1 GREEN DEAL Saving money by understanding the Energy Agenda Dave Princep BSc LLB MCIEH
2 Energy Efficiency
3 Energy Efficiency What a difference a years makes!
4 Energy Efficiency 2010
5 Energy Efficiency 2011
6 Energy Efficiency Why the Change?
7 Energy Efficiency Benefits for Landlords still include: happier tenants premises warmer & cheaper to heat potential higher rent easier to let lower void rate increase value of property less condensation Less risk of enforcement action
8 Energy Efficiency What has changed recently? Energy Bill Enforcement Private Rented Sector Green Deal
9 What is Driving the Need for Energy Bill?
10 Climate Change
11 Sea Level Rise (International Panel on Climate Change) Actual to 2010 (1990 base level) Predicted to 2100
12 Drivers Climate Change Act Binding target 80% reduction in CO2 by 2050 Interim target 34% by 2020 Green Deal will help reach this target Energy Security Fuel Poverty (Target to eradicate by 2010!!!!) Excess Winter Deaths 25,000 in 2010
13 Coalition Government Approach Aim to be the Greenest Government ever Concern over Climate Change Green Jobs Economic Effect of continuing as is
14 Government s Approach Green Deal & ENFORCEMENT
15 Green Deal Issues Confirmed Issues Uncertain Many Green Deal Issues are yet to be resolved
16 Green Deal energy efficiency improvement works carried out Accredited contractors Approved works recoup costs through energy bill Green Deal plan financial mechanism placing charge on energy meter nota loan result in lower energy bills
17 Green Deal Energy bill payer (Tenant) pays for works Golden Rule charge attached to bill should not exceed expected savings, length of payment period should not exceed lifetime of measures. not a government guarantee, but a guideline for customers
18 Green Deal Before After Fuel Bills Whole House Improvements Fuel Bills
19 Green Deal Before After Fuel Bills Whole House Improvements Repayments Fuel Bills
20 Green Deal Before After Fuel Bills Whole House Improvements Saving Repayments Fuel Bills
21 Green Deal Issues Under Discussion Works No defined list will depend on savings (i.e. Golden Rule) To be guaranteed for duration of Deal Void Periods landlord liable Inform energy provider of tenants & start end dates of tenancy Consents Tenants (Current & Future) Freeholder, mortgage company etc.
22 Green Deal Issues Under Discussion High Quality advice Accreditation Providers & Assessors Accreditation of Installer GRANTS From new Energy Company Obligation (ECO) aimed at: Fuel poor Hard to treat (expensive) premises e.g. Solid Walls, no gas supply
23 Energy Bill Enforcement Announcement made Tuesday 10 May 2011
24 Enforcement Proposals Reasonable Requests April 2016 Will not be able to refuse reasonable requests from tenants (or local authorities acting on behalf of tenants) to improve their property; Prohibition April 2018 Unlawful to rent out a house or business premises which has less than an "E" energy efficiency rating, (~ 682,000 properties 1 in 5 PRS premises)
25 Energy Bill Enforcement Approx 1 in 5 houses unable to be rented Almost all landlords affected by tenants reasonable request
26 Enforcement Why? Condition of PRS English Housing Survey % of stock 3.6 m dwellings 19% of PRS in Fuel Poverty (10% income on fuel) 40% stock pre 1919 Lowest Energy efficiency 80% have central heating (90% all tenures) 18% cavity wall insulation (35% all tenures), 14% 200mm or more of loft insulation (24% all ten) 64% full double glazing (73% all tenures), 19% Lowest Energy efficiency F&G rated (15%)
27 Energy Bill Tenant reasonable Request Request based around Energy Performance Certificate (EPC)
28 Energy Performance Certificate Rainbow chart must be available to prospective tenants New tenants must be provided with EPC 200 fixed notice fine. Last 10 years in PRS EST Home Energy Check Improvements proposed new EPC 30
29 EPC Front Sheet Charts Efficiency & Impact Fuel Costs Standardised 31
30 EPC Front Sheet Charts Efficiency & Impact Fuel Costs Standardised 32
31 EPC Potential Savings
32 EPC Potential Savings Works tenant will be able to request
33 Changes to EPC Requirements Not part of Home Information Pack legislation Quality to be tightened Layout to be amended Must provide 2 page EPC at marketing stage Must provide EPC within 7 days of putting on market (currently 28 days)
34 Are Tenants Concerned with Energy Efficiency?
35 Tenants Findings 86% Concern over rising energy prices 40% Very Concerned 50% Current Accommodation too cold 54% too many drafts 20% asked LL to carry out energy efficiency works.
