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There are about 24million homes in the United Kingdom.Of these 21.8million are in England, 1 comprising 29%terraces, 27% semi detached, 17%detached, 9%bungalows, 3%converted flats and 14%purpose-builtflats (DCLG, 2007).
DCLG, 2007. English house condition survey 2005 annual report. Department of Communities and Local Government, London, June 2007.
UK government's commitment to cut greenhouse gas emissions by 80% on 1990 levels by 2050 made it the only country around the world to have a legally binding framework after taking forward the Kyoto Protocol (The Climate Change Act, 2008). Although, for reaching this target there is a need for drastic measures to be taken which will ensure reduction of carbon emissions from various sectors.
The construction industry influences almost 47% of total CO2 emissions of the UK where as for the buildings that are in use and it can influence over 80%, of total CO2 emissions (BIS 2010). This is the reason why the government has made sure that there is a requirement that all new build housing have to meet zero-carbon standards by 2016. Even though this is encouraging, research shows that 80% of the housing stock standing in 2050 has already been built (Green Futures, 2008).
Households are responsible for 27 percent of carbon emissions of which roughly half comes from space heating, 20 percent from water heating, and 25 percent from cooking, lighting, and appliances (Monk et al. 2010). Various factors affect the carbon emissions from households, which depend on the nature, quantity, and quality of the existing housing stock and, the amount of improvement possible.
Refurbishment of existing house or 'Home retrofitting' is a process of adding or upgrading elements of the house in order to improve its energy and water efficiency, indoor quality, conditioning, make it more comfortable, healthy and eco-friendly. Due to its role in reducing carbon emissions, retrofitting of homes has become an important mechanism and a way to reach the 2050 carbon emission targets.
There are also other health and social benefits of retrofitting like helping residents fight health problems such as allergies, asthma by removing mould growth in cold and damp houses, which is a trigger for respiratory disorders (Manfredo and Leardini 2011), improved self-rated heat and reduced day-off school and work (Howden-Chapman and Carroll 2004).
In order to encourage the process of retrofitting, the government introduced Green Deal, a Pay As You Save (PAYS) financial model, which is expected to start from the autumn of 2012, which will allow installation of retrofitting measures, like insulation, heating at no upfront cost. The expected savings made in the fuel bills through these measures are to be used to pay back the loan amount. (DECC, 2010)
There are various retrofitting measures, each of which have their own costs and amount the save annually. Depending on the various types of household in question, the impact and the importance of each retrofitting measure would be different. Thus there is a need to examine the retrofitting measure, with respect to the type of dwelling and understand the impact to find out which are the measures that are most affordable and offer the shortest pay-back time. There is also a need for the complete standardisation of retrofitting process looking at the most affordable retrofitting measures, the behavioural and other aspects that need to be adopted in order to achieve maximum savings.
The research will look at the findings from existing literature and case studies on retrofitting and lessons learnt from previous projects. The next step will be interviewing existing practitioners, homeowners, Architects, professionals from Housing associations and try to understand their take on these issues. The researcher will also analyse case studies of projects which have already been retrofitting, looking at the amount of money spent, measures taken and the returns after the retrofitting. The researcher will then analyse the findings in order to find the conclusions for the research question.
Literature Review: 4000
Currently the 24 million homes in UK are responsible for 27% of current CO2 emissions with each home producing an average of 6.1 Tones of CO2 per year (Lomas 2009). In 2050, existing comes will represent 65-70% of the housing stock (Lowe 2007). Of all the existing housing stock nearly three quarters are in private ownership, which makes the task of retrofitting even more difficult. Various stakeholders like local and regional authorities, housing associations, energy and technology companies, and mortgage providers, communities and individual homeowners need to be dealt with in order to get the retrofitting done (Green Futures, 2008).
Currently UK households and businesses are estimated to waste £3 billion per year on energy (DECC 2010) and a good retrofit job should deliver 35-50% of energy savings (Holmes 2011)
The key targets for the UK government:
Kyoto Protocol - 12.5% of 1990 level by 2012
Climate Change Act 2008- 80% below 1990 level b 2050
Eradicate fuel poverty across England, in vulnerable houses by 2010 and all household by 2016.
Schemes to improve energy efficiency in UK:
CERT in April 2008: Energy supplying company obligation
CESP in September 2009: Energy company supplier's energy efficiency in low-income groups.
