External Insulation of Cornish PRC Properties – ECO Funding

Natalie Pace & Marc Brooker 8th July 2014.

• Social Landlord covering North Wiltshire,

Oxfordshire and Gloucestershire. • Total of 11,544 properties. - North Wiltshire – 7537 Homes - Oxfordshire – 3146 Homes - Gloucestershire – 861 Homes

PRC / Non Traditional Homes

Total PRC Stock – 841 • Reema – 262 • Airey – 99 • Unity – 150 • Woolaway – 192 • Cornish – 65 • Trusteel Mark II – 7 • Wimpey No Fines – 50 • Orlits - 16

• All PRC and Non Traditional properties except Cornish and Airey PRC’s and Trusteel properties externally insulated previously.

• Cornish and Aireys:- - Lower SAP. - Lower Resident Satisfaction. - High Energy Costs. - Poor Heat Retention / Affordable Warmth. - Not Aesthetically Pleasing - Failed minimum Group SAP Target of 65.

Finding a Solution • Limited budget available to externally insulate these 164

homes. • Explored funding streams over a period of 18 months. • Funding obtained via 3rd party (Solar Advanced) to

externally insulate Airey and Cornish PRC homes – 100% from ECO through EDF.

• Curtins Consultants (PRC Specialists) advised against external insulation on Airey properties due to structural concerns.

• Funding secured to externally insulate ground floor walls to 65 Cornish PRC’s in August 2013.

Cornish PRC’s • 65 Cornish Homes in 7 locations

throughout Wiltshire. • Mansard Roofs had previously

been insulated. • Different heating types:- - Gas – 25 properties - Oil – 36 properties - Electric – 4 properties

Average SAP of 57 before the works :-

- Gas – SAP 63 - Electric – SAP 45 - Oil – SAP 62 Ground floor cavities filled with blown insulation, detrimental to structure and distorted SAP scores.

Sourcing of Funding

• Approached by Solar Advanced with regards to alternative solar thermal products.

• Within the same meeting sources of funding were also explored.

• Solar Advanced investigated funding streams which took a number of months.

• CESP and CERT highlighted as a funding stream to be progressed.

• Unable to complete project and associated paperwork within allocated timescales.

• Due to changes in regulation 100 % ECO Funding was then obtained.

• GreenSquare, Solar Advanced and Curtins Consulting worked together to approve the programme of works.

• No penalties if properties are redeveloped.

Insulation System

• Wetherby Insulation System . • Phenolic External Wall Insulation System

with a Silicone Render Finish. • 40 mm insulation boards, mechanically

fixed. • Glass Fibre Scrim first coat 4-6mm,

second coat 2-3mm. • Silicone Render Primer and Finish.

Programme of Works • Works started on site in

September 2013 for a duration of 10 weeks.

• Weatherby Insulation System applied.

Unforeseen Problems during project:- • Enabling works due to tenant alterations. • Weather conditions. • Lack of co-operation from a small minority

of residents. • Heating Flue and fuel supplies. • Funding cuts by Central Government. • EDF stopped all works on properties that

had not been started. • This resulted in 5 properties being dropped

from the programme. • 4 of these 5 properties were in the same

street where 7 other properties had been completed.

• Privately owned homes on the estates were given opportunity to benefit from the 100% funding. 6 private properties took advantage of this.

Funding Cuts • Government Funding Cuts in

December 2013 impacting on ECO.

• Funding for the particular programme was stopped.

• EDF refused to honour final 5 homes because works had not started on these particular houses, although they were working in the street.

• Unable to source 100% funding on remaining 5 homes.

• Disappointment from both GreenSquare and its residents.

• Continue to explore alternative funding avenues.

• Works are going to be self funded on the remaining 5 properties before Winter.

• Tender documents currently being prepared to send.

• Great deal of time spent reassuring and explaining the current situation to the residents of the remaining 5 properties.

Completion of Programme

• 60 of 65 Cornish properties completed under Eco

Funding. Total cost of the programme was £400k. • Increased SAP by an average of 10 points per property. • Average Cornish SAP is now 67. • Significantly reduced heating bills (too early to draw

comparisons). • Information leaflets provided to all residents. • In house Tradesmen received training. • 25 year guarantee on materials and workmanship.