36 Tenants who have moved due to High Heating Costs
37 Why Tenants Choose Properties
38 Have you asked landlord to carry out energy efficiency improvements? Yes 31%
39 Concern with Energy Efficiency
40 Is There Currently Any Financial Help Available?
41 Financial Help Landlord Energy Saving Allowance (LESA) 1,500 tax allowance Insulation Until 2015 Local Authority Grants Decent Homes sub regional funding (~ 80m in London) Targets (National Indicators) CO2 emissions reductions Very unlikely now
42 Financial Help Warm Front Grants Up to 3,500, ( 6,000 if oil) new installations Vulnerable tenants L/L Permission Relaunched for limited time more restrictive (basically only EPC Band D or below) Carbon Emissions Reduction Targets (CERT+) (To be replaced by ECO in 2012) 2.8 billion from Energy Providers 40% to Priority Group, 5% to hard to treat over 70 s etc.
43 ACT NOW FOR BEST DEALS For many simple works costs will probably be lower now than when Green Deal is launched E.g. Loft insulation, cavity wall insulation Much of available funding will be directed at solid wall insulation and those in fuel poverty (paying more than 10% income on heating)
44 Recent Initiatives EXCELLENT INVESTMENT OPPORTUNITIES Feed in tariffs Renewable Heat incentive
45 Feed in tariffs (FITs) CLEAN ENERGY CASH BACK
46 Feed In Tariffs (FITs) Clean Energy Cash Back "A return better than any bank can provide
47 Clean Energy Cash Back (Feed In Tariffs) Up to 5 mega watts
48 Clean Energy Cash Back (Feed In Tariffs) How the scheme works Paid for Generation set rate paid by energy supplier for each unit (or kwh) of electricity you generate. Same tariff continues for 20 years, or 25 years in the case of solar electricity (PV). Paid Additionally for Export further 3p/kWh for extra exported to electricity grid (i.e. not used on site). Lower Energy Bills occupier (your tenant) will be making savings on their electricity bills
49 Feed In Tariff Rates guaranteed for 25 years Rate current 41.3p per KWh Click to edit the outline text format Second Outline Level Third Outline Level Fourth Outline Level April 2012 reduces to 37.8p. Index linked income Income tax free for homeowners Fifth Outline Level Sixth Outline Level Seventh Outline Can install yourself or Rent a Roof
50 Example (EST) Typical domestic solar electricity system, of 2.7 kwp could earn around: 990 pa Generation Tariff 40 pa Export Tariff 70 pa reduction in current electricity bills. Total saving ~ 1,100 per year.
51 Renewable Heat Incentive
52 Renewable Heat Incentive Announced March 2011 Phase 1 Premium Payment (PP) ( 15m) GRANT Available if install after 15 July 2011 Grants Solar Thermal 300 per unit, GSH 1250 etc Premises well insulated EPC & agree monitoring Phase 2 Oct 2012 If in receipt of PP will receive long term payment (8.5p Solar Thermal)
53 Good Source of Advice
54 EST Website
55 EST Guidance on Improvements Very good guide Domestic energy primer an introduction to energy efficiency in existing homes GPG171
56 EST Website
57 EST Website
58 EST Website
59 Some other EST Guidance Solid Walls (ce17) Cavity Walls (ce16) Renewable Energy
60 ENERGY EFFICIENCY OF DWELLINGS DCLG. Nov 2006
61 Advice Energy Saving Trust Free Home Check HHSRS Direct Gov. Dept Energy & Climate Change (Green Deal) Low carbon building programme
62 THANK YOU
63 Green Deal Is it good for the landlord?
64 Green Deal Is it good for the landlord? Is it good for the tenant?
65 Green Deal Is it good for the landlord? Is it good for the tenant? Is it good for society?