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 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.
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.
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