Our response to HMRC’s consultation on reduced rate of VAT for Energy Saving Materials

Written by Jenny Holland on . Posted in Consultation Responses, Perspective, Retrofit Incentives

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ACE has submitted its response to HMRC’s consultation on proposed changes to the reduced rate of VAT for the installation of energy saving materials in compliance with a recent decision by the European Court. In the summer of 2012, ACE took the lead in convening a broad coalition of interested organisations who were concerned about the implications of the Reasoned Opinion sent by the European Commission to the UK Government to the effect that its 5% reduced rate of VAT on energy saving materials went beyond the scope of the 2006 European VAT Directive. Over subsequent years we have led the coalition in:

  • encouraging the UK Government to respond robustly to the Commission in defence of its reduced rate;
  • providing the Government with a detailed report setting out the reasons we believed that the UK’s reduced rate did in fact form part of a social policy;
  • liaising closely with officials both before and after the CJEU judgment, setting out our view that the UK Government should use the vires in both Category 10 and Category 10(a) of Annex III of the VAT Directive to retain as much as possible of the reduced rate.

Notwithstanding a few concerns, we broadly welcome the Government’s proposals.

Installer Power: Releasing the potential for local building trades to get energy improvements into homes

Written by Catrin Maby on . Posted in Guest Blogs, Perspective

Catrin Maby

Catrin Maby OBE is an independent researcher and consultant, and PhD candidate at Cardiff University, with more than 30 years’ experience in delivering energy advice and energy efficiency programmes.

Installer Power: the key to unlocking low carbon retrofit in private housing’ by Catrin Maby and Alice Owen (University of Leeds) was supported by the Sainsbury Family Charitable Trusts Climate Change Collaboration.

It’s time to face up to reality. We need to achieve ‘near zero energy’ levels for all our home by 2050, but what are we actually doing to achieve this?  We have run programmes to increase the deployment of those technologies that fit a short term simplistic view of what is ‘cost-effective’, and Feed in Tariffs to shift the market in microgeneration. This is not enough. The focus is on single technologies, and there is little incentive or even encouragement to achieve really deep energy savings.

Future-proofing our old and inefficient housing stock requires a much fuller mix of measures, and attention to the thermal properties of all parts of the building envelope, as well as heating, lighting, microgeneration……There are many challenges, not least being effective integration of retrofit technologies into existing buildings and building services. With around 65% of UK homes owner-occupied, and another 18% privately rented, one of the biggest potential barriers is to motivate home owners to invest in such improvements, and to put up with the disruption involved.

In recent years much has been made of the potential to create new ‘green jobs’ and money to be made from ‘green technologies’.  With the negative impact of policy changes many of these jobs have vanished, leaving an impression of a boom-bust industry, running in parallel to the world of the mainstream building trades, engaged in general home repairs, maintenance and improvements.  Interestingly this ‘RMI’ market is a substantial area of economic activity (estimated to be worth around £11bn a year in the UK, for private housing alone), largely delivered by micro-enterprise and sole-trader building tradespeople, mainly active at a very local level.

This kind of work offers huge potential for making energy improvements – by including them with other work that home owners want or need, and marginalising the impact of costs and disruption. At the moment we are missing these trigger point opportunities daily, while time slips away…

So how can we make home energy improvements an integral part of the mainstream RMI world? The views of building trades micro-enterprises are rarely heard within policy debates, but as the first point of contact for many home owners who want building work done, they have the potential to influence these customers, and a wealth of knowledge to bring to retrofit.  They could be the frontline in communicating, selling and implementing energy improvements.

In researching ‘Installer Power – the key to unlocking low carbon retrofit in private housing’ (Executive Summary; Full Report), we decided to ask building tradespeople themselves what they thought. The picture that emerged was of an industry which operated largely through informal local networks, getting work through personal recommendation and reputation, and linking up with other trades to deliver projects ranging from small repairs to whole house refurbishment or conversions. Quality is crucial because reputation is everything.

