The sustainability race
Green energy installations were meant to be the future but how much will it cost to get there? And will the race to fit photovoltaic panels before the feed-in tariff is cut lead to a bumpy ride? Jess McCabe investigates.
The government started a frantic photovoltaic race when it announced it would give landlords six weeks to install panels before slashing the feed-in tariff so hard many schemes are no longer viable.
Across England, Wales and Scotland providers are speeding to install panels on roofs ahead of the 12 December deadline. Social landlords have a particularly pressing reason to put their feet on the accelerator - social PV schemes, which are classed as ‘aggregated’ installations, are the hardest hit by the FIT reduction which will fall from 43.3 per kilowatt hour generated to just 16.8p/kWh.
Inside Housing’s Green Light campaign is calling for social landlords to be placed on an equal standing with other landlords and homeowners to protect vulnerable tenants from fuel poverty. But it now transpires there may be other long-term costs if the government proceeds to cut the FIT so far and fast across all sectors.
This is based on the experience of professionals who have already seen something of a solar-rush over the past year - UK solar capacity grew six-fold to 220 mega watts from April 2010 to August 2011, according to Pricewaterhouse Coopers, with 95 per cent going on residential roofs. The pace of change has led to concern from some that corners are being cut.
Chris Davis, business development director of microgeneration supplier Dimplex Renewables, says some installers are cramming panels on roofs. A poorly installed PV panel might be more vulnerable to damage, he suggests - for example if the panel isn’t anchored properly. Some panels have been left hanging over the edges of roofs, he adds, making them potentially lethal in high winds.
Mr Davis says he is not aware of any panels flying off buildings - yet. But he adds: ‘It’s going to happen. You’re certainly seeing a lot of poor quality installation going on. The Wild West is rapidly making its way into the solar PV sector.’
In a letter to climate change minister Greg Barker, Matthew Rhodes, managing director of low carbon engineering company Encraft, warns that ‘shameless cowboys have come back into the market offering “sign up to beat the 12 December deadline” offers… they cannot deliver’. He adds that the announcement has only benefited ‘fly-by-night profiteers’.
If workmanship is deteriorating in the dash to install photovoltaic panels what does this mean for social housing providers? Will the road ahead be full of high repairs and maintenance costs as a result of moving too fast? And are other green technologies such as heat pumps subject to similar pressures? Is it going to be a bumpy ride?
John Swinney, strategy director at heating and renewable energy supplier Carillion, is currently reassessing its £300 million private finance-backed social housing PV installation programme, following the announcement of changes to the FIT.
He says social landlords are unlikely to be the culprits if solar panels are badly installed on homes - insisting any problems are more likely in private properties. This is because social landlords will only use reputable contractors even if they are moving quickly on projects, he insists. Installers ‘have reputations that are bigger than skimping on one project’, he adds.
Shoddy installation aside, panels are a good long-term investment because they should withstand rain, hail and strong winds, although PV panels won’t generate electricity if covered in snow - so a succession of harsh winters would reduce their productivity.
Last winter provided the perfect test for many providers.
Vincent Wedlock-Ward, projects officer on the Isle of Wight for 25,000-home Southern Housing Group, says it was the worst winter on the island for 20 years. But its PV panels needed no maintenance as a result of the harsh weather. Mr Wedlock-Ward went to inspect the PV panels on the Spanners Close estate in Chale during the cold spell. ‘Three in four houses have PV panels. The snow was sitting nicely on them. It hasn’t done any damage,’ he says.
Not one housing association or maintenance firm contacted by Inside Housing reported significant or unexpected costs to maintain their panels.
One large and predictable expense is the inverter, which converts the direct current electricity generated by the panels to alternating current, which can be fed into the national grid.
The kit is not cheap; inverters cost between £750 and £2,000, and may need replacing once or twice during the 20-year lifespan of a panel.
So the cascade of solar prompted by the FIT cut will likely set off another wave of inverter replacements around 2020.
Clearing away leaves and bird droppings is usually the biggest hassle and cost but one annual clean usually suffices. This check-up, which involves cleaning the panels with filtered water, costs between £55 and £100 per house.
And it may not be the landlord that needs to worry about upkeep, anyway. If the panels have been installed under a rent-a-roof scheme - in which the installer pays for the panels in return for the FIT - it will be the responsibility of the installation company.
Energy company E.ON had plans to install up to 10,000 panels on council housing, of which it had completed around 1,000 at time of writing; the rest are being reassessed as a result of the government’s cut to the FIT.
If something goes wrong on the few schemes that have already been completed the rent-a-roof firm will take responsibility, confirms Andrew Barrow, a campaign manager at E.ON.
The company will also pay for general upkeep of the panels. However, there are some exceptions, such as ‘if you’ve been kicking footballs on the roof and you’ve damaged it’, he adds.
Heat pumps, however, may cause more maintenance issues for social landlords - partly because they have been installed in smaller numbers.
The heat is on
Installations of air source heat pumps, which typically cost £6,000 to £10,000 according to the Energy Savings Trust, have risen from only 100 sold in 2005, to 9,000 in 2010, states Delta Energy & Environment, which compiles market research on microgeneration for energy firms. More efficient - but more expensive at £9,000 to £17,000 - sales of ground source heat pumps, rose from sales of 650 in 2005 to just under 4,000 in 2008, after which the numbers have remained roughly the same per year.
