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Retrofitting UK housing association homes Olivia Powis National Housing Federation

Retrofitting UK housing association homes Olivia Powis National Housing Federation. Pre May 6 2010……. Home Energy Management Strategy ( 2010) NEW WARM HOMES STANDARD for Social Housing? By 2015 all lofts and cavities insulated By 2020 up to 7 million homes ‘whole house’

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Retrofitting UK housing association homes Olivia Powis National Housing Federation

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  1. Retrofitting UK housing association homes Olivia Powis National Housing Federation

  2. Pre May 6 2010……. • Home Energy Management Strategy (2010) • NEW WARM HOMES STANDARD for Social Housing? • By 2015 all lofts and cavities insulated • By 2020 up to 7 million homes ‘whole house’ • Every home have smart meter • All landlords improve fabric of properties • District heating in urban areas • 65,000 jobs: energy efficiency, installing &manufacturing ESM or home energy advice • By 2030 all cost effective measures achieved • By 2050 emissions from buildings as close to zero as possible

  3. … and then: New UK Government May 6 2010 Conservative – Liberal Democrat

  4. In with the new: Conservative Green Deal • Energy efficiency improvements to £6,500 (harder to treat homes) • No upfront cost to householder • Costs (less any grant) repaid over 25 years through savings on energy bills (PAYS) • Pay £10/month to save £30/month on fuel bills) • Eligible Measures: Building fabric or positive payback over 20 years • ‘Standard upgrade (£1500) initial survey • draught proofing • hot water jacket • loft insulation • cavity wall insulation • heating controls • energy efficiency lighting

  5. In with the new: Liberal Democrats Green Deal • Energy companies to simplify tariffs • Charge families less for basic amount of energy used • Introduce fair social tariff for disadvantaged families • Smart meters to all households within 5 years • Insulate all homes to decent standard within 10 years • Raise Building Regs energy efficiency for ALL new homes • ‘Green Loans’ (£10,000-£12,000) for home energy efficiency & micro-renewables

  6. So ..What Stays? • 2008 UK Climate Change Act: • 80% reduction in carbon emissions by 2050 • 5 year carbon budgets (June 2009) • UK share of European target 20% of energy renewable sources by 2020. • Need to develop renewable heat  and decarbonise heating sector….but • Closure of Low Carbon Building Programme and likely RHI (24 May 2010) • Smart meters • PAYS.. Of some description…

  7. But how to pay for it? 6 May 2010 Dear chief secretary, I'm afraid there is no money. Kind regards - and good luck! Liam Byrne Secretary to the Treasury £6bn cuts this year…

  8. Sources of Funding • Pay as You Save • Supplier Obligation (white certificates) • Renewables • ESCos • Rents • Carbon offsetting • Green mortgages/bonds/loans

  9. Pay As You Save (Green Deal) • Federation involved in the UKGBC paper on PAYS in September 2009 • House has Energy Saving Measures carried out • End product is more efficient homes with lower fuel bills • Savings pay back works over 25 years • Low cost finance required • A mechanism to pay-back (rent/service charge not possible) • Need to learn from other countries on rent differentiation • Pilot Schemes • DECC/EST: 4 pilot areas, to reach up to 500 households, £4m, • Gentoo Sunderland £4.50/week ‘Green Charge’

  10. Pay As You Save – Does it work? • Federation commissioned modelling.. • Low cost finance required - none idenitifed • A mechanism to pay-back (rent/service charge not possible) • Need to learn from other countries on rent differentiation • Pilot Schemes • DECC/EST: 4 pilot areas, to reach up to 500 households, £4m, • Gentoo Sunderland £4.50/week ‘Green Charge’

  11. Pay As You Save – Does it work? Assessed a range of measures(£/kg CO2 saved)

  12. Optimal Scenarios: Combined measures (total % of CO2 saved)

  13. Performance is extremely sensitive to % of value shared with participants and % of savings claimed Value shortfall by % of savings claimed and savings shared (£)

  14. Supplier Obligation – White certificates • CERT (Carbon Emissions Reduction Target) • April 2008 – March 2011 (previously EEC) • Target 185m lifetime tonnes of carbon • 40% of carbon saving is priority group: low income & elderly vulnerable households • Increase CERT targets/activities by 20% • Stop suppliers giving away energy efficiency light-bulbs from Jan 2010 • CERT EXTENSION obligation for 21 months to December 2012. • For housing associations: • Identify additional funding to unlock and maximise on CERT delivery • Re-evaluation FUTURE OF CERT

  15. CESP (Community Energy Saving Programme) • New obligation for suppliers and generators • Whole house, community approach • £350m of energy efficiency measures to be installed • 90,000 households in 100 projects • Low income communities • Partnership delivery with Local Authority • Aim to present an ‘offer’ to energy companies • Obtain detailed knowledge of local housing stock, condition and tenure • Help in getting community support and marketing offer • Very slow take up.. Energy companies want up to 60% contribution and to control measures

  16. Renewables • 1 Feed-in tariffs (FiTs) introduced April 2010 • Produce a steady ROI for households to stimulate take-up • Introduction in April 2010 – new rates; PV 41p/KwH • Can be claimed retrospectively • No Biomass – now in RHI • New higher rates..Can ‘gift’ energy to tenants • 2 Renewable Heat Incentive (RHI) April 2011? • Provides financial assistance to generators of renewable heat • Air and ground-source heat pumps, biomass solar thermal and CHP • Funded by a levy on suppliers of fossil fuel on all fuel bills… • Good rates were proposed but… • Closure of Low Carbon Building Programme and likely RHI (24 May 2010)

  17. ESCO (Energy Services Company) • Housing associations supply energy (renewable or conventional and carry out energy saving measures) • Must guarantee competitive energy prices (long-term?) • UK consumers have ‘right to switch’ • Works best in ‘supported housing or communal heating • Does not rely on rental income

  18. Rental Income • Split incentive between Landlord and tenant • UK housing associations rent restructuring regime (changing) • However new pressures on rental income: • Newbuild • Increasing pressure on housing benefit bill – could be cut further • Will all tenants see savings?

  19. European Funding Streams • ERDF: up to 4% allocation worth approx £100m in England • SEEDA released £840,000 (full 4% allocation) (closed) • EEDA released £4m (full 4% allocation open) • Yorkshire Forward £7.5m (closed)up to £40m incl. partnership funding • One North East £6m • North West RDA £27 m (full 4% allocation open) • London £7m yet to be taken up. Setting up London Revolving Fund. • East Midlands Just engaging in talks • Can use JESSICA/JASPER mechanism to recycle funds • European Investment Bank (EIB) • Powerhouse Europe • Federation led European initiative on spreading good practice on retrofitting through out Europe.

  20. Standards • Warm Homes Standard • SAP and RdSAP • Eco Homes XB • Code for Sustainable Homes • CLG Select Committee Decent Homes response • No compulsory standard without funding

  21. Behaviour Change • Federation possible European bid… • Oak Foundation – funding to employ officer • Linked to financial savings on fuel bills • Employing specific workers to explain to tenants • How to use equipment • Savings to be made

  22. Further Information: • Olivia Powis : oliviap@housing.org.uk • Tel: 0207 067 1083 • Corine Meier: Corinem@housing.org.uk • Tel: 0207 067 1034 • Andrew Burke: Andrewb@housing.org.uk • Tel: 0207 067 1198

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