Sunday, 31 August 2014

Report questions green deal potential

The green deal energy efficiency scheme is only likely to reduce carbon emissions from social housing by 4 per cent by 2020, a study has found.

The study, produced by sustainable development company Camco for the National Housing Federation, suggests the government could fall short of a target for household emission reductions.

The green deal scheme will fund home energy efficiency improvements, with the money paid back over 25 years through fuel bill savings.

Camco has calculated the maximum carbon reduction that could be achieved across the social housing sector by 2020 is 21 per cent (see box below), but says the realistic outlook is much more restrained, at only 4 per cent.

This is partly because it is only likely that around a quarter of social homes would be included in the scheme by that date, and also assumes 25 per cent of potential fuel bill savings will be used to increase comfort in poorly heated properties.

The Labour government set a target of reducing household emissions by 29 per cent between 2010 and 2020. Improvements in the efficiency of the energy supply network coupled with the green deal could deliver a 15 per cent reduction, leaving the government to find another 14 per cent if it were to apply the target to the social housing sector.

The Camco report fed into the work of a NHF working group on the green deal in social housing, which released its findings last week. This found ‘a substantial part or all of any improvement in energy efficiency is likely to be taken for additional comfort rather than fuel bill savings’.

However it also said there are clear opportunities for the social housing sector to become involved in the green deal, noting housing associations’ experience at delivering home improvements through the decent homes scheme.

The green deal is currently being piloted on social housing in Manchester. Arm’s-length management organisation Salix Homes is trialling the initiative on 2,500 homes, and the eventual aim is to improve all of the 260,000 social homes in the city.

Maximum green deal savings

Camco divided social housing into different categories and worked out the maximum potential emission savings from each group. The expected savings are much lower, for practical reasons.

Low green deal potential

  • Three million homes
  • Account for 22 per cent of overall emission reduction potential for the sector
  • Currently have relatively good levels of energy efficiency
  • Captial investment per property of £250 to £2,000 deliver 25 per cent savings

Medium green deal potential

  • Around 400,000 homes
  • Account for 14 per cent of emission reduction potential
  • Investment per property of £2,500 to £10,000, to deliver savings of between 25 and 50 per cent

High green deal potential

  • Nearly 800,000 homes
  • Account for 64 per cent of overall emission reduction potential
  • Investment of between £5,000 and £17,000 to deliver savings above 50 per cent

Readers' comments (2)

  • Sexton

    what is the green deal for rough sleepers? Double layer cardboard box?

    Is the green mumbo jumbo is the last problem in housing?

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  • Regardless of your position on carbon emissions or any other green issue the cost of energy will become the biggest deal in the next 10 years.

    All social landlords need to be delivering action on improving the energy efficiency of their stock and focussing in on the worst performing homes. It is possible to see energy becoming the biggest cost to residents after rent.

    If we don't improve efficiency residents will be forced to choose between paying rent or service charges and energy bills. Guess which one most people will choose ?

    I wonder what that will do to rental debt levels and RP incomes.

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