• Aireys - continue to liaise with Curtins about approved systems.

• Aireys – redevelopment opportunities.

• Trusteels – 7 homes externally insulated with no grant funding. This was combined with structural repairs.

11 Brooklands, Brinkworth.

Completion of Programme

Customer Satisfaction Overall satisfaction with this programme of works is very high, however some residents have commented that the upstairs of the properties now feel cold.

Ron and Therese Giles “After having external insulation installed, not only does the house look great, but it really is so much warmer. We definitely don’t have to buy as much oil and coal as we used to, which saves us a lot of money.”

Mrs Barker “ The works from start to finish were excellent. The way the tradesmen worked around our existing lean too was great. They even providing fittings for our wall mounted flower pots. We couldn’t be happier.”

Questions

Thanks for listening.

Any questions please ask.

Marc Brooker Project Surveyor (Energy) Tel - 01249 466133 Email -marc.brooker@greensquaregroup.com

Natalie Pace Group Senior Building Surveyor Tel - 01249 466084 Email – natalie.pace@greensquaregroup.com

NHF AMMC – Warwick 8th July 2014

Funding energy efficiency and low carbon improvements Breakout Session A10 Paul Ciniglio - Sustainability & Asset Strategist

About First Wessex: Hampshire and Surrey based HA 20,000 existing assets Build around 400 new homes each year £35m pa RR&PM spend Sustainability Strategy & SHIFT Funding case study projects: - Retrofit projects - Solar PV project - Allowable Solutions - (RHI) - EU funding

Heronwood project Retrofit of 20 pre-fab flats in Aldershot

Energy modelling, costs & programme

Measure

SAP rating

Band

CO2

emissions (tonnes /

year)

Total %

improvement over baseline CO2 emissions

Pre refurbishment

60

D

2.69

-

External wall insulation

69

C

1.95

27.51%

100% Low energy lighting and mechanical ventilation with heat recovery (individual room system)

69

C

1.91

29.00%

1.1 kWp PV system (semi integrated)

76

C

1.51

43.87%

Replacement boiler (combination boiler for heating and hot water)

81

B

1.08

59.85%

Insulate flat walls to communal areas

81

B

1.00

62.83%

Funding Implications HERONWOOD LAST YEAR • ECO at £145/tonne lifetime CO2 savings

intervention (20% of the total costs of EWI/IWI provision).

• Cash back for EWI at £650 per flat. NOW • ECO at £35/tonne lifetime CO2 savings?

(CERO) • Cash back for EWI up to £6,000. BUT • State aid restriction on cash back (200,000euro over 3yrs + DECC time constraints). • Business planning for retrofit not straight

forward!

Rowner Retrofit • 5 retrofits (pre fab buy back homes)

• 80% emissions reduction • EWI, elec to gas condensing,

loft insulation, double glazing, single room MVHR, low e lighting.

• Blended cashback and ECO • With secondary measures up

to £7,600 cash back. • State aid • Commencing August

Solar PV programme • Target of 2.5MW installed over 2 years

(approx 900 homes, offices / sheltered accommodation).

• £4m with Good Energy • Annual CO2 savings estimated at

1,250+ tonnes. • Self funded, FIT income over 20 years • Average annual electricity bill saving to

residents £150. • 2.5kWp optimum domestic size. • Strong link to social outcomes e.g.

employment of 3 NEETs.

FWPS, Farlington depot - 28kW

FW CYH office, Eastleigh – 23 kW

• Proving marginal economically. – Price increases post tender e.g. inverters. – Necessary for FW to pay 20% Corporation tax on

FIT income. – Roof strengthening problem! – Selection of assets – Negative NPV’s but socio-environmental benefits – Discounted cash flow of 6.5% (NPV’s) – Multi installer reduction of 10% unhelpful

Solar PV market for Housing Associations remains open for business but must be tailored to suit organisations needs, its constitution and desired outcomes to prove overall viability.

Solar PV programme cont’d…

Solar PV monitoring

Place Court, Aldershot - 24kW

Wattson personal user display

Orsis remote monitoring portal

Rico public performance display

Preparing for zero carbon homes 2016 • Strengthening our partnership with ZC Hub

– Rowner research project • Factsheets, ongoing monitoring

– Closing the ‘Design v As Built’ performance gap. – Updating our Design Brief with latest learning. – Overheating in new homes.

