On the 10th March, DECC made an announcement about the much anticipated Renewable Heat Incentive.  Whilst many installers have expressed their disappointment, we welcome the approach being taken for domestic properties - the general approach being to delay actual tariffs until there is a greater understanding of the benefits, whilst offering a small grant to those willing to feed back about the actual benefits and performance of installations.

The Renewable Heat Incentive can be broadly split into three categories - biomass, heat pumps and solar thermal.  Each of these has come under scrutiny over the past few years and each seems not to be the panacea that they are oft touted as being.  There is a time and place for each but not every time and every place.

Solar Thermal
It seems generally the case that hot water occupies a great percentage of our consciousness than our actual energy bills - mainly because we are in much more direct contact with it than our radiators ticking away in the background. A way of thinking about the relative proportions of hot water to heat is to envisage spreading a nice hot bath of water throughout all my radiators - I don't think it would heat a normal house up much!

There are often very effective and much cheaper options for reducing hot water use  - combi boilers, improved tank and pipe insulation, low flow showerheads and shorter showers (and sharing baths :-) ).  This is why we analyse all these alongside solar hot water in our Masterplans.

A normal hot water bill will be around £150 - £250 a year, which can be reduced to around £100 - £175 with some low cost measures.  A solar thermal system might only save you up to 50% of this.  Instead a similar spend on walls could save you hundreds.

Heat Pumps
There are two types - air source and ground source.  They both work by using some electricity to turn the low grade heat in the ground or air into high grade heat in your house - essentially a fridge inside out.  Ground source are more efficient but require more space for underground pipework.

There are a number of questions and problems that need to be taken into account when looking at heat pumps -

1. They have large capital costs which makes then unaffordable to most people
2. Ground source require lots of space, which is only available to those with large plots
3. Air source are as noisy as a conversation
4. They can often lead to higher running costs depending on the heating system being replaced -  a major problem if the recipient of any RHI payments is different to the person paying the bills - e.g. in a social housing situation.
5. The actual efficiencies (Coefficients of Performance) are not well tested and where they have been tested are often be lower than published (see the results of a recent extensive Field Trial carried out by the Energy Saving Trust).
6. They are least efficient when the temperature differences between inside and outside are greatest - i.e. the middle of winter
7. Their associated carbon emission are dependent on the grid which has tended to become more carbon intensive over the past several years.

Biomass
The AECB recently published a paper (Biomass - a burning issue) outlining why Biomass was not always the best option.  Here is one of the opening statements:

"The use of biomass as a 'low or zero carbon fuel' is increasingly being adopted as the default solution to meet emission targets for new buildings.  This approach is fundamentally misguided and is leading to increased UK carbon emissions"

It seems things are not as simple as they seem and any scheme should take into account all the complication and issues raised in this paper.  There are also many of the same problems with costs and land as with heat pumps.

We strongly believe in the support and adoption of measures that will both reduce our CO2 emissions and reduce our dependence on fossil fuels. We also realise that there is limited resources available. The Governement's approach seems sensible to us, both to make sure that our limited resources are not used for less effective measures and also to ensure that the move to a lower Carbon Dioxide economy is not taken by those who can afford the capital costs, and borne by those who can least afford it.

The green airwaves are all a buzz with the potential impact of the Government’s Green Deal  - both on carbon dioxide emissions and creating jobs. Our experience of analysing homes shows it will have to be carefully thought out to make sure it ends up being more than a boiler upgrade, loft insulation and cavity wall insulation scheme – essentially an expanded Warm Front. We believe it can and will continue to explain how through this blog.

Spend £6,500 on eco or energy measures for 25 million homes could undoubtedly make a big impact....but what could you actually do with that money which also meets the ‘Golden Rule’ ?

'The “core principle” of the Green Deal is the “golden rule”; that the instalment payment for the energy saving measures, including the cost of finance, labour and products, should not exceed the projected associated cost savings on an average bill for the duration of the green finance arrangement. The arrangement could be for as long as 25 years for houses'

We have carried out the analysis for two schemes which are effectively Green Deal prototypes – one of the  Pay As You Save trials and for Whitehilll and Bordon Eco-Fit Loans.

The first involved interest free loans up to £20,000 and 40% discounts on works, and the second interest free loans up to £10,000.  Both offer greater incentives that that proposed for the Green Deal.

