With the second round of funding recently confirmed, Parity Projects is pleased to announce that it has been chosen as a key delivery partner for a number of the successful Low Carbon Assessment Fund projects. The projects represent a broad scope and scale, and span a wide geographical range, with partner organisations including:

• Bathford Energy Group, Somerset
• East Hampshire Environment Network, Hampshire   
  
• Ecoisland, Isle of Wight 
• Energy Efficient Widcombe, Somerset
• Liverpool Housing Trust, Liverpool 
• Staffordshire Housing Association, Staffordshire
• Sustainable Merton and London Sustainability Exchange, London
• Wadebridge Renewable Energy Network, Cornwall

In line with the funding brief, the projects are all broadly aimed at helping the organisations, and the communities they represent, to prepare for the Green Deal. As such they include activities covering our full range of services, from our award-winning Home Energy Masterplans and Stock Assessments, to accredited training courses in “sustainable refurbishment”  and expert consultancy. We’re confident that these services can all play a significant role in helping the partners understand the retrofit potential in their community, build local capacity, and raise awareness about home energy efficiency.

We look forward to working with all of the partners over what will be a very busy few weeks up to the end of March. We will try to make sure we keep our website and blog up-to-date with the latest news from the projects and any interesting conclusions we can draw about the practical implications of the Green Deal, which is due to start in Autumn of this year.

Ever since the bombshell of the FiT cut and the 12th December deadline there has been a barrage of articles, virtually all highly critical.  We believe that much of these have been written with a lot of (mostly well intentioned) passion but few people have tried to do their own analysis. There has been some cherry picking of figures to meet their arguments. We stuck our neck out and wrote a blog that tried to give some dispassionate figures (see below). We've decided to give a bit more opinion on some of the areas of thought and analysis that have in the main been lacking in most articles we have seen........

1. There is therefore obviously a need for a big cut. Virtually everyone acknowledges that. But for those that don't....
If the ramp up before any proposed cuts in tariff is so big that it will cause a serious problem, with containers full of panels and thousands of new jobs at risk, then that is precisely why a cut is needed. It's almost the same old 'too big to fail' excuse being used.  Well it can't be 'too big' and and at the same time not have a projected 'too big' impact on everyone's bills.  The month-on-month increases through July, August and September far surpassed projections - and November just published has led to a 27% increase in overall retrofit capacity in 1 month!  And November was not a month when serious ramp up could occur due to the short lead in time.

2.What everyone is ignoring is that a big cut with a 6 month lead-in time will cause an avalanche greater than the one we have experienced in November/early December.  None of DECC's figures oft quoted are for the scenario where there is an announced six month window before any cut is given. If a 50% cut was proposed for April there is a good chance every container of PV panels heading anywhere in the world would be redirected to our shores along with anyone who knows a earth from a live wire.  Another way of saying this is that a big cut necessitates a very short lead in time - short enough that non-one can actually react to it.

3. The £26 figure for what it would cost everyone if the current situation continued has been quickly latched onto by everyone with little info on where it comes from. DECC's impact assessment clearly shows on page 17 that under a 'do nothing scenario' the cost by 2020-21 is £2,140 million per year or around £82 per house (although that appears to assume an average Feed in Tariff of 17.5p).  Even their 'Lower tariffs with 12 December eligibility date shows around £4 for 2011/12.  But Greg Barker said the £26 figure? Why would he understate the impact when he should be trying to tell people why it is necessary? You make up your own mind on that.  Most commentators should be aware that what politicians say is based on what message they want/need to give. A high figure would have far more people up in arms about current tariffs, would jeopardise any future tariffs and would also lead to serious accusations of why no-one acted sooner.  A lower figure just ends up with the PV industry and lots of people who mean well but might not have done the calculations up in arms.  He probably decided that the latter was easier to handle.

4. Other figures seem to be under-cooked too.  DECCs impact assessment had a projected GWh installation for 2011/2012 under the current scenario of 270GWh. Figures released for installations up to the end November are 407MW.