Warm Front Scheme, England, Home energy efficiency in Whales and Energy Assistance Package in Scotland: Grants for enabling certain households in fuel poverty to install energy efficiency improvements.
CRC Energy efficiency scheme: CO2 emission trading scheme for large public/private sector organizations in UK.
Laine (2011) says that for meeting the 2050 carbon emission targets, every home will need to have:
Insulation -wall, loft, floor, doors, hot water tank, hot water pipe work
Low flow water fittings
draught proofed windows and doors
triple glazed windows
oil/gas boilers upgraded to 86% efficient boilers
heat recovery on homes built 2007-2010
low energy light bulbs and appliances
solar thermal PV or 75% homes
Ground source heating
Connection for flats to CHP
In such a case, there is a necessity for a mechanism to ensure that these homes get retrofitted in such a way that the necessary targets are achieved.
Green Deal mechanism
The Green Deal aims to revolutionize the energy efficiency of British properties and is a framework to enable private firms to offer consumers energy efficiency improvement to homes, community spaces, and business at no upfront cost and recoup payment through a charge in instalments on the energy bill. The Green Deal loan is attached to the property rather than the resident, so the 'Charge is only paid whilst the benefits are being enjoyed' (DECC 2011).
Green Deal providers will offers green deal plans to customers, to finance work recommended by an accredited adviser, undertaken by accredited installer. There are some pre-requisites like financial savings after the retrofitting must be equal to or greater than the cost attached to the energy bill, which is also called as the 'golden rule', and the loan will be within terms of 'customer credit act', depending on individual circumstance and it is subject to consent by relevant parties. The Energy suppliers are supposed to collect the Green Deal charge from the resident and pass it on to the relevant body (DECC 2011). Thus the initiatives for energy efficiency is in the hands of the residents as well as private companies.
Benefits of Green Deal:
Estimated to create 100000 jobs over next 5 years (Holmes 2011)
Market for Green Refurbishment cold be in between £3.5- £6.5 billion/year (federation of Master builders)
Adding property value
Impact due to change in the policy:
Under the previous Labour government, the initiatives to stop energy leaking from homes was placed in the hands of energy companies. They offered measures loft insulation to customers on vastly discounted rates causing suspicion among customers. Households were also sent energy efficient bulbs and whether they used it or not, the energy companies were allowed to assume the carbon savings. (Restorick 2012) Initially there were problems in regulating the initiatives of the energy companies, but eventually the regulation improved and it led to rapid growth of the insulation industry (Restorick 2012).
A report by Association from Conservation of Energy has said that 'UK has 3.2 million cavity walls which are easy and cheap to insulate', but due to the change in policy it would mean that by 2022 only 1.7 million of these would be insulated. There is also a warning that the sudden drop in activity will damage the industry growth, affect fuel poor homes, and will result in a failure to meet UK emission targets (Restorick 2012).
Factors to customer confidence: (Laine 2011)
Measures to encourage, enable and engage customers.
Clear, credible and comparable communication to give consumers confidence.
Delivering quality services from day one
Experience of early adopters is critical due to the positive word of mouth
There is a need for 'access to information, access to financing, access to Skilled workers and need for straightforward credible information' (Middle Class Task force 2009).
Customers have lost trust in authority and are influenced mostly by media and by friends/family. 49% of people think they have no personal influence on limiting climate change (Sustainable choice survey, customer focus 2010) (Liane 2011).
The key financial barriers for consumers have been identified as cost over £4000, long payback periods and application of interest. Customers rather prefer paying £30-£50 monthly for a payment period of 4 to 5 years and on interest free. (Laine 2011)
There are also fears that some products could be out-modelled or breakdown before they had finished paying for them or that passing repayments to the new owners could have an effect on the property's ability to sell (Restorick 2012). To add to all these, there is also scepticism and mistrust towards the government and the energy companies due to vested interests and past experiences with incentives like Feed-In-Tariff in 2010 with the government cutting the rates of the feed-in tariff (which were fixed for three years) which led to a court case that the government lost. Such changes or cuts later on could mean that the whole financial model goes for a toss and affects the trust of the consumers, as there is a fear that things might be changed later leading to losses.
Affordability is one of the prime concerns in the minds of most of the customer, with payback periods of over 10 years seeming far too long, almost like a mortgage to some (Restorick 2012). There is also no clear evidence showing proportional increase in the economic value of the property after retrofitting. (?)
