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UK house builders

UK house builders are to start planning for what Gordon Brown has told them will be a carbon-free future. It follows his announcement in his pre-Budget report as Chancellor of the Exchequer that "within ten years every new home will be a zero-carbon home".

Critically evaluate what steps would be necessary in order for house builders to create tangible reality from such a statement.

Notes:

Please ensure that your work is fully and correctly referenced (Harvard). As a guideline the submission should be of the order of 3000 words in length.

Introduction:

The definition for a zero carbon home is still to be set for the purposes of the 2016 ambition, but it is broadly understood to be one with zero net emissions of carbon dioxide (CO2) from all energy use in the home. At present, housing currently accounts for around 30% of the UK's total energy use and 27% of all carbon emissions, adding greatly to global warming. The government has consequently highlighted the house building industry as a key sector where carbon reductions can be made. This paper sets out to investigate the feasibility of building zero carbon homes in England by 2016 from a house builder's perspective.

Climate change has established itself as a major issue, which requires an urgent and coordinated global response. As architectural designs move forward and designs get more ambitious, it is becoming more difficult to keep the energy use in the home to a minimum. And as we continue to consume more energy and resources than the world is naturally producing, and the production of degraded energy, wastes and pollution at levels greater than the ecosystem is able to absorb, sustainable design is becoming a key factor within our lives. Sustainable design building practices offer an opportunity to create more environmentally sound and resource efficient buildings.

To help tackle global warming, the UK is putting itself on a path to cut its carbon dioxide emissions by some 60% on 2000 levels by 2050, with real progress by 2020. This commitment will require carbon reductions to be made by all industries including the housing sector. The target of achieving zero carbon homes and the requirement of the higher levels of the Code for Sustainable Homes by 2016 are more ambitious than anywhere else in the world.

Insulation and air-tightness are key factors in the design of zero-carbon homes. Most of Britain's housing stocks at present lose heat through badly insulated walls and roofs as well as through draughty windows. In zero-carbon homes all that changes - walls are heavily insulated, floors and roofs keep heat in, and triple-glazed draught-proofed windows stop warmth flooding out.

Stale air could then be a problem, that is why many will have heat exchangers in the loft through which the warm, stale air from in the house is expelled while fresh air from the outside is drawn in, picking up the heat on the way to avoid wasting it. This means the building can pretty much heat itself from the body warmth of its inhabitants, cutting heating bills virtually to zero. This is all in winter, of course. If the house feels too warm in the summer, you just open the window.

Under the plans, all new homes will have to generate enough energy through devices like wind turbines and solar panels to cancel out their overall emission of greenhouse gases. Renewable energy technologies such as solar panels and wind turbines can mean a house generates more energy than it uses - potentially making it a "carbon negative" house. Homeowners will be paid for any green electricity they feed into the grid by the government's “Clean Energy Cashback Scheme”, which will be discussed further later on.

Currently, only a handful of the 150,000 homes built each year qualify as zero carbon. Some pioneering developments, such as the high profile BedZED housing estate in Sutton, have also run into technical difficulties that have thwarted the original green ambitions of developers. In order for this large scale target to be reached by 2016, many steps will have to be taken by house builders within the immediate future.

Main Body Of Text

"The UK's number one priority has to be energy efficiency to help cut emissions and customer bills. It is essential we that we invest in a massive programme of energy efficiency in our homes and buildings,"

John Alker, spokesman for the UK Green Building Council, (July 2009)

The next generation of housing will have to differ significantly from that of today, in order to achieve zero-carbon homes within the next ten years. And while previous evolutionary changes in housing, such as double glazing, central heating and extra sanitary facilities, have had positive effects on lifestyle for the consumer, the proposals for improving the environmental performance of new homes may not necessarily be perceived in the same way. Some people will undoubtedly choose a home because of its sustainable features, but for others the perceived inconvenience of giving up the luxury of a deep bath or power shower or having to come to grips with with sophisticated new technology may prove demanding.

Paul King, the chief executive of the UK Green Building Council, (Dec 2008):

“As Government was warned in late 2007, the definition of zero-carbon is at present too restrictive. This is not about dumbing down the concept of zero-carbon or the level of our ambition - far from it - it is about recognising that developers should be able to achieve the same level of carbon savings but through more flexible means.”