5. The is some consternation about social housing tenants missing out on free electricity.  The total proposed installations will effect around 2% of the social housing households. We are slightly uncomfortable with an argument that claims helping 2% of social housing save some money on their bills while 98% have higher bills!  If over 50% of social housing households get PV (i.e. more are helped than suffer) then there will need to be 2.24million installations. We would be very interested to see how that effects fuel bills!

6. There is some talk that the £26 figure mentioned above (in our opinion a low estimate if nothing had been done, or very low if a 6 month window had been given) is a small price to pay.  Comments like this would suggest that most installations and most comment is from the wealthy middle classes. £26 may not be much to those with disposable income but for those with none or negative disposable income it's £26 too much. And every penny that that is an underestimate makes it hurt more.

It's a strange fact that private clients don't ask us about how our Home Energy Masterplan (HEMP) compares to analyses based on EPCs or SAP.  Perhaps they are very astute or they just don't know the connection.

Contrary to this, organisations who should know better are constantly comparing our HEMP price to the price of an EPC or SAP assessment.  In this blog I'll seek to show whey our HEMP, starting at £290, is great value and why advice based on EPCs or SAP is not good value for money whatever the price - even free.

Blunt Instruments?
I'll start by getting a few things straight - and explaining and apologising for my title.  It's important to realise that EPCs (based on RdSAP) and SAP were never designed to be used to offer advice to individual households. They are supposed to be cost effective ways of benchmarking buildings and we believe they are often unfairly denigrated for not being good at something they aren't meant to do.  We also believe they are pretty good at what they are supposed to do. Why apologise for my title?  Well its falling into the same trap - EPCs and SAP are only blunt instruments when used for something other than their purpose - similar to criticising a cold chisel for not carving wood very well!

Below I'll highlight the reasons why a HEMP is what you need and why you shouldn't compare cold chisels to wood chisels.

How you use your building
As already pointed out RdSAP and SAP are used to be benchmark buildings. They necessarily apply a number of rules about how the buildings are used - especially the heating systems and controls.  Day-in, day-out, we survey properties and each and every one is used differently from how RdSAP and SAP would model them. Often it's the heating times, often the bits of the house that are heated, sometimes it  is secondary heaters, very often its the thermostat settings....the list goes on. Suffice to say if you are heating your house very differently from how it is modelled, the results of any analysis are going to reflect a situation other that yours.

The same thing applies to hot water, lights and appliances.  Whereas these are based on floor area for RdSAP and SAP we actually model how much hot water you actually use and what appliances and lighting you have. We find there is a really big range of hot water use and very wide normal range for electricity use - 3-bedroom houses often range from 2,000kWh pre annum to 9,000kWh (these also effect the heating calcs which is something we also take into account). Its important to add that this detail cannot be carried out in SAP or RdSAP.

Calibration
Even with the best surveying (and customers who try and tell you the truth) bills sometimes tell a different story from what has been modelled. Our process includes collecting annual bills so we can check that the modelling is correct.  50% of the time this highlights something that has been missed - hidden electric underfloor heating or fridge freezers in the shed - so is a good sense check. We then use this data to calibrate the model, partly making informed adjustments, partly adding additional miscellaneous items and party by adjusting the overall losses.  This all helps us get as close as possible to your real situation.

Lights, Appliances and Products
We've packed out software with a wide range of different lights, appliances and products so that firstly your home can be accurately 'built' with what it actually contains and party so that we can analyses lots of different options for you.  Xbox360 in gaming mode - we've got it, woodfibreboard insulation 40mm thick - yep, and also fishtanks, Celcon blocks, recycled cotton insulation......

Fuel prices, tariffs and subsidies
Fuel prices are constantly changing (usually upwards) and at different rates.  We change our prices to match the prices you are actually experiencing (or what you want to guess what prices might be). If British Gas raises its prices 18% - we can reflect that. The inability to model actual prices changes can mean that any calculations can be very inaccurate.

One of the biggest things to impact paybacks at the moment are Feed In Tariffs and the proposed Renewable Heat Incentive.  We model both.  We don't know anyone else who can accurately model what you might expect to get from the Renewable Heat Incentive.  Why not?  Well the payments will be based on your actual use not your use deemed by SAP or RdSAP.  Because we model your building and how you use it really really accurately we therefore are in a great position to model your potential RHI payments too!