Not all small businesses are planning for growth – but they can be vulnerable. Consumer protection should be matched by small business protection, with better information about payment options and good practice.

The use of Building Regulations to move towards lower carbon and lower energy building is widely understood and accepted.  The development of Building Regulations to ensure this should continue along an established path, in a planned and consistent way, following a clear and well-communicated long term plan, covering both new buildings and retrofit of existing buildings, and specifically aiming to increase the take up of energy improvements within RMI. This will enable building trade companies and specialist installers to plan and invest accordingly in training and equipment.

Both households and builders need a source of accessible, expert and commercially independent advice, including credible energy assessments.  Building Control should be properly resourced and consistent, able to advise as well as enforce, and integrated with Planning to overcome current inconsistencies in approach.

Keeping work local has social, environmental and economic benefits, ticking all the boxes for a sustainable economy. Future policy might be more effective if it were developed to support localised action, building upon the knowledge and skills that exist at local level, and the reality of these business and social networks, rather than attempting to impose top-down structures. Integrating home energy improvements into the mainstream, and building the low carbon approach into every job and everyday thinking offers a longer term solution.

People, places and practice: a case study of the energy implications of migration and domestic laundry practice

Written by Quqing Huang on . Posted in Guest Blogs, Perspective

College students air out their quilts and clothes when the weather finally turns sunny and clear after long days of rain in Jiujiang, East China's Jiangxi province, March 9, 2014

Guest-blogger Quqing Huang recently completed her Environmental Technology MSc (specialising in energy policy) at Imperial College London. ACE Research acted as her external supervisor for her thesis, upon which this piece is based. Quqing is interested in the human-environment relationship, sustainability and clean energy. She currently works as a researcher at SynTao in Beijing, analysing government policies on corporate disclosure, corporate social responsibility and corporate compliance in China.

Britons seem to place a high value on the cleanliness of their linen, as a typical household runs the washing machine 5.5 times per week and uses the dryer for 5 times every week on average1. On a macro level, wet appliances are estimated to consume 1.3 Mtoe in 2014, which is the second largest source of electricity use in the household2. Being an energy-intensive practice, it opens a window for change in terms of demand reduction.

So far, to address domestic energy use, policy and research have focused on ‘behavioural change’. They principally draw on research outcomes from economic and psychological understandings of human behaviour, with an emphasis on individual choices. Therefore, some important aspects of the energy-use activity, such as infrastructure, practical skills, and shared social understandings behind the activity are rarely discussed and poorly understood.

The purpose of the research I conducted for Master’s thesis at Imperial College was to look into the domestic laundry practice via the perspective of social practice theory, identify its components (material, skills and images) and discuss how the interaction between those components may dictate the energy use outcome in the case study of a small group of Chinese immigrants in the UK.

One of the findings of my thesis is that laundry practice varies in different socio-cultural contexts. In the comparison between China and the UK, the difference mainly lies in the technology and the images. For example, in the UK, laundry practice has been highly automated with less seasonal impacts. People here are used to laundering by pressing a few buttons on the washing machine and repeating it on the dryer. In a few hours, the clothes are fresh and clean and ready to be put on again.

College students air out their quilts and clothes when the weather finally turns sunny and clear after long days of rain in Jiujiang, East China's Jiangxi province, March 9, 2014

College students air out their quilts and clothes when the weather finally turns sunny and clear after long days of rain in Jiujiang, East China’s Jiangxi province, March 9, 2014 3

Meanwhile, in China, most families use impeller washing machines. They are semi-automatic compared to the drum machines typical here, and require users to judge whether the clothes have been properly washed (foam-free) at the end of the washing cycle – rather than the machine taking control of it. This also partly reflects why washing by hand is popular among the Chinese, as they distrust the cleansing capability of their machines. Another reason to wash manually is convenience. It is inefficient in terms of time and money to run the washing machine just to wash a few pairs of socks and some t-shirts. Hygiene is also important when it comes to washing underwear. Most survey respondents in my thesis said that the underwear is usually washed separately and manually.