There is much uncertainty about how much it will cost to build a zero carbon building, but it is generally considered to be more than a standard house. The government's target programme -according to the Department of Communities and Local Government (DCLG), The Callcutt review of housebuilding delivery, HMSO, London (2007) - has challenged the house-building industry to look at how it can make construction methods more efficient by designing and building to high standards for a housing unit construction cost of £60,000. As a result, house builders are under increasing pressure to provide sustainable as well as affordable housing whilst increasing production rates to 240,000 units per year by 2016. In December 2006, the government published the Code for Sustainable Homes (CSH) as a significant driver to achieving zero carbon homes in England. The CSH sets ambitious targets for the house building industry; however, the commercial benefits and costs are still unknown.

The Code uses a star system to rate properties with ‘1' star representing a 10% improvement over Part L of the Building Regulations 2006 and ‘6' stars equating to a zero carbon home. This star rating system was deemed more suitable than the EcoHomes system of ‘Pass' to ‘Excellent' [7]. It is expected that the standards set by the Code will be gradually implemented through changes to the Building Regulations. Consultations are currently ongoing [1], however, the proposals involve incorporating level 3 (25% improvement over part L) in 2010 and level 4 (44% improvement) in 2013 before finally moving to zero carbon homes in 2016.

Zero Carbon Home Components (& Examples/Features)

The greenest energy is that which is not used. The energy and GHG footprint of new buildings can be reduced on average by 40% by using current technologies for energy efficiency - assuming the challenges of integrated whole-building design, construction, and operation can be overcome, made affordable, and effectively transferred to mainstream practitioners. However, energy-efficient and direct-use renewable energy technologies - in the forms of cost-effective materials, components, subsystems, and construction techniques - still have enormous potential for energy savings at lower cost than acquiring supplies from traditional or renewable power sources. At the same time, renewable power and other supply technologies also have enormous advancement potential.

From an architectural perspective, the building design (form) and siting are necessary considerations for net-zero energy, high-performance green buildings. The overall form of the structure, the climate considerations, and its location and orientation to the sun in relation to the immediate environs (including other structures) will all affect the efficiency and effectiveness of the building. Locating a building with convenient access to mass transit or to other efficient modes of transportation may also significantly reduce the indirect energy use over the life of the building. Although building design, location, and siting considerations are important, these factors are generally well understood and require universal implementation rather than significant new R&D.

Envelope Load Reduction

The building envelope is critical for reducing building energy loads. It is the starting point for energy-efficient buildings and the main determinant of the amount of energy required to heat, cool, and ventilate. It can also significantly influence lighting energy needs in areas that are accessible to sunlight. Specifically, it determines how airtight a building is, how much heat is transmitted through thermal bridges (which breach insulation and allow heat to flow in or out), and how much natural light and ventilation can be used.

Homes designed for zero net carbon emissions must include some form of power generation to offset the use of electricity, gas and other utilities. This would typically mean a wind turbine or solar panels. However, the UK Green Building Council, which represents the green building industry, says microgeneration is not practical in the majority of cases.

Government Schemes And Fiscal Incentives

According to the Minister of State in the Consultation on Renewable Electricity Financial Incentives (2009), there will be three main bodies dealing with funding and incentives for renewable energy production in the future:

As mentioned before, renewable technologies in housing give homes the potential to be "carbon negative". Homeowners should be set for significant changes in the way they save and even generate electricity in their houses, once the government's “Clean Energy Cashback Scheme”, launches in April 2010, along with "pay as you save" financing. Both are part of the government's strategy to transform the UK into a low-carbon nation, released in July 2009.

The clean energy cashback is a more user-friendly term for what are called “feed-in tariffs (FIT)”, which other countries have used so successfully to promote small as well as large-scale renewable energy production. They work by financially rewarding owners of wind turbines and solar photovoltaic panels for the clean energy they produce. This will be a major factor towards the feasibility of creating zero carbon homes.

But they were disappointed with the overall level of ambition the government has for small-scale domestic electricity generation - just 2% of the UK's total electricity generation. They were also unhappy with the proposed tariff levels which they say are too low.

Alan Simpson MP, special adviser to Ed Miliband on feed-in tariffs, said: "This needs to be welcomed but as the starting point for a conversation not the end point. There is no way that these tariff levels will drive the sort of energy transformation that this government is looking for."

Simpson and the REA are worried that the returns on investment (ROI) the tariffs offer to private investors - estimated by the government at between 5% and 8% - are too low to spark a renewables revolution.