If you aren't able to do all this then your analysis is severely limited.

How much will measures cost?
We've packed a database full of prices for a very wide range of measures, and we are constantly updating them.  Prices we provide are based on the surveyed data, not just huge static ranges.  An example is solid wall insulation.  The price will be based on the material, the thickness and the area to be covered.  Another is windows - prices dependent on the number of windows, the size of each and the type of window to be installed.  We can, and often do, override our prices either because you already have a quote or we want to take into account additional information about your situation.

This goes to the heart of what makes our process different.  It has been designed from its inception to offer advice rather then being shoe-horned into attempting to give advice.

There are other aspects too which set the Home Energy Masterplan apart and lead us to get feedback such as 'This is amazing', but I think you probably get the idea.

Just to finish, its worth reflecting that whilst each of the areas above in their own right firstly set the HEMP apart and secondly show weaknesses in using RdSAP and SAP, in reality all of them apply and those weaknesses add up. 

Today at Parity Projects we have launched, in collaboration with Keepmoat and Sustainable Homes, a new guide for Registered Providers and Local Authorities on the practical steps they should be taking to prepare for the Green Deal. The guide includes a summary of both the Green Deal and Energy Company Obligation, along with information on financing the Green Deal, preparing supply chains, and becoming Green Deal provider.

The idea of writing the guide came about following a series of workshops that we held with the partners for RPs and LAs where it became clear that many across the industry were desperate for answers on what the scheme would mean for their organisations. The argument for publishing a no-nonsense guide was strengthened by last week launch of the Green Deal and ECO consultation documents, which totalled many hundreds of pages of detailed information.

Launching the document, Richard Griffiths - our Business Development Manager - said:

“After attending so many events where Registered Providers were clearly concerned about the implications of the Green Deal but overwhelmed by the policy detail, it has been great to work with Keepmoat and Sustainable Homes – first in putting on the practical workshops, and then in developing this guide. We hope that the guide proves as helpful for Registered Providers as hearing their issues and concerns have been for us when thinking about the support we can offer them with the Green Deal.”

You can download a copy of  the guide here: "The Green Deal A summary guide to the big decisions for Registered Providers and Local Authorities"

More details on our CROHM stock assessment service - a key step in preparing for the Green Deal.

How much can you expect to be paid?

The proposed Renewable Heat Incentive payments are going to be based on how much you actually use - previously solar thermal payments were going to be based on 'deemed' amount but that too will be metered.

To work out whether installing a RHI applicable technology is going to depend on your actual use of it. 

It's all well and good using SAP for Feed In Tariffs for PV as you use of electricity won't affect things to a large degree. However our experience of modelling houses over many years has told us that people's actual heating and hot water bills are often a long way from what SAP predicts. The reasons vary from people using their houses differently to the standard occupancy to unknowns in the building fabric.

Our Home Energy Masterplan is the only product we know where we model your home and how you use it and calibrate it to your bills.  We can therefore model your real heat demand both now and after carrying out various proposed upgrade scenarios.

Wouldn't you like to know accurately how much you can expect under the RHI before you spend £4,000 to £20,000 installing?

Feed In Tariff
As you 'd expect we now model the new Feed In Tariffs in our reports so you can get a true idea of how a solar PV system stacks up against other measures.

 In line with our ‘quantitative over conjecture’ approach to advising clients on the energy use in their home and housing stock, we have estimated the FIT tariff cost to average households under a variety of different installation number scenarios over the next 5/6 months should the FIT tariff rate not be decreased until April 2012.

We have produced these scenarios because we noted that:
·  many people in the solar industry are suggesting that the deadline for any FiT cut should be delayed until April 2012. 
·  the proposed FiT rate cut deadline in December is surprisingly soon.

We thought it likely that, given the rate of return possible given the pre-cut FiT (others have noted already that it it economic, even profitable, to borrow money in order to fund PV installations with the pre-cut FIT), the industry would probably ramp up very fast at the prospect of an April FiT cut. We were interested in the effect on the body of ~26M UK household energy consumers of various scales of market ramp upgiven that the FiT fees are spread across all users of energy in the UK.

