I sure could use a program like this as I face $300 gas bills the last few months. I really want a tankless solar water heater but given the state of the economy, I'm not sure I could afford it. Pay As You Save scheme, new energy efficiency standards and legal obligations for power companies intended to slash domestic emissions
James Murray, BusinessGreen 02 Mar 2010 The government today set out its vision for reducing carbon emissions from the UK's homes, unveiling wide-ranging plans designed to accelerate the rollout of energy efficiency measures, improve householders access to green loans and subsidies and provide a major boost to the emerging green home improvement sector.
The 52-page Warm Homes, Greener Homes strategy sets a series of energy efficiency targets, including commitments to cut carbon emissions from UK homes by 29 per cent by 2020, primarily through the rollout of up to seven million "eco upgrades".
It also outlines a wide range of new proposals designed to ensure the targets are met and replace existing domestic energy efficiency schemes when they expire in 2012.
Central to the new strategy is a proposed change to legislation that would allow banks and energy companies to provide green loans that are secured against the building rather than the individual taking out the loan.
Adoption of loans for green home improvements is not without its problems. Making monthly repayments low enough to ensure they do not negate energy bill savings would spread it over such a long period that the recipient is likely to have moved house before the loan is paid off.
The Pay As You Save (PAYS) scheme – which was first announced last year and has been trialed by around 500 homes in Birmingham, Sunderland, Stroud and the London borough of Sutton – would tackle the problem by attaching the loan to the building. As a result, the original recipient would be able to move house knowing the loan would be passed on to the next resident, who will similarly be able to make repayments using the money saved through reduced energy bills.
The government said it would further support the scheme by working with the Royal Institution of Chartered Surveyors to help ensure that the energy performance of a home is better reflected in its market value.
"The Warm Homes, Greener Homes Strategy will remove the deterrent of upfront costs and reduce the hassle of the move to greener living," said energy and climate change secretary Ed Miliband. "Making homes more energy efficient will help protect people from upward pressure on bills, tackle climate change, and make us less reliant on imported energy."
The flagship financing scheme will be launched alongside a new one-stop-shop green home advice line and a new legal obligation for energy companies to replace the existing Carbon Emissions Reduction Target (CERT).
Under the new obligation, energy companies will from 2013 be legally required to consult with local authorities and ensure that their energy efficiency plans are in line with those proposed by councils. The move is intended to help accelerate the rollout of insulation and other energy efficiency measures, by allowing councils to organise a street-by-street makeover that can improve the efficiency of whole streets at a time.
Energy firms will also have to provide funding to help meet binding targets that require them to ensure their customers save a fixed amount of carbon. The strategy warns that "penalties for failing to comply will be strong – for example, fines of up to 10 per cent of global turnover".
In addition to stimulating green home investment and financing, the government said the new strategy would aim to force landlords to undertake energy efficiency improvements. As part of the proposals, a new "Warm Homes" standard will impose minimum energy efficiency standards for all social housing, while the government said it would also launch a consultation on whether to introduce new energy efficiency standards for privately rented properties.
John Healey, housing minister, said that social housing would take a "centre stage" position in the government's efforts to cut emissions from housing, adding that an additional £2.5m would be made available to provide a network of Green Show Homes across England that will be open to the public.
The proposals are set to provide a major boost for the building and onsite renewables industry, with the government predicting that its plans will create up to 65,000 new jobs in the green homes industry. They also come just weeks ahead of the launch of the government's feed-in tariff scheme for onsite renewables, which will provide any household or business installing approved low-carbon technologies a fixed income for the energy they generate.
Paul King, chief executive of the UK Green Building Council, welcomed the new strategy, predicting that the Pay As You Save scheme could have an even more pronounced impact on job creation.
"The biggest barrier to low carbon refurbishment – the upfront cost – is set to fall," he said. "Pay As You Save is a radical scheme, which could trigger a revolution in household refurbishment – creating at least 100,000 new jobs, saving money and conserving energy."
His comments were echoed by Scott McLean, marketing director at renewable energy system provider Ownergy, who predicted that the combination of the feed-in tariff and the Pay As You Save scheme could make many green home improvements entirely self financing.
"The tariff income from any eligible renewable energy system should be able to cover all or part of the loan repayments," he said. "This will mean that the property owner will benefit from far cheaper energy under the Feed-In Tariffs or Renewable Heat Incentive schemes, while using the tariff income to make all or most of the loan repayment depending on the loan’s payback period."
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