Social landlords must ask themselves now how they will access green deal cash and whether energy company obligation funding can help, says Sally Hancox
When it comes to the green deal - the government’s flagship eco-refurbishment scheme - social landlords need to think now about which options are best for their respective organisations.
Through research, experiences and people that I have met during Gentoo’s exploration into the green deal and what it means for us as an organisation, I have concluded that there are three main ways that landlords can make the green deal work. These are:
Allowing customers to access green deal funding through other green deal providers
This approach does create hurdles; if your tenants are going to arrange their own packages of works, how will you keep your asset records up to date? How will you co-ordinate any community plans with your own programmes?
Becoming a green deal provider and using the organisation’s own capital to do this
Social landlords will need to align their investment plans with eligible green deal measures, which is something we are currently doing. Beware of the ‘golden rule’ during this process: meeting this rule means making sure that the measures you are putting in place will not cost more than the savings in fuel bills. These savings will be needed to fund the upfront cost of the works.
Gentoo is piloting this by using pre-planned investment to install measures such as heating and double glazing as well as fitting solar photovoltaic panels to suitable homes. We are then applying small charges to tenants over a period of 15 years which will return 40 to 45 per cent of our original investment, thus giving tenants a buffer of up to 60 per cent to ensure they achieve the necessary savings. The charges therefore protect the ‘golden rule’ for the tenant and we anticipate a return on our investment.
Securing green deal measures with energy company obligation funding
ECO funding will replace the current energy company subsidies community energy saving programme and carbon emissions reduction target funding which is taken from our bills and distributed by energy companies. It is being widely discussed that it will support green deal measures which can’t deliver necessary savings to meet the golden rule. In schemes which are hard to treat or house residents who are unable to heat their homes to a suitable level, ECO may help.
However ECO is structured, we need to make sure that all parties are given the opportunity to access it. The government wishes ECO to address fuel poverty and achieve carbon savings which, in my experience, don’t always gel.
So, how do you enable equal access to ECO? Maybe it could be worthwhile breaking the funding down into two streams: people and property.
The people stream may focus on less significant measures to keep our customers warm. Smaller measures such as windows, doors and showers would be made accessible by local plumbers and joiners; the archetypal ‘man in the white van’. These smaller businesses would need to be able to access funding for internal works in a way that is easy and quick; a bit like printing off a voucher from the internet.
The property focus could then tackle the larger and more intense retrofit processes which would require a larger percentage of funding. Organisations would need to be confident in the proposals that they make and be able to demonstrate the carbon reductions they are proposing to deliver. This could be done in an online bidding arena, for example.
Ultimately, social landlords considering how to retrofit their housing stock need to ask themselves two key questions: do they want to access the green deal funding and how should they do it? With the green deal set to be rolled out in a year’s time, now is the time to be coming up with answers to these questions.
Sally Hancox is director of Gentoo Green, the environmental arm of Gentoo Group