Eco doctor: Green deal
Landlords must communicate the benefits of the green deal to residents if it is to be a success, says Sebastian Junemann
The green deal is coming, and we need to be ready to take advantage of it. Many questions remain about the fine detail of the coalition’s flagship programme to incentivise energy efficiency retrofits and the accompanying energy company obligation subsidy. But one point is clear - this represents a great opportunity for our residents and cannot be ignored.
There is no one-size-fits-all solution to the green deal in social housing - which will involve doing energy efficiency home improvements, paid for by tenants in increments over a number of years. Some housing providers will want to become green deal providers, while others will want to work with third parties. How you engage with the green deal and ECO ultimately depends on your stock, your organisation and, most importantly, your residents.
Peabody is conducting a detailed study to determine how best to bring green deal opportunities to our residents. To better understand where the opportunities exist in our homes we are reviewing our asset data, producing dwelling archetypes and developing packages of green deal and ECO measures that fit with our homes. How does the golden rule - that the cost of works must not exceed the savings - apply to each dwelling archetype? How much of our stock can benefit from the green deal? And what extra subsidy do we need from ECO to make certain measures work?
Once we have answers to these questions we can share these with our residents. Building a clear picture of the value proposition for residents is vital so they can understand what the green deal and ECO mean for them. Similarly, we want to show what solid wall insulation looks like, how long the works will take, and what is in it for them overall.
This last point is of crucial importance. For the first time, energy efficiency improvements like loft insulation that have always been ‘free’, are to be paid for by residents. There is a danger residents will perceive the green deal and ECO as ways for landlords to avoid paying for things that they see as ‘our responsibility’.
With this in mind, we will reassure our residents that Peabody will continue to ensure their homes are well maintained and to cyclically replace assets such as boilers and windows at the end of their life. Our green deal and ECO value propositions must therefore be designed in terms of adding value for residents - they may allow us to give our residents ‘premium’ upgrades to what we can deliver to them as standard, which will justify the extra green deal charge on their electricity bill.
We will be testing with residents later in the year how they perceive different benefits associated with the green deal and ECO. As the golden rule means that energy bills (including the green deal charge) may stay the same, there is little financial incentive to accept the works, beyond dampening the effect of rising energy prices in the medium term. Will residents be inspired by improvements in comfort instead, or must we find a way to build financial savings into the calculations?
As landlords, it is vital that we understand the green deal and ECO from the residents’ perspective and communicate the benefits of the scheme effectively. A successful programme can only be delivered when residents have bought into your approach and they will only buy into a programme which puts their needs at the centre.
Preparations for the green deal will vary from provider to provider. But if you only do one thing to prepare, talk to your residents.