The information and its associated spreadsheet (which you can get by emailing us) are free to use although we request that we are quoted as the original author. Please contact us with any questions or comments at info@parityprojects.com.

Parity Projects has no financial interest in promoting or not promoting photovoltaic technologies or installations.

Modelling scenarios

These scenarios are not based on detailed industry modelling or analysis, but are instead designed purely to illustrate the potential effect on UK consumers’ fuel bills given various possible FiT supported PV installation scenarios. We believe that Scenarios 2, 3 and 4 are the most likely in the event of an April cut, and that Scenarios 2, 3, 4 and 5 are probably unlikely in the event of a December cut.

 

Scenario 1 – steady state September i.e. the same rate of installation as happened in September month on month.  We believe that this is well below what might have been the actual reality given a reasonably long notice period of April 2012.

Scenario 2 – continued installation with month on month increase rate equal to 90% of the August to September 2011 increase, levelling off somewhat about February

Scenario 3 – continued installation assuming steady month on month increase rate experienced between August to  September 2011

Scenario 4 – steady increase installation to achieve installed capacity ten times the September levels by April 2012 (i.e. a 20% increase each month in the monthly installed capacity)

Scenario 5 – steady increase installation to achieve installed capacity thirty times the September levels by April 2012 (i.e. a 60% increase each month in the monthly installed capacity)

Key notes:

1) These are only the figures to April 2012.  There will be continued increases in costs to households for any installations after April 2012 at whatever level future tariffs are set.

2) These are crude calculations with many assumptions. The basic assumptions are stated in the accompanying spreadsheet. All comments are gratefully received by Parity Projects by email to info@parityprojects.com or on our blog http://www.parityprojects.com/parity-news-blog.html.

3) The PV generation figures are based on a SAP2009 calculation for a south facing roof in London. If average electrical generation is above or below these figures then FIT payments will be higher or lower by a corresponding amount.

4) We have only looked at the FIT payments due to ‘PV retrofit’.   PV retrofit comprised 64% of installed capacity in September.  This means that the total cost to consumers will be above the figures calculated although most of the non PV retrofit capacity will be at a lower tariff.

5) ‘Standalone PV’ is has experienced significant growth in the last few months but any figures relating to standalone are not included in our analysis.

6) There are 4.48 million social housing households.  It is not expected that anything other than a very small percentage of these are in the pipeline for PV installations before April 2012 and that an even smaller percentage would be benefiting from anything other than some free electricity when the installations on their roof were generating due to the FIT being owned by the social landlord.

7) The analysis relates to the ramp up figures if there was to be an April 2012 deadline. Any figures following the announcement of the December 2011 change are not relevant.

Assumptions/references:
Number of UK households - 26,000,000   (Great Britain's housing energy factfile (DECC), October 2011)
Installed PV retrofit capacity to end September 2011-11-06 - 202,585kWp   (DECC)
Other historic installed capacity   (DECC)
Average FIT rate used for PV retrofit capacity - 43p per kWh
Wholesale price of electricity used - 8p per kWh
Estimated % PV generated exported - 50%
Effective FIT rate passed onto consumer- 39p per kWh
Annual per kWp installed - 826kWh             (SAP)
Annual kWh based on September capacity - 167,335,210 kWh
Annual cost per household by end of September 2011 - £2.51

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.

With the summer conference season upon us, Parity Projects is taking part in several high profile sessions. We thought we would give you the opprtunity to see the content of those sessions and therefore give you a chance to come along and see us:

29th June     London - RICS Sustainabilty Conference 2011 - link here        
                        "Retroift Case Studies and the Realities"

29th June     London FLASH Event - Navigating Planning and Building Regs process for Low Carbon Housing
                       Download the event flyer here

30th June    Manchester, Greenbuild Expo 2011 - 13.00hrs - The Right Retrofit Standard and Strategy
                       Link here
                         

We often work with local people to provide the Home Energy Masterplan across the country. They know their local people and the types of buildings in their areas.

We are really pleased to announce that  Joe Lewis has completed his Masterplan surveyor training and so Greener Build, part of the extremely well know and respected Green Shop Group, will be offering the home energy masterplan from their base near Stroud, Gloucestershire.

Contact them directly to arrange a survey 01452 772040.