is a generational split in consumer behaviour, with those aged 65+ being least likely to make changes, with many citing a lack of trust in green technology. 
• Consumers want the Government to make greener alternatives cheaper (42%), rather than making polluting alternatives more expensive (23%).
• Voters remain concerned about the environment showing support for the Government to provide financial assistance to companies in order to level the playing field with the subsidies offered by the USA’s Inflation Reduction Act (43% for greater Government assistance compared to 28% against).  

New PwC research of 4,000 UK consumers shows that, while the UK needs to increase its rate of decarbonisation by 50% to stay on track to meet Net Zero targets, cost barriers to green technology are the main challenge to reaching this goal. 

Only a minority of consumers are considering switching to a green alternative in the coming years. 19% of drivers on average incomes (£28k-£34k) are considering swapping to an EV and only 10% of homeowners on average incomes are considering swapping their gas boilers for a heat pump.

Government intervention is popular 

The UK needs to increase its current rate of decarbonisation by 50% to meet interim targets to Net Zero by 2050. According to new analysis this month from PwC, the UK is on track to miss the target for 2030. With cost being the main barrier for upgrading to green technology, by nearly a 2-to-1 margin, UK voters say they want the Government to make green alternatives cheaper, rather than penalise polluting choices.  

• 42% of UK adults would prefer using taxpayer funds to reduce costs, compared to only 23% who would support raising the cost of products with high emissions.

• 43% support taxpayer funds to level the playing field even if the UK cannot match the scale of subsidies provided in the USA’s Inflation Reduction Act.

• Among key swing voters, who supported the Conservatives in 2019 but now back Labour - 54% are supportive. 

• A large majority of rural voters believe discounts on energy bills would help build greater local support for new onshore wind. 71% of rural voters are supportive of new onshore wind within 3-miles of their home, but this falls to 56% for new pylons needed to upgrade the grid.

• Over half (56%) of UK adults would support the Government using taxpayer money to fund EV battery production in the UK.

The public prefers companies to pay for their own green improvements, rather than the taxpayer. More than half (52%) would rather pay increased prices for the goods and services from these businesses, than for public funds to be used, if that was to mean less money would be available for public services.

Heat pumps

The Government’s pathway to Net Zero envisages 250,000 heat pumps to be installed in existing homes each year by 2025, however, only 40,000 were installed into existing homes in the UK.(1)  The findings show one in nine (12%) of all homeowners are likely to consider switching from a gas boiler to a heat pump in the next few years. Additionally, only a small number (3%) have recently made the switch. 

• Of average earners, only 10% are likely to consider switching; half the rate of the highest earners.

• Of those aged 65+, only 6% are likely to consider switching.

The high upfront cost of heat pumps and a lack of trust in green technology are cited as the biggest barrier. Reducing the cost of heat pumps will be a crucial step – but so too will be building consumer confidence and engaging older consumers, who are less willing to major changes or pay higher upfront costs despite longer term household bill savings.

Electric vehicles

Only one in five (20%) of the country is likely to consider switching from a petrol or diesel car to an electric vehicle in the coming years, with nearly half (49%) citing cost as the single biggest barrier. Additionally, 21% worry about the extent of charging infrastructure. 

One in five (19%) adults on average incomes are considering switching, almost half the rate of the highest earners, and generationally only 10% of over-65s are looking to switch.

Laura Hinton, Tax Leader, at PwC, said:

“Over the past twelve months, many in the UK are seeing cost of living pressures impacting on their monthly outgoings. This added pressure to finances means many will see the high cost of entry to green technology, such as buying an EV or upgrading home energy efficiency, as a step too far for them currently, despite the potential long-term cost savings. 

“The Government has said consumers need to want to jump into going electric, rather than being pushed, but our research highlights a clear appetite for a certain level of financial incentivisation to spur on people making the leap. The public has a clear preference for carrots over sticks as a means to spark this transition. However, while there is notable support for the use of taxpayer funds to do this, it is not universal, and the Government may have to find other levers in addition to encourage behavioural change.

“It’s a reminder that while tax and incentives have an important role to play in solving societal problems, ensuring public support for measures is far from straightforward.”

-Ends-

Notes to editors

Fieldwork conducted by Yonder, 18th to 22nd August, with a UK representative sample of 4,001.

[1] UK Climate Change Committee Progress Report June 2023 (p145)