Barny Evans and Julian Elsworth explain what ‘allowable solutions’ are and how social landlords should implement them when building zero carbon homes
The government has finally revealed its definition of a ‘zero carbon home’. It confirmed in May that it would not be possible for all homes to be completely zero carbon, and proposed ‘allowable solutions’ as a way to offset remaining carbon emissions. The Zero Carbon Hub (the not-for-profit body that advises government on defining zero carbon homes) has since announced the framework for these proposed solutions in July, so what are they and how can social landlords use them?
What are allowable solutions?
What exactly will constitute an allowable solution has not been specified; it may be onsite, near site or offsite. Solutions will change as technologies evolve and the lack of definition will encourage innovation. They will include such things as offsite renewable energy, for example wind turbines in another area, improving insulation in nearby homes or investing in a district heating system for the town.
It is expected that solutions local to the development in question will be particularly encouraged. Between 40 per cent and 56 per cent of the total carbon emissions of a scheme can be offset by allowable solutions.
How will they work?
A developer will be responsible for finding an allowable solution provider. There are several ways this may work, but there will be two main options: either a local authority may set up as a solutions provider or they will be provided by a private body. It is hoped that competition between providers will stimulate innovation and lower prices.
The allowable solutions provider will invest in a variety of installations to achieve a verified carbon saving at the design stage. The developer will then pay the provider for the amount of carbon savings they require, say £46 per tonne of CO2 per year.
How will the allowable solutions provider confirm the carbon savings?
There will be an allowable solutions verification and certification scheme which will be responsible for providing certificates of compliance, confirming carbon savings from the proposed solution and holding money until milestones are reached.
At this stage, it has not been confirmed how the calculations will be made, but it is likely that a standardised methodology will be created to allow direct comparison of different solutions.
How will a developer know how much it will cost?
Each home will be modelled with the current software operating at that date. This will identify the remaining carbon emissions and, therefore, the extent of allowable solutions required. The developer will then pay their solutions provider the amount required to offset emissions for 30 years.
The cost of implementing/building the solutions will be covered by the provider - the developer will just pay the agreed fee per kg/CO2 (an assumption of £46 per kg/CO2 per year is currently being used).
The government will set a ceiling price for these solutions and providers will compete to reduce this.
What happens if the allowable solutions provider hasn’t built the solution when the development is finished?
The allowable solutions verification and certification scheme will allow a certificate to be issued before the solution is provided to allow a development to obtain building control approval.
How will they interact with other schemes such as renewable obligation certificates, the feed-in tariff and the renewable heat incentive?
Any installations or developments used as allowable solutions will not qualify for any other subsidy or grant, or go towards any targets for energy companies.
How will allowable solutions affect the occupier?
In simple terms, they won’t. The occupier will have no interaction with, and perhaps even no knowledge of, the solutions relating to their home. However, the differing solutions do raise some interesting questions: will some homeowners be surprised still to have significant energy bills in their ‘zero carbon’ home?
Might the system evolve where there are different classes of zero carbon, with some homes true zero carbon, with a perceived higher value when all renewables or allowable solutions are provided onsite?
How will this affect developers?
Developers will need to consider the financial impacts on their developments. It is important to remember that the allowable solutions payment will be for remaining carbon emissions only and, therefore, it may be more cost-effective to improve the building’s performance to reduce the payment, or even eliminate the need for allowable solutions entirely if all emissions can be reduced onsite. Larger developers may consider the most cost-effective method is to form their own solutions provider.
Barny Evans and Julian Elsworth are consultants at global environmental consultancy WSP Environment & Energy