Delta estimates that 75 per cent of all UK heat pump installations take place in social housing.
The relatively small volume of pumps installed means maintenance engineers may not be familiar with the system. Robin Curtis, a director at heat pump installer Mimer Energy, says: ‘When they turn up and discover it’s a ground source heat pump, their usual reaction is, “I can’t fix it”. Seven out of 10 times, it’s not a heat pump fault, it’s a heating system fault.’
This could mean an additional and unexpected cost to residents who should be able to switch from the heat pump to a back-up electric heater in the event of a breakdown. While expensive, this will keep the home warm until an engineer familiar with heat pumps can come out.
In 2010, a field study of 83 ground source heat pumps by the Energy Saving Trust found that many did not perform well, largely because they were not fitted or designed properly, with long-term implications for performance and maintenance. It led to a toughening up of the Microgeneration Certification Scheme’s installation standards. For example heat pumps must now meet all of a home’s heating, and can’t be undersized. Mimer’s Mr Curtis says: ‘We should be passed the cowboy heat pumps now.’
However, whereas landlords must inspect gas-fired boilers every year by law, there’s no statutory obligation for inspecting heat pumps.
They do not pipe combustible fuel into a home so are relatively safe. However, an explosion in a Mitsubishi air source heat pump in a Yarlington Housing Group property in Chard, Somerset, last year led to 10 models being recalled and replaced with a next generation pump. The explosion was caused when a power receiver component failed.
Mr Davis from Dimplex recommends heat pumps are checked every three to five years. ‘They have circulation pumps that seize, radiators leak, all that stuff happens. The key difference between a heat pump and a boiler is there’s no combustion system. There’s no need religiously to go around and check if a heat pump is OK from a safety point of view. But there are elements of the system that need to be checked periodically.’
The cost of annual servicing of heat pumps can vary widely, warns Alan Dindar, an asset surveyor at 18,000-home housing association Radian, which has 25 ground source pumps and around 200 air source pumps installed in its properties.
The cost variation depends on the different models and installation types. For example, Radian has five different air source heat pump models, ranging from NIBE-manufactured units installed in 2008, which cost £179 for an annual check-up, to Mitsubishi units installed in 2010, which cost £56 to inspect. Servicing a ground source heat pump costs the association £80 plus VAT. The difference in price is caused by the complexity of the system. Prices can also be lower if a number of heat pumps are being serviced in the same area.
This compares to the cost of an annual safety check-up for a gas boiler of £55.
Education of residents is also key. ‘It’s not just to do with the heat pump, installation and commissioning quality, [but also] residents not knowing how to operate them. Heat pumps work better for longer periods of time at lower temperatures,’ notes Paul Ciniglio, sustainability manager at Radian.
Residents primed by conventional energy-saving advice not to leave the heating on unnecessarily may also run into problems. While a conventional boiler runs well in short bursts, a heat pump needs to be left on for long period. Using short bursts will leave the home feeling too cold, and residents may be tempted to use the expensive top-up electric heating.
Tom Pritchard, head of commercial activities at Oakus, a commercial subsidiary of social housing agency Green Square which has about 100 heat pumps in its properties, tells of one resident who ran up a £500 electricity bill this way.
So both heat pumps and photovoltaic panels could cause problems due to the quality of installation or because the technology is new.
In general, however, the journey should be a smooth one. These green energy installations should leave housing providers with few long-term maintenance costs compared with traditional power sources. If residents understand how to use the technology they should also benefit from significant long-term savings on their energy bills.
The imminent cut to the FIT, however, means it is likely to be a long time before most social homes even start out along this road.
Case study: working with ground source heat pumps
Penwith Housing Association has the longest-running experience with ground source heat pumps of any social landlord in England. Back in 1998, PHA, part of Devon & Cornwall Housing group, installed its first four heat pumps in new homes.
‘It has been gradually adding more heat pumps since then,’ says Denys Stephens, sustainability manager at the association. Aside from the first four, all of PHA’s heat pumps are E.ON HeatPlant units, made in the UK by Calorex, with vertical borehole ground loops.
Of the 8,000-plus homes PHA manages across Cornwall, 60 are heated using ground source heat pumps. ‘Well-installed systems don’t need a lot of maintenance. They can work well with a minimum of interference,’ Mr Stephens says.
Heat pumps have proved no more or less expensive to maintain than traditional boilers in PHA properties. ‘There are still occasionally issues with lack of familiarity with the technology but we have access to a specialist contractor that is capable of fixing any malfunction that might arise, so there is not a problem in getting repairs done,’ Mr Stephens says.
‘In our part of the world, when you haven’t got mains gas, it’s very difficult to heat homes. Oil is quite expensive to install and it’s expensive to buy - in these locations ground source heat pumps provide affordable and low carbon heating,’ he adds.
The Green Light campaign has two main aims. It calls for:
- equal access to energy company obligation funding for social landlords
- social landlords’ solar schemes to be classified not as aggregated schemes but as community projects, which the government has said it would consider helping to fully benefit from FIT