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Low Carbon Housing?

Today I had an invite to Westminster to:

“Low Carbon Housing: how policy needs to change”

Run by the “Centre on energy innovation and energy demand” and the “Energy saving trust” the aim – discussing and debating how the government’s low carbon targets are to be met when the challenge is so great.

Policy makers, market leaders, academics, councils, RIBA, EST, BSI, BEIS, RTPI, UKGBC, CBI, Energy UK, the Passivhaus Trust and more, all sat in the same room to understand the challenges ahead, work out the way forward to ensure our future buildings are smart and working towards a carbon neutral housing stock.

The morning’s sessions were looking at the government’s Bonfield review / “Each home counts” Report. Need to read this in detail.

Followed by two speakers from Brighton, Alex Hunt of Bright Green Homes discussing some of the projects that Cityzen was part of, the Pioneer Places project, and Dr Mari Martiskainen of Sussex Uni. They covered the lessons learned, and how these can be taken as exemplar projects. Alex’s insights were that local skilled professionals can provide low carbon retrofits and new builds. And the challenges they face. Also when it comes down to it there were instances where the projects couldn’t give away retrofit – some homeowners just don’t want the hassle or want to spend money on the kitchen instead.

Other learning from Dr Martiskainen was how the “intermediaries” involved make / made the project work. For example, a passionate designer or the Eco Open Houses project or the Centre for Alternative Technology. My take home message was that as we know from experience-  people who want to make a difference are the ones that make the difference.

The ‘why’ homeowners engage with retrofit or sustainable new build was touched upon but not really discussed in the research. From all the case studies it stemmed from the clients wants rather than a need.

Over our time in practice we have found that the clients wants in terms of sustainability or energy efficiency have been the drivers and rarely is it a legislative requirement.

 

The problems

The UK government has set down and signed up to energy targets for carbon for 2050 and according the Green Building Council we have 27.8m homes so with 33 years to decarbonise them this mean that 70,202 homes per month  (or 2308 homes per day!) need to be retrofitted, and not just a new boiler and some LED lights but properly deep retrofit of additional insulation, new windows and doors and renewables.

This is not a small task, also from our retrofit experience where we provided homeowners with retrofits to Victorian dwellings, the low to mid interventions we provided were up to £15,000 and these only cut emissions by an average of 40%. So to get to net zero emissions is going to be a greater cost.

If you take £25k as a budget the cost of 2308 homes per day (for 33 years!) is £57,700,000 per day.

  • no UK Government legislation is driving the need for change
  • no coherent policies across the U.K. either at local or regional level

Planners are not policing new buildings post/during construction or pre handover. And the building control officers are often unaware of any carbon reduction targets / commitments required under planning, thus are only judging a building based upon the standard regulation documentation.

There is no will for private building owners to upgrade their existing properties, the solar market only worked due to the feed in tariff.

From experience everyone wants to make a difference until the costs are put in front of them, as most people want the holiday or new kitchen, not the extra 100mm of insulation.

Similarly the developer community are very powerful and are less inclined to provide new builds to net zero carbon standard as they are profit driven. Hence net zero has been edited out of the building regulations.

Also there is no pressure for landlords to upgrade their properties below a minimum standard of compliance, they are also  profit driven.

The EU is potentially dropping the EPC scheme and changing to building passports, which the UK may not adopt as it will be another cost.

The UK building industry currently gets most of its supplies from Europe so the risks are that prices for supplies are going up due to the weak pound and may be affected by any UK trade agreements.

(We shut down our old brickworks and steelworks due to their emissions, and cheaper labour in other countries)

What is the incentive to do any retrofit works or to do a new build which is carbon neutral?

None really! Building regulations are a prescribed minimum standard, in London some councils are still using the code for sustainable homes method, which has now been discontinued. Some have sustainability checklists, but it’s mainly down to the individual planning officer to write it in the planning decision, but even then if it’s not deemed as  economically feasible a developer can argue it out of the scheme.

The government has changed policies around renewables, the Green Deal, ECO, Code for Sustainable Homes and legislation, which has in turn has not provided stability within the Low carbon building sector

Throughout the country developers are faced with differing criteria for what could be the same scheme, thus if they were trying to replicate a scheme additional costs would be incurred and different design criteria would have to be met.

SME ‘s previously incurred costs to become accredited under green deal, code for sustainable homes etc,  all of which are now by the wayside or in minimal use as again the policies are changing under  the new government, which has been the norm for the last decade as government and ministers keep changing.

The government needs to realise that buildings and developments can take years of planning and stability in the sector will only come from cross party long term agreement.

 So what’s the answer?

Well no magic bullets are available, and I don’t see how 2308 homes are going to be retrofitted per day until 2050! (Obviously not every home is suitable for retrofitting also.)

A mixture of SMEs and large companies are going to have to do the work but the bigger question is how do you get Mr & Mrs Smith to do the work? Spending £25,000 to retrofit their house is not something that they wish to do even if it’s proven that it will increase the value of their home, or reduce their energy bills.

Part of it has to be legislation driven top down from government as a long term strategy with national and local policy being standardised across the country, together with joined up processes through planning and into building regulations.

Tougher legistlation is required so when people do works on their properties the legislation requires consequential improvements to the existing building over and above what building regulations require now.

In terms of finances today in the room we were looking at power agreements- by offsetting the cost of future power against the cost of the retrofit today.  This needs to be carefully considered as it seems closely modelled towards the old Green Deal methodology, which had too many middlemen taking a cut and people were  often better off getting a loan from the bank for the works and paying it off themselves,  rather than via the government backed scheme.

We feel there are a number of simpler options to incentivise retrofitting; one is through VAT reduction on retrofit insulation and low carbon technologies,  this could be on a product by product sliding scale – the more effective the technology the more the VAT reduction. This would allow the property owner to potentially increase their budget by 20%.  There is also a good argument that a homeowner with a larger budget would use a VAT registered company which in the long term is much better for the industry and better for the economy. Historically domestic clients will try to go for the cheapest option, which is quite often a non-VAT registered trades.

There should be a simple methodology for ensuring that retrofits are done correctly, with building control officers to be able to define works as a ‘retrofit’ for the VAT  exemption.

A second methodology could be to incentivise retrofit and zero carbon homes by reducing the amount of council tax payment based on the energy consumption or EPC of the building.

We note that  neither of these will meet the required funding stream to make the 2050 target but could start the ball rolling until legislation becomes tougher, government funding can be provided to increase the take-up of retrofit works.

The only other way is the will of people,  2308 buildings a day is a lot of early adopters and intermediaries.

The take home message was positive that there are still passionate people wanting Government to take this seriously, but less positive in terms of the challenge facing the U.K.

 

John Smith MCIAT

 

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