Germany, which launched its FIT a decade ago, started with much higher, double-digit ROIs to kick-start the industry and has continuously ratcheted them down to around 5-7% now as the industry there has scaled up and driven down costs.

But this is only the range the UK hopes to start at and experts say that at these tariff levels only big, low-cost German suppliers could make money here, while the much smaller, higher cost UK industry could get shut out of the equation from the beginning, meaning fewer jobs would be created in Britain.

The good news is the UK government promises that anyone installing solar panels or wind turbines before the cashback scheme starts in April next year will still be eligible to receive it. The same goes for the renewable heat tariff due in early 2011. Such promises remove uncertainty for the renewables industry.

The other key policy announced is the "pay as you save" scheme - also known as a "green mortgage" - under which householders will be able to borrow up to £10,000 to green their home with insulation, low energy boilers and white goods and double glazing. The green mortgage would then be paid back through energy bills but the cost to the homeowner would be offset by savings from lower energy bills.

The money would take the form of a standing charge attached to the property, rather than its owner, for 25 years.

"The 'Pay As You Save' scheme for homes will allow the upfront cost of energy efficiency measures to be paid for with ongoing savings from reduced energy bills."

According to Sam Coates, the Chief Political Correspondent, from The Times, (November 28, 2008),

“In November 2006 Mr Brown said he would waive stamp duty for new zero-carbon houses, giving buyers savings of about £15,000. This was later extended to flats and maisonettes in 2007 . . .”

To support the move to zero carbon homes, the UK government announced in the 2007 Budget that from October 1st 2007 all new homes meeting the zero carbon standard costing up to GB£ 500,000 would pay no stamp duty, and that zero carbon homes costing in excess of GB£ 500,000 would receive a reduction in their stamp duty bill of GB£ 15,000.

In 2008, low-carbon campaigners such as Chris Goodall had pointed out that Zero-carbon homes are extremely costly to build. Therefore, a better, cheaper alternative, would be needed along with other incentives and grants awarded from government bodies.

The Low Carbon Buildings Programme (LCBP) is the UK Government's GB£ 86m grant programme for microgeneration technologies, launched in April 2006 offering capital grants to successful applicants.

The main objectives are to demonstrate the potential for encouraging both energy-efficiency and microgeneration technologies, such as solar photovoltaics, wind turbines and heat pumps, in a range of buildings, driving down costs in the process, and making the microgeneration market more sustainable. The programme funds single installations in households and large-scale developments in the public and charitable sectors.

Part of the UK's 2006 Microgeneration Strategy, Phase One of the Low Carbon Buildings Programme, which will run until 2010, will fund a range of microgeneration technologies including:

Two streams of grants are available under phase one of the programme:

Under Phase One of the scheme (large scale projects), the Government has established carbon reduction targets that go beyond the building regulations, although by end 2008 it was too early to say what the results were.

Household Stream

SCHRI is mainly in place for Scottish Householders and communities. They provide grants to householders of up to 30% of the costs to a maximum of £4,000. The installer and product must be accredited.

The technologies available for funding are:

Reduced Sales Tax For Energy Saving Materials

By virtue of a policy announced in 2000, a reduced rate of Value Added Tax (VAT) of 5% - the lowest VAT rate allowed under EU agreements - is charged on certain energy saving materials, provided that they are professionally installed in a residential or charitable property (such as non-business or village hall). The reduced rate covers:

Additionally, grant-funded contractor installations of central heating systems and heating appliances; and grant-funded installations of factory-installed hot water tanks, domestic combined heat and power units, and heating systems that use renewable energy also benefit from the reduced rate when installed in sole or main residence of a person over 60 or in receipt of certain benefits.

What Are The Legal Requirements For A Home To Qualify For The Zero-Carbon Label?

The prospect of future legislation should prove to be a major driver in achieving zero carbon homes by 2016.

A study carried out by Sponge Sustainability Network (2007) found that there is a desire amongst the UK public to adopt sustainable lifestyles and this growth in customer demand is likely to encourage housebuilders to adopt more sustainable practices in their future developments [7]. The growing customer demand is being supported by favourable planning policies, such as PPS1 [8]and existing government policies, such as the Energy White Paper, which are aimed at promoting sustainability in the built environment. These policies pave the way for new legislation

The most significant legislative barrier was an unclear definition of 'zero carbon'. Builders were unsure of the requirements, for example, the need to provide onsite renewable energy. Appropriate guidelines would be beneficial. For instance, does renewable energy distributed at a district level by Energy Service Companies (ESCos), rather than onsite, count towards zero carbon status

The government hasn't decided. Gordon Brown and then-communities secretary Ruth Kelly announced in 2006 that all new homes would be "zero-carbon" by 2016, but no standard was set. The government consulted on the standard between December 2008 and March this year, and a final definition of what constitutes a zero-carbon home was expected this July - but that's now been delayed until later this year.

