Green Deserts and Forests

This month we had the Solent Retrofit conference, a revealing report from the MCS organisation, the death of the Green Homes Grant Scheme and early warning that the days of EPC's may be numbered too – what is going on and how do you keep up? 

 What is MCS?

Lets start with MCS – that is the Micro Generation Certification Scheme – if you have any 'green' improvements on your properties it is best to use an MCS certified installer and get the appropriate MCS documentation. Apart from giving you the peace of mind that the job has been done well and to the appropriate standard, if you need to connect any element to the electrical network (as you would with solar PV for example), then the MCS certificate is essential, as it is if any grants are involved.

MCS have kept records since 2008 and it is interesting that from just 43 MCS registered installation then, they now have records of 1.2M completed green projects in the UK. They updated us at the Solent Retrofit conference and also published a report on what is where that makes interesting reading.

Some interesting facts and figures:

• 30% of UK carbon emissions comes from homes
• The typical green consumer is a professional or skilled adult aged 30-65 living with just 1 or 2 others in their own semi-detached or detached home in a rural location
• Solar PV cost has reduced by 60% in the past 10 years
• There are 5 main technologies: Solar PV, Air Source Heat Pumps, Solar Thermal, Ground Source &/or Water Source Heat Pumps and Biomass.
• Forests (where there are a lot of installations):South West, Central Wales, Scotland and East Anglia.
• Deserts (where there are fewest installations): The North West and London
• Top 5:Orkney Islands (20.8% of properties), Western Isles (14.95%), Mid-Devon (14.56%), Stirling (14.1%) and Peterborough (13.4%)1 in 5
• Bottom 5: Kensington (0.3%), Westminster, City of London, Hammersmith and Fulham, and Camden (0.73%)1 in 333
• Installations are often higher in areas with significant fuel poverty

 Why Is Scotland So Far Ahead / How Far Behind Is The UK?

The Home Energy Scotland loan scheme offers interest free loans up to £17,500 per home to fund renewable installations with 12 years or more to repay the biggest loans – the loan can fund up to 2 renewables solutions per home including up to £5,000 for solar PV, £6,000 for energy storage systems and £10,000 for heat pumps.

Other similar countries have done far better – the UK has installed around 22,000 heat pumps whereas France has 250,000 and Germany has 0.5m

See the full MCS Report here:https://mcscertified.com/landmark-report-reveals-britains-small-scale-renewable-energy-deserts-and-forests/

 Where Are We?

The local breakdown of MCS statistics was shared at this months Solent Retrofit conference and for Portsmouth, considering it is a leader in energy management of council owned commercial properties and has significant investments like the Tesla Powerwall installation and the extensive solar PV, the numbers are actually very bad.

• 4.3% of households in Solent LEP but only 1.78% in Ports have some form of MCS 'Green' solution(Solent LEP covers New Forest, Soton, Eastleigh, Gosport, Fareham, Portsmouth, IoW & Havant)
• Portsmouth has the lowest take up of renewables in Solent region and also lowest Gross Domestic Household Income (See MCS figures above, definite correlation between wealth and green investment)
• Portsmouth has ~90K households and only a couple of hundred MCI installs
• Highest uptake is in the IoW, lowest in Portsmouth & Gosport
• There are 42 MCS contractors based in Solent area (70% solar, 30% Heat Pump)

Green Homes Grant and EPC Updates

There is a long history of central government coming up with a scheme, the Treasury funding it from current year funds, passing it to Local Authorities 2/3rds the way through the fiscal year with objective to spend before year end. This short-term approach has ensured a piecemeal approach to energy conservation in the housing market where we all know it takes months to get any job done. Add to this the limited number of builders and trades people who go through the hoops to become MCS certified – it is a big cost for those that do not specialise in this area, and surprise, surprise, when funds do become available no one can find a contractor to perform the work in the time available.

This is what has happened to the Green Homes Grant scheme and the Treasury, in its wisdom, has clawed back £1.2Bn on the basis that only 60,000 homes have taken advantage so far instead of the 600,000 it was intended to address. Fortunately, £300m of this claw back has been given to Local Authorities to spend in this area but we would have preferred a scheme that actually worked.

With that in mind, it was almost amusing that the future of EPC's has been called into question. Obviously, the intended consequence of EPC's was to allow people to choose those properties with better energy efficiency over those with less. We all know that price, location, size of garden, number of bedrooms, look of kitchen and bathroom, general décor all play a part in any decision, along with price and location and then price and location again – so it is not surprising that with this many important decision points, EPC D versus EPC C does not get a look in. Unfortunately, the myopic civil servants who came up with the scheme have taken 10-12 years to work this out, and to that end, they are now consulting on whether MEES (minimum energy efficiency standards) based on EPC's are the way to improve things. So whilst on the one hand, the civil servants are debating with the industry whether to introduce a MEES EPC rating of C by 2025 or perhaps 2028, it is almost amusing that an influential group of MP's have said that EPC's ought to be scrapped because they are outdated and not fit for purpose.

An interesting summary of their report can be seen here:https://www.estateagenttoday.co.uk/breaking-news/2021/3/the-end-of-epcs-government-told-to-scrap-outdated-scheme

Property Renovation Passports

The recommendation by the MP's to replace EPC's with Property Renovation Passports is interesting as it was a topic which was discussed at the Solent Retrofit conference this month. The issue for private landlords which stops them from investing in green solutions is 2-fold:

1. A £10,000 investment in a replacement bathroom can be offset against income tax and will instantly make the property easier to let and will probably command a higher rental income. A similar investment in solar or maybe a heat pump is seen as a capital investment, so cannot be offset against income tax and is unlikely to improve a properties appeal to potential tenants or alter the rental income.
2. Existing schemes to help encourage investment, whether via grant or loan are too narrow and too short term

If, we had a Scotland style scheme (see above), whereby an interest free loan payable over 15-20 years could be secured against the property and repayments could be transferred with any transfer of ownership and the landlords expense could be setoff against income tax or business investment relief in the same manner as other businesses operate, or better still a 'green uplift' similar to the 130% 'super deduction' on new plant and machinery in this months budget, then government would finally get the rapid progress in this area it really needs if we are to be carbon neutral and which currently, is not happening at all.

To drive all of this, we also need 'retrofit expert assessors' to advise, conduct energy audits and more accredited trusted local contractors to carry out the work.

Do let us know what you think and put our June 2021 meeting in your diary – we aim to have a panel of 'Green Experts' to answer all of your questions.