Report warns of potential Green Deal carbon blackhole

 

‘Green Deal’ will work for social housing but more needs to be done to fill carbon blackhole, report warns

 

• £1.2M national retrofitting project – FutureFit -demonstrates Green Deal can work for social housing
• But 26% carbon blackhole will still need to be saved by 2050 – even after all combined potential savings.
• Study also shows minimum funding gap of £130m across housing association’s 56,000 homes.
• Education and engagement essential - just 4.8% of 800 residents approached accepted invitation for free energy improvements works initially.

Affinity Sutton has warned that carbon savings under the Government’s proposed green deal will be much lower than expected – leaving a 26% carbon blackhole.

New research by Affinity Sutton, which has more than 56,000 homes across the country, indicates a ‘low’ £6.5K package (which is indicative of the Green Deal) achieved only an 18% reduction in carbon emissions - and even with all other potential savings taken into account there is still 26% carbon to be saved by 2050.

The study also indicated that the social housing provider could face a multi-million pound funding gap if it was to implement the Government’s proposed Green Deal.  A minimum £130M shortfall would apply if even a ‘low’ £6,500 package of energy efficiency works were applied across its 45,000 general needs homes within its 56,000 property portfolio.

The findings are part of FutureFit, a two year £1.2 M national retrofitting project, which investigated what energy savings could be, achieved trialling a low (£6.5K) medium (£10k) and high (£25k) package of energy efficiency works across 102 homes around the country.  Property selection was based on 22 common archetypes, representing Affinity Sutton’s housing stock and broadly 75% of the wider housing sector - providing a real insight into how the Green Deal might work in reality for the social housing sector and beyond.

• Initial findings suggest that there is a funding gap of approximately £3,000 per property between the net cost of carrying out the works and the value of energy savings. 
• This gap could be filled but would require a significant proportion of Energy Company Obligation (ECO) funding along with packages designed purely to meet the ‘golden rule’ that the cost of the repayments should not exceed the savings on the energy bills.
• A ‘low’ £6.5K package (which is indicative of the Green Deal) achieved only an 18% reduction in carbon emissions - and even with all other potential savings taken into account there is still 26% carbon to be saved by 2050.
• Resident engagement will be vital to the success of the Green Deal and require sustained and intensive awareness campaigns.  FutureFit’s offer of free works resulted in only a 4.8% initial response rate and 23% dropout from sign-up stage to completion of works.
• Training is required to address a lack of technical skills as a result of a sector dumbed down by the previous decade’s focus on the Government’s Decent Homes Standard.

The FutureFit report was published at St Paul’s Pavillion, Royal Festival Hall, Friday 2 September, 9am to 11.30am.  A follow-up report will also be released in summer 2012 demonstrating the actual energy savings achieved for the investment and the impact of lifestyle advice on energy use in the home, both when delivered independently and in conjunction with retrofit.                      

David Orr, Chief Executive of the National Housing Federation, said:  “FutureFit has indentified a significant funding gap which can only be fully resolved if our sector works closely with the government to deliver a strategic approach to improving the energy efficiency and carbon performance of social housing.

“The Government will also need to invest in promoting and marketing the benefit of the Green Deal.  The FutureFit experience has shown that many residents are simply not interested in the retrofit agenda or having works undertaken to their homes – even when they are free.  The answer to this must be a strategic approach which promotes warmer homes at a lower cost.”

Keith Exford, Chief Executive of Affinity Sutton, said:  “We believe that the Government’s Green Deal proposals can work but there are some significant obstacles, identified by our FutureFit project, which must be overcome before the initiative has any chance of success.  FutureFit shows that while the proposed Green Deal will work; in the social housing sector it is likely to deliver only limited carbon savings, falling far short of the commitments made by the UK government.  It would be a mistake to see the challenge of retrofit as a technical one – this report shows that it’s more about people than technology: the skills we will need to deliver it, convincing our residents to have the works done to their homes and helping them change their behaviours to live in an energy efficient manner.”