The finished standard will specify what percentages of a home's CO2 savings should come from energy efficiency, renewable energy generation such as solar panels on the building, and what share can come from other savings such as wind farms and community combined heat and power plants.

  1. To support a more holistic approach to reducing carbon emissions from buildings by demonstrating combinations of both energy efficiency measures and microgeneration products in a single development.

  2. To see demonstrated on a wider scale emerging microgeneration technologies (with a focus on building integrated technologies).

  3. To measure trends in costs of microgeneration technologies. It is expected that these costs should reduce over the lifetime of the programme against a 2005 baseline.

  4. To raise awareness by linking demonstration projects to a wider programme of activities including developing skills and communicating the potential of microgeneration to change the attitudes and behaviour of consumers. Larger scale projects will seek to engage the construction industry in project replication by demonstrating the business case for developing low carbon buildings.

Conclusion

It is clear that creating efficient, zero carbon homes will depend on new technology and innovations, many of which are still unproven on a mass-market scale.

the current economic climate could provide the backdrop for a more radical and ambitious implementation programme which

New technologies and products would also significantly help builders achieve the target. Zero carbon homes are not considered possible with today?s technologies and so the supply chain is seen as a major barrier. Sufficient resources are needed for the government and building industry to research and develop appropriate and cost-effective technologies.

Apart from the technologies which need improvement, another barrier could be seen in the fact that the builders themselves may be in some confusion about the codes, legislation and regulations, and how they now relate to each other.

All housebuilders are aware of the Code for Sustainable Homes but there is confusion about the dates when various levels of the Code should be adopted.

There is also confusion about the way in which current building regulations relate to the Code. Only 15% are aware that homes built to current building regulations do not even meet the requirements of Code Level 1 and 65% believe that the homes they are currently building already achieve Code Level 1 or above.

Estimates for the additional build costs involved were mainly in line with government figures, but slightly lower for Code Level 6 where fewer informed responses were provided. Housebuilders strongly believe that the additional costs will need to be financed by reductions in land values and this raises concern that landowners may not be willing to sell land at significantly lower prices. This could lead to shortages in land supply, fewer homes being built and heightened affordability problems.

Builders would prefer the requirements of the Code for Sustainable Homes to be incorporated into building regulations, introduced across the whole market at the same time and enforced by building control rather than by planning departments.

25% of housebuilders have been asked by local authorities to build to higher levels of the Code ahead of the nationally agreed dates.

The consequences of such early adoption of Code levels were identified as: higher build costs, additional build complexity, slower development, shortfalls in land supply and areas where it would not be profitable to build new homes.

There is near-unanimous agreement that homeowners' interests would be better served if all local authorities worked to the same nationally agreed dates.

Brown Pledges To Build 'Zero Carbon' Homes

Announcing the plan in his pre-budget report, Gordon Brown pledged "to ensure that within 10 years every new home will be a zero carbon home." He added: "We will be the first country ever to make this commitment."

In the meantime, he promised a tax break to encourage the development of more environmentally friendly homes.

Home Truths

Climate Change Is A Big Problem For Which Small Schemes Are No Solution

This is, in part, a sorry tale of obtuse officialdom. Housebuilders were always adamant that the Government's definition of zero-carbon homes was too strict. The examplar house requires solar panels, high-performance insulation, triple glazing, a heat recovery system and automatic shutters. Not even David Cameron has most of that: hardly surprising since the stamp duty relief on offer runs out at £15,000.

The weak incentive is the rest of the explanation. This scheme was typical of the government approach in the days before boldness, when the Prime Minister had a view on plastic bags; and £15 million is enough to get a headline but nowhere near enough to change building practice.

The sheer smallness of the measure is thrown into sharp relief since the news broke on the very same day that the Climate Change Act received Royal Assent. The Act is a mixed bag but it does not lack for ambition, even though Britain only contributes 2 per cent of global emissions. It introduces the world's first legally binding emissions target, a carbon budgeting system and tighter corporate mandates.

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