Chinese people are obsessed with getting washed clothes out under the blazing sun, which is pretty much at the same level as the British love of sunbathing. Not surprisingly, it accelerates the drying process. It is also perceived to have a germ-killing effect. Keeping in touch with nature and drying laundry in the open air seem to be driven by sensory needs (as shown in the pictures).

College students air out their quilts and clothes when the weather finally turns sunny and clear after long days of rain in Jiujiang, East China's Jiangxi province, March 9, 2014

Bamboo poles serve to air out clothes in Xiamen in East China’s Fujian Province on November 25, 2009 (photo / IC)

Given pre-existing differences in laundry practice between the two countries, Chinese migrants to the UK have needed to change their original way of laundering in order to adapt to local infrastructure and social norms. This leads to another important finding of the thesis. Which is that migration allows the components of laundry practice – materials, practical skills, images – to change in different dimensions. Thus, the outcome of these components’ dynamic interaction, i.e. the detailed configuration of laundry practice and its energy use, is hard to predict. Take students for example: a busy studying schedule, the effort needed time the use of public laundry facilities right and the relatively expensive service charge together lead to a reduced laundering frequency. At the same time, the lack of space and the necessary gadgets to air-dry clothes contribute to a greater tendency to tumble-dry. Thus, the energy use associated with laundry practice among Chinese students shows a rather mixed picture.

Even so, measures need to be taken in order to direct current laundry practice into more sustainable ones. Space and tools that are essential for air-drying should be made available; and the cleanliness, convenience and comfort aspects of laundry practice should be emphasized more in awareness raising and marketing campaigns.

  1. Zimmerman et al., 2012, Household electricity survey- a study of domestic electrical product usage. Final report issue 4
  2.  DECC, 2015, Energy Consumption in the UK (2015)
  3. Photo by Zhang Haiyan / Asianewsphoto; Chinadaily (2014) Hanging to dry, indoors or outdoors?

Our response to HMT and DECC’s consultation on reforming the business energy efficiency tax landscape

Written by Joanne Wade on . Posted in Articles and Blog, Consultation Responses, Perspective

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ACE has submitted its response to HM Treasury and DECC’s consultation on reforming the business energy efficiency tax landscape. We agree there is scope to simplify the landscape, but stress that in doing so, there is real emphasis on reporting publicly with board approval and ensure that cost-effective energy efficiency recommendations are acted upon.

Our response to Energy & Climate Change Committee’s inquiry into low carbon network infrastructure

Written by Joanne Wade on . Posted in Consultation Responses, Energy Efficiency as Infrastructure, Perspective

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The Energy and Climate Change Committee is investigating what changes are required from today’s electricity infrastructure to build a low carbon, flexible and fair network.

The terms of reference of the Inquiry recognised that for the transition to a low carbon electricity network to occur in a cost-effective way, all elements of our energy infrastructure, including those on the demand side of the meter, will need to be addressed.

We focused on one of the questions defined in the call for evidence: How can we ensure that a low carbon network is designed and operated fairly and in a way that helps to minimise consumer bills?

Read ACE’s submission here.

Our response to the European Commission’s consultation on the Energy Performance of Buildings Directive

Written by Pedro Guertler on . Posted in Articles and Blog, Consultation Responses, Improved Access to Finance, Minimum Standards for Existing Buildings, Perspective, Public Sector Leadership, Retrofit Incentives, Zero Carbon Buildings

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This consultation forms part of the evaluation of the Energy Performance of Buildings Directive. Under the terms of the Directive, the Commission is required to carry out this evaluation by 1 January 2017, with assistance from a Committee of Member States’ representatives. The evaluation should reflect the experience gained and progress made since the adoption of the Directive. If necessary, the Commission should make proposals on the basis of the evaluation.

The evaluation also follows on from the Energy Efficiency Communication of July 2014, which indicated that additional measures to be introduced to improve energy efficiency would need to primarily address the energy efficiency of buildings and products if progress is to be made by 2030. The Energy Performance of Buildings Directive is the main legislative instrument in force at EU level covering the energy efficiency of buildings.