We performed detailed modelling and analysis, including behaviour and calibrating to actual bills, for these projects and many hundreds of others for private client and these are our high level thoughts on what would be recommended under a £6,500 Green Deal scheme or similar.

What we find is that - as you might expect - the 'usual suspect' measures that are already often covered by schemes such as Warm Front  and CERT, i.e. loft insulation, cavity walls insulation and boilers, will usually come top of the list.

• Loft insulation in an empty or slightly filled loft and cavity filling walls will almost always meet the Golden Rule and cost less than the proposed loan amount.
• An inefficient heating system would also usually come near the top of the recommendations and would necessarily mop up most of the money available for a loan.
• Other minor measures may meet the budget and Golden Rule but not always – e.g. draughtproofing.

This leads to two general findings:

1. Where heating systems have been upgraded already, major measures such as solid wall insulation will not usually fit within a £6500 budget (even if they meet the Golden Rule).
2. Where heating systems have not already been upgraded they will be the priority and will swallow most of the loan amount leaving little for major measures.  
3. Many major measures will also only meet the Golden Rule in this situation if they are evaluated against the house before any heating system upgrade.
   

This means that there is a risk that one of the key problems with Britain’s housing stock – uninsulated solid walls – 
 may not be addressed by a simple budget limited Golden Rule 'In or Out' Green Deal.

Some quick thoughts about things that could be included:

• Raise the £6,500 limit.
• Allow measures that have over 25 year paybacks but only allow the Green Deal to cover the portion of the cost that will be offset by savings in less than 25 years. (For example, hardwood sash windows with a payback of 122 years costing £12,500 and savings of £102 could have a Green Deal loan of £2,561. This loan would be offset by savings in 25 years).
• Allow secondary measures (where there will be reduced installation costs if works are combined) to have longer Golden Rule thresholds (e.g. underfloor insulation where solid wall insulation is taking place).

If Green Deal advice (or any other for that matter) is based on 'standard usages' of properties, it may be extremely inaccurate.  In this posting we have taken a real property that we have surveyed, then amended the heating, hot water and electrical behaviour in various ways to see what the effect on difference upgrades would be....all modelling was done using our own home energy software.

A lot of housing energy analysis is performed on properties with 'standard usages'.  That's all well and good for benchmarking or extrapolating but can lead to inaccurate advice when applied to real houses and real people.

The two key questions are:
a) do behavioural differences really have significant effect on the energy use of a property and hence what we would advise to do with them and;
b) are standard usages (e.g. as per BREDEM, SAP, RdSAP) reflective of average usages?

Our experiences says that for a)  the answer is a categorical YES and for b) we don't know if they reflect an average of all people but our clients have certainly deviated from the 'standard usages' significantly and regularly.

The house
We took a standard 2 bed semi detached late Victorian property with 2 residents.  The gas boiler was about 78% efficient, the walls solid and the actual electrical use a little below national average.  The residents mainly showered using a standard shower.

Heating
The first thing we looked at was altering the residents' heating patterns. We predicted their annual total energy use using our model as 20,868kWh which was actually within 5% of their latest annual use based on meter readings.

We then altered the heat settings to reflect BREDEM standard daytime and weekend on/off times and temperatures, and also a high use scenario and a low use scenario.  The graph below shows the large differences in annual kWh predictions.

What we did next was to apply two seperate measures to each of the above four scenarios - a boiler upgrade and 50mm of PIR insulation onto the solid walls.  We then also looked at carrying out both a boiler upgrade and the internal wall insulation together as a package.  The total cost of the two measures has been set at £5,000 (£1,500 for the boiler and £3,500 for the IWI).  The figures show that the paybacks will range from around 4.5 years to 12 years depending on the different behavioural use.  More importantly the client may have thought they were going to save around £776 if they had been modelled against 'standard usages' but actually will only save £443 a year - the consequences for people taking out financing are obvious.

Hot Water Use
Heating isn't the only thing that varies with behavioural use.  We have looked at differences in hot water use too. Although not as dramatic, we hope the figures show that actual use of hot water is also important.  The range after tweaking behaviour but without changing the number of people in the house or how frequently they wash changes from 2681kWh to 3625kWh annually. That's a rise of 35% !

We applied two different measures to each of these scenarios.  A simple one which upgraded the showerhead and the the upgrading the boiler.  The most obvious aspect here is that the showerhead measure has no affect on the base case as only baths are taken.  It's obvious, but it does highlight the importance of differences between actual use and 'assumed use' quite bluntly.