• Sponsored primer 2013, national project partner, field data

– 2016 live demonstration project. – Allowable solutions trial (with Hub, NHF & Sustainable Homes).

3 steps to carbon compliance cont’d… A move to absolute compliance standards away from % improvements

Step 1 – Fabric Energy Efficiency Standards (FEES) expressed in terms of space heating and cooling energy use:

– Approx 46 kWh/m²/year (detached and semi detached) – Approx 39 kWh/m²/year (mid terrace, flat / apartment)

Step 2 - Carbon compliance ‘on-site’ / connected measures – 10 kg CO2(eq) /m²/year for detached houses – 11 kg CO2(eq) /m²/year for attached houses – 14 kg CO2(eq) /m²/year for low rise apartment blocks (four storeys

and below).

3 steps to carbon compliance cont’d… A new means to help fund EE retrofit Step 3 - Allowable ‘off site’ solutions

– Off setting / ‘buying out’ of residual regulated dwelling emissions (e.g. emissions between on-site carbon compliance level and 100% Code 5 equivalent).

– Consultation refers to a financial contribution of £36-90/tonne CO2 over 30 years (could typically be in range of £1,800 per home if £60/tCO2)

– Various compliance routes: DIY, contracting with development construction partner, National / LA held funds

– Housing Associations • Excellent retrofit opportunity • DIY or Contracting option likely to be most preferred • DIY very simple to implement, keeps payment in local housing • Lobbying to make this a reality!

EU funding for retrofit • ERDF / ESF via LEP’s

– retrofit eligible for revenue and capital funding

– match funding requirement – approx € 40m total per LEP (Solent and

M3) – Check with LEP – NHF will help advise

• EU Horizon 2014-20 – €80bn research funding for low carbon

buildings – 4 funding streams relating to retrofit – 100% funding for research – Partnership needs to be built – FW proposals

THANK YOU

QUESTIONS

Follow our progress at:

www.firstwessex.org/thechoice

paul.ciniglio@firstwessex.org

ECO Changes: Headline messages

1

• On 2 December 2013 Government announced that it would consult on making ECO easier and cheaper to deliver. Consultation then ran March – April 2014

• Right that Government reviews the impact of policies on household costs

• Proposed changes would see the whole ECO scheme extended to 2017, with new targets

• Would maintain the current levels of ambition for the elements of ECO directed at low income and vulnerable households (CSCO and HHCRO), and extend them thereafter, at the same scale, to 2017

• Our proposals would also extend CERO to 2017, but at a reduced level, and help households install cheaper energy efficiency measures such as loft and standard CWI

• Based on what suppliers have told us, we estimate that the proposed changes to ECO will result in a £30-35 reduction in energy bills, on average, in 2014

2

ECO Changes: Timeline • Consultation ran 5 March – 16 April 2014.

• 266 responses (thank you!)

• Expect to publish Government response (and lay final regulations) before end of July 2014. This will set out the final, detailed arrangements – providing certainty

• Ofgem guidance on the new rules as soon as possible after that

• Changes will not come formally into effect until Parliament returns in Autumn and can vote on them

• But some changes – e.g. eligibility of basic insulation measures (loft and standard cavity), or expansion of the rural areas eligible - will then have retrospective effect, backdated as from 1 April 2014

3

Proposed changes in consultation (1) Government consulted on the following proposed changes to ECO:

The Targets

• The March 2015 Carbon Emissions Reduction Obligation (CERO) target will be reduced by 33%

• The March 2015 Carbon Saving Communities (CSCO) and Affordable Warmth (AW) targets will remain the same

• ECO will be extended to March 2017 and new targets imposed for CERO, CSCO and AW at a pro rata of the March 2015 levels

New targets are proposed for 2017 • Proposal to set NEW targets for 2017 for all three ECO sub obligations.

• Proposed levels for the 2017 targets will be contained in the consultation.

• No diminishing ambition for ECO elements targeted at low income and vulnerable consumers.