There is also another aspect that comes here which is the actual sustainability of the initiatives, incentives that the Government offers.
The interest rates of 7% or more would make a consumer rethink going through the Green Deal as other forms of loans including a mortgage on the property could come cheaper.
High levels of customer case and administration are needed. Upto 2-3 days cold be spent on each household (PECC, EST 2011). This cost could have to be met under energy saving for Green Deal (Golden Rule). If installers disagree with advisors (trusted source) results could be confusion, inaction, and widespread specification that do not meet the policy objectives. (Killip 2011)
The Khazzoom-Brookes postulate states that increased energy efficiency may actually result in an increase in energy consumption (Herring and Roy, 2007).
Sorell found (2007) that rebound effect might occur in over 50% of cases where heating upgrades are made. Herring and Roy, (2007) find that loft insulation, heating control and switching to CFLs all lead to heating or light to be used more. Therefore, it is important to address behavioural issues at same time; otherwise it will affect financial savings.
Other Issues: (Smith 2011)
Savings depend on energy prices remaining high.
Interest to be paid on Green Deal repayment?
Collection of Green Deal repayment?
Who will be responsible for shortfall between the estimated saving and reality?
Accuracy of SAP based assessment -(Wetherell and Hawkes, 2011)
Accurate model is needed to calculate energy savings made by different measure as it affects repayment amounts. xisting energy performance certificates (EPC) methodology which uses Reduced Data SAP (RDSAP) as a starting point for assessment (DECC 2010) SAP is based on BREDEM model.
AECB (2006) found that space-heating requirements predicted by SAP could be less that half of the actual figure and that cook and appliance energy uses are responsible for around 30% of energy consumption in a house.
Difference in SAP and actual figures - For the study SAP calculation has a maximum error of over 250% and average error of 100% both before and after refurbishment.
For two houses annual savings exceeded the SAP expected saving but for the remaining houses annual savings were less than predicted.
There is a need for more accurate system.
Among the participants of the study, questionnaires showed that making the house comfortable was a greater motivation for refurbishment than saving money.
Single occupancy households contain many of the same appliances as larger households, leading to higher per-person consumption. (Boardman et al. 2005)
Daytime occupancy - inaccurate
Geographic location - Solar radiation levels are not same everywhere in UK, for e.g. 845 kW/m2 in Inverness and 1164 kW/m2 in Jersey (Tovey and Turner, 2008). Winter heating requirement is ignore in SAP 2009.
One third of carbon saving from households could be an outcome of behavioural change. (Boardman, 2007)
Questions and issues emerging from Literature review:
The Green deal which is a Pay as You Save (PAYS) scheme, the whole model depends on factors like the accuracy of assessment of the property and savings predicted, the interest rate of Green Loan, the rate per unit of gas and electricity, quality of product, quality of workmanship etc. If any of these were to fail to give the results as expected, then the PAYS model will not work anymore and the project will no longer be a success.
These are the things that an average consumer would think about before they start retrofitting their homes baring a few exceptions of eco-friendly people who don't think about or can afford not to think about money spent/savings made on the retrofitting and will do it no matter what. Most of the householders would think about the money that they spend and the savings that they can make, which will make their homes more comfortable, warmer by using less energy and savings electricity and gas bills.
There are however two perspectives that we need to keep in our mind when we look at the issue of retrofitting, firstly there is the perspective of government who has its target of 2020 and 2050 to reach its promised carbon emission targets, to create jobs, industries and boost the economy as well as reduce the overall energy usage throughout UK. The second perspective is of the end user or the consumer himself, which is to make his or her home comfortable, warmer and reduce the gas and electricity bills. For an average consumer the 2050 carbon emissions targets and job creation is not such a priority as it is to save money and live in a comfortable house, as it doesn't immediately effect them (even though it will bring long term primary and secondary benefits). So the government has tried to sell a concept which finds a middle way, where the consumers are given incentives to retrofit their homes and reduce energy usage, which will directly help their mission. For the consumer however there are other concerns, primary being the 'What is in it for me' question and the final, accurate amount that it will cost and the savings it will generate.
Due to the above mentioned factors, there is confusion in the minds of stakeholders on what would suit their requirements. With the current economic conditions and job cuts, there are many households which will not be able go for an expensive retrofit to their homes, even though it would be approved through the Green Deal.