We've recently been carrying out some analysis of a house for a couple who use their heating system very differently to how it should be used - this is partly due to costs and party due to having lived in the house before the central heating actually went in.  We decided to do some additional 'what if' Green Deal scenario analysis.

Luckily the occupiers were able to provide details of their annual gas consumption ~ 17,519kWh.  What I did was use our Home Energy Masterplan to model the house with their actual use and then also modelled the house using standard heat settings and standard use of the heating system based on what was actually there - this was a RdSAP/SAP proxy. It is acknowledged that we did not do a current RdSAP calculation or a Green Deal assessment but we expect that our proxy is not all that far away. Here are the initial results of the baseline consumption are shown left.

The difference between their actual consumption and the potential consumption of the house under standard use is pretty dramatic. The Parity model was then calibrated so that it matched the actual use.

The next thing was to evaluate two standard measures and see what the predicted savings were under the different usage regimes.

The savings predicted using standard modelled use of the house are huge compared to those that our model predicts - for the boiler upgrade over 6 times as much and for the wall insulation also over 6 times.

Finally we looked at the expected annual charge for the two measures based on 25 year repayment and a 5% interest rate and compare this to the annual savings.

What do these figures mean?  They indicate that this couple could be told that a boiler upgrade will save then over £500 pounds a year and that the repayments will be £144 a year. Seems like a no brainer and definitely would meet the Golden Rule.  But our analysis shows that their actual savings might only be £85 a year - leaving then £59 worse off.

Similarly for the wall insulation.  They indicate that they could be told they would get a saving over £700 a year and only have repayments of around £400.  All looks good again. But they may actually only achieve savings of £238 a year - leaving them £158 worse off a year.

Conclusion
As we've said before, using tools that have actually been designed to benchmark properties to give financial advice may in some circumstances lead to very bad advice being given - especially to vulnerable people. Other than that we think the results speak for themselves.

Fuel Prices
 A week or so ago British Gas announced some pretty large price increases for gas and electricity and others such as Scottish and Southern are following suit.

We’ve already reflected these price changes in our analysis we carry out for Home Energy Masterplans (alternatively you have the option to set the price at a level of your choice).

We thought we’d give a quick illustration of how this might affect some analysis.  Let's say that we’ve evaluated a boiler upgrade as having a cost of £2,000 and a payback of 10 years.  If we now factor in these prices changes the payback will roughly speaking have dropped to 8.5 years.  When we evaluate packages of measures it will be a bit more complicated but you get the general gist.

Fuel Poverty - is on the increase
The diagram shows some of the main factors influencing the number of people in fuel poverty and the degree of their fuel poverty. For most people lucky enough not to be in fuel poverty it may seem that they have little ability to help those that are. However everyone has an influence on the overall ‘demand’. 

Therefore reducing demand through fabric changes, system changes and lifestyle changes can affect one of the
factors contributing to fuel poverty.  Fuel poverty is not just about those in it.

Renewable Heat Incentive Premium Payments
We are still waiting for the final details of the RHI but the means of registering an interest in the Renewable Heat Incentive Premium Payments has just been launched.

Essentially these are mini-grants available to up to 25,000 installations of ground and air source heat pumps and solar thermal systems before the full scheme is launched. The payments have been set as follows:

  Solar Thermal Hot Water           £300
  Air Source Heat Pump                £850
  Ground Source Heat Pump       £1,250
  Biomass Boiler                            £950

One of the criteria that we are pleased to see is “For other technologies [other than solar thermal] applicants must not currently use mains gas supply for their heating systems” This will help ensure, along with other appropriate controls, that the systems are only installed in appropriate situations.