A fair deal
Is it ethical for tenants to pay for green deal energy-efficiency improvements to landlords’ homes? Two experts go head to head
I think this is a question that landlords should be asking tenants, rather than debating among ourselves.
Before beginning our retrofit journey, Gentoo sought to find out what our tenants thought about the idea of contributing towards the cost of energy efficiency measures, on the understanding that the savings they would make as a result, would be greater than the charges applied.
We surveyed more than 600 tenants as part of a ‘green debate’ and 84 per cent of respondents said they would be willing to pay, on the basis that the savings would be greater than the charges applied. We also found that, generally, people were happy to pay £5 or less per week, but no more.
We then wanted to extend our research sample and ask the same questions of people with alternative levels and sources of income. To do this we surveyed more than 600 of our own employees.
What did we find? A similar proportion of people said they’d be willing to pay. Again, we also found that if the charge was more than £5 per week then generally our staff would be put off making any contribution.
It was on this basis that we launched our energy saving bundle scheme, essentially a large-scale green deal pilot. What’s really interesting is that 84 per cent of our tenants said they would be interested in participating in the scheme in principle. We then had an actual take-up rate of 79 per cent among our tenants, so the proof is in the pudding.
Learning from our approach to identifying the level of demand for paid-for retrofit works, my view is therefore that we should be asking our tenants what they think and not deciding what we should do among ourselves.
Sally Hancox is director of Gentoo Green, the environmental arm of Gentoo Group
At Radian we’re committed to helping tenants reduce their energy costs and to reducing our carbon footprint. The green deal has the attraction of securing private investment in measures to help achieve this, paid for by a charge on household energy bills which is offset against the occupier’s savings on energy costs. This model therefore transfers to tenants the burden of funding energy efficiency measures.
The financial pressure felt by many tenants will ensure a level of interest, confronting social landlords with the questions, should we let tenants take on this cost, or resource these works ourselves? Is it right, moreover, if we pay for energy-efficiency works, for the tenant to jump the queue (in the form of our stock investment priorities)? We are keenly monitoring the green deal’s evolution, to understand how it can best complement our strategy to reduce energy costs.
We’ve found that some of the technologies we’ve used to improve energy efficiency didn’t deliver the benefits we expected - design, installation, poor fit with the needs or lifestyle of the household, or a combination of these being influencing factors. While we have the capacity and skills to overcome such setbacks, an individual householder may not. Tenants who proceed will also commit their successors to paying a surcharge for up to 25 years, long after any benefit which underpinned the original ‘deal’ has ceased to be evident.
So, when those requests for us to approve green deal measures start to arrive, we’ll ensure our tenants act in the knowledge of our asset management plan for their home, and our understanding of the technologies. Where appropriate we’ll undertake the works, so that neither tenant nor property attracts green deal charges.
Lindsay Todd is chief executive of Radian