Supplementary submission submitted by
the Construction Products Association
THE IMPORTANCE
OF THE
EXISTING HOUSING
STOCK
1. Currently, the housing stock is responsible
for 27% of carbon emissions and even assuming an additional 200,000
new homes are built every year (the upper aim for new build),
pre 2007 homes will still represent more than 70% of the housing
stock in the year 2050.
2. Whilst the Government has taken a number
of important steps to raise the energy efficiency of new build,
in particular through Part L of the building regulations, this
has had very little impact on the existing stock—principally
only when householders have chosen (or been forced) to replace
their central heating boilers or install double glazing. The Energy
Efficiency Commitment (EEC) has been a source of support funding
for energy efficiency measures such as insulation, but the latest
phase of this scheme has been heavily oversubscribed and there
is now a hiatus until the next phase of the scheme commences in
April 2008. DTI support grants for householders to install microgeneration
have also been rapidly used up.
3. The main focus of Government's attention
has been on new build through the Code for Sustainable Homes and
the target to have all new homes built to a zero carbon standard
by 2016. Whilst these initiatives support worthy long-term objectives,
they do not provide the significant early benefits in terms of
reducing housing stock which is on average four times less energy
efficient that new homes built to the current building regulations.
And those built prior to the introduction of Part L of the building
regulations are even less energy efficient.
THE CHALLENGE
4. Much of the existing housing stock can
be significantly improved through existing low tech, low cost
and low risk upgrades such as cavity wall insulation, loft insulation,
and draughtproofing. If this were to be combined with decarbonising
grid electricity, greater use of microgeneration, and/or district
CHP for, say, blocks of flats, then even more significant savings
could be made.
5. Part of the problem is that new technology
is being promoted as the answer when in fact it is much more the
social and behavioural issues that need addressing. In particular
there is a need for some kind of incentive to persuade people
to see investment in energy efficiency measures as a priority.
In addition, we have to find a way to give householders the confidence
that they will not face the "hassle" that is all too
often associated with small scale domestic building work.
SOLUTIONS
6. The main focus of the recent Energy White
Paper has been on providing people with more information about
the use of energy in their home (smart metering) and the energy
efficiency (Energy Performance Certificates) and increasing the
support funding through the CERT scheme which will replace EEC
from 1 April 2008. Whilst the significant increase in the targets
set through CERT compared with the latest phase of EEC is welcomed,
there is a major problem in the transition from EEC II, for which
the allocated funding has been exhausted, and the start of the
new CERT scheme. This has major implications for manufacturers
and suppliers who cannot simply turn capacity on and off to meet
the short-term requirements of funding support schemes. What Government
urgently needs to do is to introduce mechanisms to allow immediate
access to the allocation that will be made available under the
new CERT scheme.
7. EEC funding has not, however, been available
to help fund certain key measures which will improve the energy
efficiency of housing such as the installation of more efficient
heating boilers or double glazing. The argument has been that
through the building regulations installation of more energy efficient
solutions are now mandatory and therefore no incentive should
be necessary. It does not, however, encourage people to change
voluntarily, and can result in unintended consequences as the
case study from the boiler industry illustrates.
Case study from the boiler industry
New regulations came into effect in April 2005
as a result of which all new domestic boilers had to be high efficiency
condensing boilers except in a few specified cases. As a result
these high efficiency boilers very quickly accounted for around
85% of new boiler sales whereas the figure had only been about
a quarter prior to the change. However, because of the higher
cost of these new boilers, sales actually fell by around 8% and
there was very strong demand for replacement parts for old boilers,
indicating that more people were "patching and mending"
their old boilers. Sales have now recovered roughly to where they
were prior to the change, but Government should see as its objective
a more rapid switch to these lower carbon solutions in the existing
housing stock.
There are currently over 3.5 million open flue,
gas boilers over 10 years old in service in British homes. The
replacement rate for such boilers is low—on current trends
at least 2.3 million of these aging boilers will still be in service
in 2010. With typical efficiency rates of less than 60%, such
appliances fall far short of the standards of modern condensing
boilers. On average such appliances produce 1.4 tonnes Carbon
equivalent (tCe) a year, 75% more than a condensing boiler.
Accelerating the replacement rate would secure
a significant early reduction in household emissions. On recent
trends, 1.2 million of these boilers would be replaced over the
next five years, providing an annual carbon saving of 720,000
tCe by 2010. Cutting the remaining pool of aged boilers by a further
third (or 750,000 boilers) over the period would provide an additional
carbon saving of 450,000 tCe. This additional reduction would
be sufficient to secure the Government's original target of a
5MtC reduction in household emissions.
8. Encouraging people to make such improvements
on a voluntary basis should be a key part of Government policy
and this could be achieved in a number of different ways. First,
VAT could be reduced to 5% on these products and their installation
to bring them in line with the lower rate of VAT on other energy
saving products. Alternatively, if Government wished to offer
more focused support it should provide some kind of financial
incentive for those who are provided with one of the new Energy
Performance Certificates when they move house. This is a time
when people are most likely to invest in their new property and
we must encourage them to choose to invest in energy saving measures
as a priority, based on the findings of the independent EPC. Such
incentives could be provided through a grant, a refund on stamp
duty paid at the time the house was purchased, or temporary reduction
in Council Tax. Any financial support would be dependent on the
measures being undertaken within, say, 12 months of the house
being bought.
CONCLUSION
If you were developing a business case for reducing
carbon emissions from housing, you would put your investment in
the short term in the existing stock. The Sustainable Development
Commission has shown that for every £ you spend increasing
the energy efficiency of new homes beyond Level 3 of the Code
for Sustainable Homes (the level to which all new social housing
must now be built) you would get a 50 times better return in carbon
savings by investing that money in the existing housing stock.
Whilst we are not wanting to discourage the requirement for new
housing to be built to the highest, cost effective, environmental
standards, if climate change is the most important thing that
mankind is facing (as many of our senior politicians keep telling
us), then we really should be putting greater incentives in those
areas which provide the most cost effective ways of reducing CO2.
June 2007
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