With a primary focus the UK energy efficiency market, our response to the consultation highlights: the uncertainty following the abandonment of the zero carbon trajectory; the missed opportunities with respect to driving higher rates of renovation; the low level of compliance with EPBD’s provisions and the virtual absence of enforcement; the question marks hanging over Display Energy Certificates; the need to make EPC data more widely accessible; and the need to plug skills and capacity shortages in the energy services and energy auditing sectors.

Our response to APPG for the private-rented sector’s inquiry into energy efficiency in private-rented housing

Written by Jenny Holland on . Posted in Consultation Responses, Minimum Standards for Existing Buildings, Perspective, Retrofit Incentives

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The All-Party Parliamentary Group for the private-rented sector launched an inquiry into energy efficiency in private-rented housing. Along with Friends of the Earth and Citizens Advice, ACE led a widely supported civil society campaign in 2010/2011, which led to the 2011 Energy Act placing a duty on the Secretary of State to introduce a minimum energy efficiency standard for private rented housing from April 2018 at the latest. We were also a member of the DECC advisory working group which met throughout 2013 to advise Ministers on the detail of the regulations that would be needed to bring the minimum standard into force.

The group’s inquiry follows the government’s decision not to renew the landlord energy savings allowance in the March budget. This had originally been introduced to encourage landlords to improve the energy efficiency of the properties they let but was dropped because of low take up.

Announcing the inquiry, the group’s chairman, Oliver Colvile, member of parliament for Plymouth Sutton and Devonport said: “With the winter months just around the corner, improving the energy efficiency of rented housing is a crucial issue.

“The group’s inquiry will look to develop new ideas that will support landlords to meet their new target; save tenants money on their bills and help improve standards. I would encourage all those with an interest to submit their suggestions.”

Read ACE’s response to the inquiry.

Time to wake up to the reality

Written by Andrew Warren on . Posted in Guest Blogs, Perspective

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Amazement, shock and concern greeted the news that energy use has declined over the last 50 years. But will the Government finally catch on to the benefits of energy efficiency?

In September, Energy in Buildings & Industry’s Warren Report was headlined “The Silent Revolution in UK Energy Use”. In it, I revealed that over the past fifty years UK GDP wealth has increased by almost threefold while at the same time overall energy consumption across the economy has actually fallen (by about 5 per cent).

The level of interest in this simple juxtaposition of two trends, heading in opposite directions, was astonishing. I have been writing monthly columns on energy for over 30 years but I can honestly report that never before has a single column of mine stimulated quite so much interest.

The reactions have ranged from amazement: “Why didn’t I know this before?” to disbelief “Are you really interpreting these statistics right”? from concern that such revelations may cause complacency “every possible saving measure has been made,” to shock that nobody in public life seems to have recognised what was happening “the Government must surely now treat energy saving as the First Fuel”.

For most people, the reaction was one of great positivity: “Why didn’t I know this before?” The chief executive of one of the largest energy consultancies told me that they would be tweeting and blogging the welcome news everywhere. The head of a large charity promised to send links to the column far and wide as did the secretary of one of the main all party energy groups in parliament.

Correct interpretation?

One of the first challenges: “Are you really interpreting these statistics right”? came from a veteran BBC correspondent. Concentrating on the residential sector, if domestic electricity sales were lower today than in 1997, and home gas consumption had returned to 1984 levels, then doesn’t that simply mean that fuel poverty is on the increase? A leading Oxford University academic raised the same point.

I accept fuel poverty is sadly on the increase. And that some households do deliberately try to eliminate heating, cooking and lighting usage in consequence. But that still affects, thank heavens, a relative minority. And some of these run up high fuel bills, forced instead to reduce other expenditure.

What has revolutionised consumption patterns for heating is a combination of better insulation, better glazing, more efficient boilers. In 1984 only half households had central heating, now practically all do, the majority using super efficient condensing boilers. Despite the Internet and a proliferation of gadgets, even appliance electricity consumption has fallen back during this century. Sales of electricity for domestic lighting are now 25 per cent lower than 30 years ago.

