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Why our flagship programme is failing to fly high

ImageGermany has committed over £1bn to upgrading the energy efficiency of its housing stock every year. The UK mus ensure that the more modest Energy Efficiency Commitment at least delivers what it promises

More fuel is burnt in homes than in any other part of the economy. Which is why, in every developed nation, governments are anxious to reduce unnecessary consumption. The motivations may differ in priority: minimising energy imports; reducing greenhouse gas emissions; releasing money saved for spending elsewhere in the economy.

But everywhere, efforts are being made to cajole householders to cut back on fuel profligacy. Mostly this takes the form of tax breaks. In France, for years, householders have been able to offset money spent on energy saving devices against taxation. The new German government has switched in favour of dishing out more immediate grants to encourage such investments.

Berlin has a systematic 20-yearprogramme, intended to bring every pre-1978 home up to contemporary standards. Five per cent of existing homes are upgraded each year. To achieve this, the German government has quadrupled the relevant budget. So that each year, there is around 1,400 billion euros (about £1.1 bn) available.

In contrast, the Low Carbon Buildings Programme (LCBP) is the UK-equivalent. Its budget for homes is rather different And distinctly more modest. It is just £30 million. Over three years. In other words, rather less than 1% of the budget of the German programme, designed to achieve precisely the same objective.

Now, granted, the UK has opted for the Energy Efficiency Commitment as its “flagship”. programme. This makes the private sector fund such improvements, currently projected to be costing the six energy companies £230m a year. It has the serious design fault of being so organised as to motivate the companies to eschew undertaking whole house improvements, in favour of concentrating heavily on the single measure most heavily rewarded by the regulator OFGEM. In the first phase it was compact fluorescent lightbulbs; now it is cavity wall insulation.

Already almost half UK households have benefited from the EEC scheme. But sadly, few have had more than one energy saving measure installed. Even fewer homes could now be truly described as energy efficient.

So what about the LCBP? Designed, as its name implies, to take a whole-house approach. It is funded by the DTI. Because it has responsibility for energy supply, not energy demand management, the grants are exclusively for funding measures designed to produce electricity within the home.

The grant maxima go as high as £15,000 per home for photovoltaics on the roof. Partly because of the size of such grants in comparison with the total budget, it is not surprising to learn that there has already been a high level of demand for them.

The conditions of grant can in consequence be made pretty strict. The relevant technology must be installed within 6 months (although there may be some leeway with more major capital works, like micro-hydro or micro-wind). Failure to comply with the timescale would invalidate the grant.

Possibly because the agency overseeing the Programme is the Energy Saving Trust, founded by government to cut energy wastage in homes, one further critical condition has been included. It is a condition of receipt of such grants that the basic range of residential energy efficient equipment must already be installed BEFORE any such grant is given. These are: 270 mm of loft insulation, cavity wall insulation (if appropriate), thermostatic radiator valves and at least three CFLs .

The justification is obvious. If this is the government’s main funded programme to improve the carbon performance of homes, it makes sense to ensure that the most basic cost-effective savings are being installed. As well as those which at present can take decades to show a return on capital.

To ensure that grant beneficiaries are not fibbing, a random check (around 2% of installations) will be made. Non-compliance will permit the government’s agents to reclaim any or all of the grant monies repaid.

Obviously there will be standard reminders sent to all grant beneficiaries, regarding their obligations to install the various energy saving measures. If they can get help to do so under the Energy Efficiency Commitment, all well and good. If not, then it is obviously up to individual householders to pay for the measures themselves.

The record of checking compliance with energy saving requirements in Britain is notorious. Hence the furore about the widespread failures with hitting even the minimum standards for the building regulations. There must be no such half-heartedness with the LCBP.

If uniquely in Western Europe our government has opted to fund only the less cost-effective – if more glamorous – of the carbon saving measures, it must use the leverage such grants provide to ensure that every beneficiary also installs the more basic measures too.

I realise that we are dealing with less than 10,000 homes in total. As opposed to the 2 million German homes being upgraded each year. But let us at any rate get these few right.

 

 

 

 

 

 

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