Friday, 8 April 2011

Green deal or no deal?

Back in December 2009, Gregory Barker (now Minister of State for Energy and Climate Change) set out the Conservative Party’s ideas for helping us to save energy in our homes :-

The Green Deal: Under the plans, every household will have the right to have home energy efficiency work of up to £6,500. There will be no upfront cost, as the work will be paid for by the much larger savings on energy bills from the improved insulation. This will open up a whole new market in energy efficiency, create tens of thousands of skilled jobs and cut carbon emissions. It will also save families money and make local homes warmer in winter – helping the elderly and ‘fuel poor’ in particular. A typical home could see £30 a month knocked off its final bill. Conservatives believe in incentives to help and reward people to do their bit to help the environment

“The Green Deal of insulating people’s homes for no upfront cost and rewarding people for recycling will not only protect the environment, but also help families and pensioners who are struggling to make ends meet. These practical policies show how if you vote blue, Bexhill and Battle will go green and save money”

This is so easy to say when you are in opposition but not so easy to implement when you are in power, especially when you and your Housing Minister, Grant Shapps, have not got a clue what you are talking about. This empty promise of jam tomorrow for home owners will be about as much use as the sign in my local pub which promises “free beer tomorrow”

As we sit and watch energy costs go through the roof, literally as well as metaphorically, this particular pot of preserve will not be available till late 2012, when we were supposed to be just four years away from zero-carbon new homes. Thanks to intense lobbying from vested interests in the construction and energy industries, not to mention the financial sector, we have absolutely no chance of getting anywhere near our low energy aspirations for homes
If we were to construct or upgrade our houses to the standards we should all be aspiring to, the re-training of the construction industry would take years and the reduction in energy demand from homes would cause chaos in the energy supply industry. As I understand it, under the present proposals for The Green Deal, energy suppliers will offer loans to home owners to install insulation to be paid back from savings made on fuel bills. However, in the small print, this deal will only work if the expected savings are greater than, or equal to, the work being financed. So more expensive measures, such as externally insulating solid walls, will not be included. This will leave us exactly where we have been for years with the only affordable and cost-effective measures being loft and cavity wall insulation, double-glazing and more efficient central heating systems. Everything else, including eco-bling renewables, will still be out of reach for ordinary folk and will remain the preserve of “Grand Designs”

It is probably worth reminding ourselves how we got in this terrible mess in the first place. When I bought my first house with my partner in 1976, I needed a 20% cash deposit and the Building Society would only lend us two and a half times my salary alone. My partner was then still at University but if she had been working, her wage would not have been allowed to increase the size of the loan. This kept mortgage repayments within manageable limits and even though property values were gradually increasing each year, buying and selling homes was not really a way of making money and energy costs were relatively insignificant

Somewhere along the line, as investing in property became increasingly profitable, Building Societies and banks decided they would increase the proportion of salary that they would loan, allow a proportion of a second salary and then decrease the size of deposit required (eventually reaching zero). Egged on by greedy and unscrupulous Estate Agents (and later, the influx of foreign money in the south), property values began to spiral out of control so we arrived at 2006 with the average house costing nearly nine times the average salary

So in the space of thirty years, the financial whizz-kids had managed to move homes out of reach for ordinary folk and leave us with an unsustainable housing market that was always going to end in tears. The supply of cheap energy was coming to an end so some form of correction was inevitable. We managed to sell our house in 2008 and have been renting ever since while watching property values go down. The correction now required to make homes affordable again is probably in the order of 50%, especially for those with an Energy Performance Rating below D, which probably includes around 90% of homes in the UK

This is clearly not going to happen overnight but as the recession bites and unemployment rises, I predict that property values will probably need to reduce by at least 20% over the next twelve months and I am not the only person who holds this view. The situation in the Republic of Ireland will shortly be visited on the UK if this Government do not offer some real financial incentives to stop our construction industry from completely collapsing

The interest on our savings is not keeping pace with inflation and our plans to buy a plot of land on which to build a zero-carbon house are on hold till land values come back down to sensible levels. Thanks to the Government cutbacks, my recent redundancy at 58 from a senior post in a firm of Architects has pretty much put the project beyond my reach now

I am a mature building designer and along with a small group of like-minded enthusiasts, I am trying in vain to convince those involved in constructing or refurbishing buildings that we must achieve standards of insulation and air-tightness way beyond the requirements of our woefully inadequate Building Regulations if we are to have any chance of reducing our total energy consumption by buildings or if the occupants are to have any chance of affording their future energy bills. At present, if you want to build a house in the UK to meet CSH Level 5/6 or the German PassivHaus standards and achieve fuel bills that are less than 10% of those achieved by a house built to current Building Regulations, many of the components and equipment required to meet those stringent standards have to be imported

That is a national disgrace and an indication of how far we are falling behind even third world countries in our commitment to reducing energy use in buildings. Even more disgraceful is the Government's refusal to offer any positive financial incentives to build real low-energy buildings. The Feed-In-Tariff involves sticking some expensive eco-bling on your roof which has been made in China from fairly nasty materials and generally gives extra money to people who don’t really need it. The Renewable Heat Incentive, amongst other things, encourages the use of wood-pellet boilers that produce toxic smoke in the name of producing green energy. This tinkering on the fringes is not going to significantly decrease our energy consumption but the Government seems to be pinning all their hopes on it. We need real low-energy building to become the norm, not the preserve of a handful of hippies and Architects serving up Grand Designs for wealthy clients to park their Porsches outside

I would suggest that we start by removing VAT from all building components and materials that improve the energy performance of a building. Then we can insist that all mortgage lenders must offer a sliding scale of discounts on their interest rates depending on the energy performance rating of the property being purchased or built. The Ecology Building Society already does this but they are the only one at the moment. Finally, we should ramp up the energy conservation requirements in the Building Regulations over the next four years to meet the German PassivHaus standards while removing incentives for eco-bling. Unfortunately, all of this is the opposite of what our Government are currently proposing

Feedback from the recent Ecobuild Exhibition in London suggests that there is presently insufficient demand in the UK for components and equipment that will enable us to build real low-energy buildings so nobody is bothering. So much for Mr Osborne’s pontificating in the recent budget speech about “designed in Britain and made in Britain”. An indication of our collective attitude to real eco-building can be judged by the fact that, when the energy conservation standards were increased in the Building Regulations in October 2010, the number of applications for approval from developers received in September 2010 was over eight times the number for the same month in 2009. That was in the middle of one of the worst recessions in the building industry since I was born, so desperate were the developers to avoid having to build to the new energy conservation standards. They should hang their heads in shame and in my world, they would all be charged double for the energy that their leaky buildings consume. The big problem is that most buildings are not occupied by those who build them and so it is the poor occupant who has to foot the energy bill for the life of the building. How on earth, Messrs Cameron and Clegg are we going to achieve zero-carbon homes by 2016 with the vested interests in the energy and construction industries and the financial sector running the whole show? We need some answers and we need them now

One thing is certainly true; a recession is a sure-fire way of reducing energy consumption

Philip Newbold, Director, new bold design limited

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