Others, like Geoff Turnley, argue that the reason for lower fuel consumption is not energy efficiency, but the “collapse of major manufacturing and steel production industries”. Not so.

The annual UK Digest of Energy Statistics gives the clear lie to this. Already this century, industrial energy sector final energy consumption has fallen 11.3 per cent, from 35.5 to 24.2m tons of oil equivalent. Of which two-thirds of the reduction can be attributed directly to improvements in energy intensity, rather than reductions in output. Looking back further, iron and steel output, far from collapsing, is at the same level as in 1980. It is simply being produced far more efficiently. And the chemical industry’s overall output has doubled since 1970, but its energy usage has scarcely altered.

A long-standing local government figure expressed concern that, if “every possible saving measure has been made”, some with a goodish energy efficiency record, like the retail sector, may argue there is nothing left to be done. I appreciate that concern: I have heard such arguments used before. I recall when in 2010 I was appointed to the Prime Minister’s taskforce to cut Whitehall energy usage by 10 per cent within the year, some government departments with reasonable track records tried that excuse. They got no truck from us (and particularly not from the P.M!). And, lo and behold, every Department did deliver that target with some ease.

Saving 20 per cent

It has long been a truism that there is invariably an extra 20 per cent of current energy usage that can be saved, just about anywhere.

Finally, a whole swathe of people concluded that, given this evidence, “the Government must surely now treat energy saving as the First Fuel”. Certainly that was the reaction of the head of a key trade association. A former senior civil servant mused as to whether the constant chopping and changing of relevant government policies had meant that consumption was higher than it need be, and whether fear of being seen as being too heavy handed had deterred the introduction of obvious regulatory measures – doubtless like “consequential improvements” for the building sector.

But let the final word go to the only one of my correspondents who I asked to quote by name: Sir Jonathon Porritt, Britain’s best-known environmentalist. He asked me the question: “why is yours just about the only voice making this point? For fifty years, energy efficiency has led the most successful revolution in the entire energy market. Why are our political leaders still so silent about it?”

Perhaps from now on, they won’t be. Only last month the Mail on Sunday headline read: “New power stations? We’ll just use less electricity- Britain’s new energy secretary to outline her plans.”

Our response to Energy & Climate Change Committee’s inquiry into investor confidence in the UK energy sector

Written by Joanne Wade on . Posted in Articles and Blog, Consultation Responses, Energy Efficiency as Infrastructure, Perspective

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The Energy & Climate Change Committee is investigating the factors that contribute to investor confidence in the energy sector and wants to build an understanding of how DECC’s policy making process might impact on investor decisions.

DECC estimates that £110 billion investment is needed in our electricity infrastructure over the next decade. Stakeholders’ concerns that policy uncertainty was weakening the case for investment have led the Committee to prioritise the issue of investor confidence – without it, we hamper our ability to meet climate, energy security and affordability objectives. Energy efficiency and demand reduction is the cheapest contributor to these objectives, and this is what we highlight in our written response to the inquiry.

Our response to Energy & Climate Change Committee’s inquiry into home energy efficiency and demand reduction

Written by Pedro Guertler on . Posted in Articles and Blog, Consultation Responses, Energy Efficiency as Infrastructure, Perspective

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The Energy & Climate Change Committee says that energy efficiency and demand reduction is one of the most cost effective ways to cut carbon emissions, improve energy security and reduce consumer bills. It adds that the Government has announced the end of two key policies – Zero Carbon Homes and the Green Deal – without bringing forward any replacement schemes – and that the Energy Company Obligation is also due to come to an end in March 2017.

The Committee is investigating what lessons can be learnt from these and previous energy efficiency schemes.  The evidence received will feed into its scrutiny of energy efficiency policies over the course of this Parliament.

ACE has submitted its written evidence, highlighting the successes of past programmes, the weaknesses of recent schemes and lessons that can be learned from them, including lessons from the US and elsewhere in Europe.