The UK must produce 15% of its total energy demand from renewable sources by 2020 under EU wide energy targets - in 2005 it managed only 1.3%.
The House of Lords European Union Committee on Friday claimed that wholesale changes were needed in the Government's approach to energy policy if the target was to be met.
A statement by the Committee said it was concerned that the Government has not included energy efficiency as a central part of the Renewable Energy Strategy.
It points out that witnesses speaking to the Committee estimated that around a fifth of the 15% reduction target could be achieved by 'aggressive demand reduction policies'.
Energy efficiency measures, therefore, should form the starting point for the Government to meet its 2020 targets. The Committee calls on the Government to set a 20% energy reduction target by 2020.
The Committee's report also points out that 41% of the UK's energy use is for heating and cooling. The Committee stresses that renewable heat technologies and micro-electricity generation should be as important a part of meeting the UK's renewables target as large-scale electricity generation.
It calls on the Government to increase existing micro-generation grants and to introduce a system of renewable heat grants to ensure individuals have an economic incentive to explore options for micro-energy generation at home.