4 Presentation to Steering Group 21 February 2014

Sub obligation 2015 Targets Enforceability at 2015

CSCO No change proposed Remains an enforceable compliance deadline at 2015

Affordable Warmth (HHCRO)

No change proposed Remains an enforceable compliance deadline at 2015

CERO Proposal to reduce by 33% Proposal to allow supplier to under deliver at 2015, but their 2017 CERO target will be increased by 1.1 times the carbon shortfall at 2015

5

Proposed changes in consultation (2) Proposals on ECO delivery

• Energy suppliers would be able to carry forward over-performance from CERT/CESP, and count it towards their ECO targets at the maximum possible level

• Energy suppliers could carry forward over delivery against their March 2015 targets to count towards their March 2017 targets

• Suppliers may choose to deliver less than their share of the new 2015 CERO target – in which case, the supplier would see its CERO obligation for March 2017 increased by 1.1 times its shortfall in March 2015

• Suppliers that have delivered >25-35% of their current Phases 1 and 2 CERO target by 31 March 2014 will receive 1.75-2 times the carbon score for the measures delivered to that date – the scoring uplift would only apply to measures above the threshold, and activity carried forward from CERT / CESP would also be excluded from this uplift

• The above flexibility and uplift proposals would not apply to HHCRO or CSCO targets

6

Proposed changes in consultation (3) Carbon Emissions Reduction Obligation (CERO)

• The March 2015 CERO target will be reduced by 33%, and extended at that level (pro-rata) from 2015 to March 2017

• Connections to district heating schemes will be included as an allowable primary measure under CERO

• Standard cavity walls will be included as an allowable primary measure (as a result, we would envisage that current administrative rules on the identification of hard to treat cavities would fall)

• Loft insulation will be included as an allowable primary measure, but propose putting a clear compliance mechanism in place

• Would include retrospective delivery of loft and CWI from 1 April 2014 onwards

7

Carbon Saving Communities Obligation (CSCO)

• Extended from the bottom 15% to the bottom 25% most deprived areas, based on the Index of Multiple Deprivation (IMD)

• Qualifying criteria for the CSCO rural sub-obligation will be simplified

• Measures will qualify for the rural element if they are installed in households in the poorest 25% of rural settlements

Pre March 31 2014 Post March 31 2014

CSCO CSCO Rural CSCO CSCO Rural

% of obligation 85% 15% 85% 15%

Definition of rurality NA Settlement of 10,000

people or less NA Settlement of 10,000

people or less

Eligible areas Lowest 15% on IMD Any rural area Lowest 25% on IMD Either

Any rural

area

Lowest 25%

on IMD of

listed rural

eligible areas

Eligible recipients Any household AWG Any household AWG Any

households

8

Affordable Warmth (HHCRO)

• We are not proposing any changes to the targets originally set for 2015 for Affordable Warmth, however we propose to set new targets on top of this for 2017

• During 2015 – 2017, propose 1) to incentivise delivery to non-gas fuelled households by uplifting their scores and 2) require a warranty to be included with all boiler replacements

Solid wall insulation (SWI)

• There will be a requirement to deliver a minimum level of SWI – set at 100,000, or a specific volume of CO2 equivalent to that number of SWI installations

• The target would be delivered by 2017, across all companies and all elements of ECO

• There would be no other measure-specific sub-targets

9

Proposed changes in consultation (5) Delivery costs

• Government intends to increase transparency of the costs of ECO, either through voluntary agreement with suppliers or by taking powers through legislation

• Suppliers intend to provide active support to the Green Deal and work towards reducing their ECO costs by increasing blending of ECO and Green Deal finance packages

Scheme Simplification

• Inviting views on what elements of the ECO scheme rules would benefit from simplification, and if so, how this can most effectively be done while still ensuring that the scheme objectives are met and the schemes integrity maintained?

Questions

10

1. How can we make ECO easier and simpler to deliver?

2. How can drive greater delivery to non-gas fuelled households?

3. Delivering on a street by street basis has a range of advantages – particularly for SWI - how can we drive this type of area based delivery?

4. What can we do to improve the customer experience of ECO and ensure customers get the measures they want and the quality of installation they have the right to expect?

5. £400m has been traded so far o the ECO “brokerage” platform – currently restricted to Green Deal providers. Is there appetite in the social sector to get directly involved in this trading?