Electricity Use
Finally we looked at the same house with just two different lighting use intensities. The actual use is not excessive so we compared that to a situation where they left the lights on more.  For simplicity we didn't change any appliances modelled usages.

As expected, the results show us that the expected savings are much greater when the lights are used a lot more.  The key point again is the actual savings would not be known when the actual usage is not taken into account.  When you are spending £15-£20 on an LED lamp knowing that the kitchen ones will payback in 2.5 years and the loft room in 25 years is important.

There are a lot of properties that need to be upgraded to meet the Government’s targets for CO2 reductions for 2050 – around 600,000 properties a year!  One of the key times for times or intervention point is when the property changes hands, not least because:

• There is probably going to be some decorating anyway
  
• The property is going to be empty during handover
  
• The purchaser is less likely to be in economic trouble

Using rough figures for number of mortgages a year , house sales a year  and new builds a year, it can be seen that roughly 60% of properties are bought with a mortgage or between 500,000 and 750,000 properties depending on how liquid the market is.

It seems obvious that in order to meet the ambitious targets the mortgage lenders are going to have to facilitate building upgrades.  So are they?

Recent dealings with a leading 'ethical' bank has raised some concerns over whether lenders are going to pose a substantial barrier to the UK reducing its CO2 emissions.

Specifically they has told us that they currently have an internal Lending Policy that prohibits them from lending on properties that are either in a ‘poor’ condition or that may require temporary vacation during renovations. Since, many of our worst energy performing buildings would be described as being in a ‘poor’ condition, and in addition most renovations that would bring an older building up to current standards would usually require families to temporarily leave the properties, these kinds of policies undermine the Great British retrofit.

Additionally, they do not make the extraordinary prohibitions in their Lending Policy clear to potential borrowers until after the initial outlay for administration, application charges and survey cost.  This means that some borrowers may find  that their eco-renovation budgets are reduced by hundreds if not thousands of pounds before they even start!

So what are the Lending Policies of other banks and building societies and are they getting behind or in the way of a Greener Britain?

One of the proposed models for the Green Deal has been to evaluate energy savings based on individual measures installed. In this posting we've presented a worked example calculation showing the importance of evaluating installed energy saving measures as packages in evaluating savings and paybacks e.g. for the Green Deal.

When we look at all the options for a property we first of all evaluate the individual effects that each will have if carried out on their own.  Importantly we then use our judgement to build packages or suites of complementary measures to understand the net effect of them on the energy consumption and CO2 emissions.

To begin with we looked at 6 things that were possible for the house using our domestic energy modeling software (3 bed end of terrace Victoria solid wall....again).  This isn't an exhaustive list obviously.  The modelled energy cost of the house is £1,766 a year - its a pretty inefficient house.
 
The measures evaluatded were:

1. Upgrading the boiler from one with a permanent pilot light to a top specification boiler - install cost ~ £2,000
   
2. Installing 300mm of mineral wool loft insulation - install cost ~ £300
3. Internally insulating the solid external walls with 50mm of PIR insulation - install cost ~ £4,000
4. Zoning the house using thermostatic radiator valves to keep upstairs 2 degrees lower than downstairs - install cost ~ £0
   
5. Sealing the leaky ground floor floorboards - install cost ~ £2850
   
6. Insulating under the ground floor suspended floorboards - install cost ~ £1,300

The first graph shows the savings that you could expect by making each of the amendments on their own and keeping everything else constant - the boiler and the walls each are expected to save over 25% of energy bills.

If you add all of these up the total is not far off the total fuel bill costs of the house - yet none of them affect the electricity - alarm bells should be ringing.

Next we built a range of packages of measures and evaluated the net effect of each package.  The results and comparisons to what you would get if you just added the individual savings for the measure in each package together are show in the graph below.

As you can see the variance increases the more measures you add into the package - by the package with 7 measures the variance is around 30% of the actual savings.  In our Masterplans we often build packages with upwards of 30 measures so it's clearly essential to calculate the combined effect of recommended measures rather than just adding up the individual savings.

Do the regional variations in the climate of the UK have a significant effect on the potential savings from different measures?  We think so and that is why our Home Energy Masterplan modelling uses design weather years for different regions of the UK.

As an example we've taken a pretty standard 3 bedroom Victorian end of terrace in London (85m2 floor area), surveyed and then modelled it and then analysed the predicted effect of upgrading the boiler - an annual saving of £495 from an initial annual fuel bill of £1,766.

Background on the house:
Solid brick, no loft insulation, uninsulated solid and suspended floors
Single sash windows in good condition
Old boiler with permanent pilot light providing heating and hot water
Programmable heating on twice during the week and most of the day at weekends, thermostat set at 19 degrees throughout.

What we did next was to hypothetically move it around the country and carry out exactly the same boiler upgrade for the house in each location.

The image below shows where the different locations we chose and the graphs and figures show the £ sum of the variance from London over a 20 year timescale - chosen to represent a Green Deal style loan although it is expected that these may be up to 25 years.

These results are for single measures only and with everything else about the house and its use being kept constant.

We believe that the figures are large enough to make taking regional climate into account if accurate predictions are going to be made - especially if they have a financial implication.

In this cold weather we've heard quite a lot of news about condensing boilers breaking down, and condensate pipes freezing. An example article is linked here:
Thisismoney about condensing boilers failing during the cold snap.

We thought this article was a bit OTT for what is essentially occasional installer error on condensing boilers - which are in our experience usually good and reliable. It is however a useful article in highlighting this issue and gives us the opportunity to describe the solutions we've come across. Do feel welcome to comment with ideas / perspectives which may be useful to future readers.

If your pipe freezes, chance is that it is too small (20mm is common) or not steep enough. Ideally the pipe should be 32mm or more, and should fall quite steeply. Even so it may still freeze.

Further solutions we've come across people using successfully are to:
1 – put the pipe into an internal waste pipe (eg connected to sink pipe). This is probably the best solution.
2 – extend the pipe down into a drain that will be warmer due to bathwater / flushing loos / etc., being careful to ensure that it is positioned in a way that it won't become easily blocked.
3 – install pipe heaters (final option as these will use additional electricity - example product here). About 10W should probably do the trick.

The point about return temperatures is correct, and there is a related issue that old radiators will have been sized for a flow temperature of 85, whereas it’s recommended that a condensing boiler should use a circulation temperature of 70. This can occasionally lead to under-sized radiator problems and/or a drop in efficiency, but even so the non-condensing cycle of a condensing boiler is more efficient than older boilers running at optimum efficiency, and any decent heating engineer will check as part of the installation.

There is no data available on reliability of condensing boilers – we hear that British Gas collects this data but it isn't currently published, and no one else seems to have any data. We'd love to see some research on this if anyone is aware of any existing, or chooses to commission some.

At the moment we think our Home Energy Masterplan is unique in the UK, as it is the only widely available detailed energy analysis tool of its kind. We know of nothing currently available that:

• evaluates the cost and energy/CO2/fuel bill effect of the wide range of energy improvements tailored on individual houses 
  
• includes actual occupant usages of heating, hot water, appliances and lighting
  
• draws on a database of implementation costs in order to provide economic paybacks and cost per unit CO2 saved for each recommendation.
  

We thought we would use this blog to pass on some of our findings from the hundreds of analyses we have completed to date as we believe that our unique experience may give a real insight into what will be needed for the Green Deal - and might be interesting to readers too. Filter the blog on the categories Green Deal and Parity Opinion.

The Green Deal currently seems to be planned based on a ‘golden rule’ where people should be saving more on their fuel bills than they are paying out in loan repayments. In order for people to be able to make the correct choices they will need to be given realistic estimates for the savings that are probable for their house, taking into account the way they live in it - as well as the savings that might be expected given ‘typical’ occupancy.  In order to achieve this we believe software will need to be available for the Green Deal, and it will need to include the following:

• An ability to calibrate the model of the house’s energy use to the actual energy use of the house
  
• An ability to model the actual behavioural use of the property – lighting, appliances, temperature settings, timings and zoning, actual hot water use, and so on – alongside ‘typical’ use for a house of that kind.
  
• Regional temperature and insolation (sunshine) data
  
• An ability to provide realistic costings for measures and groups of measures so that paybacks can be calculated
  
• An ability to evaluate packages of measures alongside individual measures
  

We’ll be elaborating on the points above in subsequent blogs postings as our experience has shown that without all of the above there is a risk that the projected savings could be very different from those actually achieved.  The Green Deal will be essentially a financial product, and we believe that people deserve to get the best possible estimate of the savings they are likely to achieve, especially if the Green Deal is offered to vulnerable people who are taking part in order to save money – as they may end up paying out more in loan repayments than they are savings from the measures.