Energy Efficiency. Green Deal was No deal for social housing. So how do you maximise the funding for social housing energy efficiency works?

Transcription

1 Energy Efficiency Green Deal was No deal for social housing. So how do you maximise the funding for social housing energy efficiency works? Farooq Mohammed, Director 22 May 2013 CIH Conference / Nottingham

2 Before 4Housing, over 25 years housing experience in property/energy related across public & private sectors, including: British Gas Community Energy: Bus Dev Director Energy Services & Obligations KIER plc: New Bus Director - (Social Housing) HOME Group: Head of Property Services (National RP) Network Housing Group (G15): Group Maintenance Manager (Regional RP) Local Authorities 10 Years Sheffield City Council, Bradford Metropolitan Redbridge Homes & Methodist Homes for the Aged: Board Member - Round 6 ALMO / National RP

3 Our Deal: The next hour I will share thoughts on 1. UK Context / Green Deal 2. Funding options for EE works 3. Maximising Funding 4. Funding Examples You: Ask Questions Share Inform

4 UK Context Domestic CO2e (per capita) Germany Ireland Poland Denmark United Kingdom Belgium Greece Holland Finland Switzerland Austria France Spain Sweden Domestic per capita emissions (t CO 2 ) Source: International Energy Agency, Carbon Emissions from Fuel Combustion: Highlights, 2010, p103

5 UK Housing - Some of the oldest in Europe

6 UK Housing Scale of CO2e & targets Source: 1- DECC Annual statistics on Climate change BRE Domestic Energy Fact File 2008

7 UK Govt Response - Green Deal / What is? Market led demand, householder enquiry. Property assessed for EE improvements Improvements carried out at no upfront cost to householder Costs repaid over up to 25 years via electricity bill Householder still allowed to switch energy supplier Unsecured debt attached to meter at property, not individual Wide ranging qualifying measures e.g. insulation, heating, windows, etc. Must meet Golden Rule: Energy Bills AFTER Green Deal Green Deal Loan Repayments Energy Bills BEFORE Green Deal

8 To some, Green Deal is No Deal for social housing? Market led concept based on owner-occupiers. SH homes already more energy efficient than national average with little potential for quick wins. In Fuel Poverty, improvements will only result in spending same to heat homes properly High cost of Loans close to 7%... Against backdrop of upheaval through current welfare reforms. (No Deal - 63% in a recent Inside Housing survey) Q - What do you think?

9 But some believe Green Deal is a BIG opportunity Tackle cost prohibitive properties: Hard to Treat Solid Wall Rural (off grid) Commercial ambitions: Become GD Provider Broaden service offerings Undertake works in Private Sector Q - What do you think?

10 So which is it, deal or No deal for social housing? Q1 = Who is already actively started with GD or planning to? Q2 = Who has already or intends to become a GD Provider? Q3 = Who has a policy in place to deal with GD enquiries from tenants? what can we conclude?

11 What are the funding options available for EE works? 1. Green Deal Finance 2. Landlord Funded 3. Tenants PAYS 4. Energy Supplier Obligation 5. Other Pots / Grants

12 1. The Green Deal Finance Company - TGDFC Subject to Golden Rule Cash (for Loans) from GDPs Set Up 63 / Annual Charge 20 GDP can pass on all admin costs GDP Loan Charge: APR 7-11% Householder faces Credit Check Loan Period Years Early Redemption Fee (>15yrs)

13 1a. TGDFC How it Works:

14 2. Social Housing Landlord Directly Funded LA: HRA Reforms Based on +/- value of housing stock Retention of all Rental Income Fund own housing stock directly Assumes 15% increased spend RP: Potential to use Balance Sheet Ability to secure low cost capital Business Plans will ultimately dictate

15 3. Tenants paying directly 41% said yes! Based on survey of 300 social housing tenants nhei Report 2013

16 3a Social Housing Pilot (1500) 76% said yes! Overall take-up rate was 1,039 with 791 installs completed: No 24% 71% happy to pay back through their meter: No 29% Yes 76% Measure Installs PV Only 41 PV & Double Glazing 76 PV, Double Glazing & Combi Boiler 56 Double Glazing Only 120 Double Glazing & Combi Boilers 440 Combi Boilers Only 17 Total 791 Yes 71%

17 4. ECO: Energy Company Obligation from Jan 2013 To reduce CO2e + tackle FP GD subsidy where Golden Rule not achievable Focus on high cost measures i.e. SWI Levy - We all pay through our energy bills DECC forecast 1.3b pa (> March 2015) c 760m - Carbon Saving c 190m - Carbon Saving Community Obligation c 350m - Affordable Warmth

18 4b. ECO: Focus on High Cost Measures

19 4c. Accessing ECO Funding: Two options: 1. ECO Brokerage: Auction Platform Access via GDPs Competitive Dynamic Allows reserve levels Transparency 2. Directly from Energy Supplier: Bilateral relationships Directly Negotiable *Fund v Fund & Deliver Q What is your experience?

20 4d. ECO Brokerage: Interesting Q1 results Over 62% ( ) failed to make reserve..

21 5. Other potential pots of funding? Examples include: Regional Growth Funds London Energy Efficiency Funding Jessica Funds European Regional Development Funds Confusing, not always easy to find out, engage with local stakeholders!

22 Maximising opportunity m GD cash-back 2. Integrate with AM plans 3. Aggregation Privates 4. Feasibility / Survey Costs 5. Fund & Deliver ECO option 6. Resident Engagement costs 7. Wait towards the end of ECO?

23 Maximising GD Cash-Back Scheme Designed to stimulate GD market Limited - Up to 125m available First come, first served basis Reduces after first 40m GDAR required Works must be completed within defined period GDP can manage process Reduce your contribution!

24 Example 1 ECO Funded (On Site) Social + Private - Rural Scheme: ECO = 55% Fund & Deliver model 66 solid wall properties Dispersed across villages Spec EWI 10 Week Programme Additional Scope private homes Cash-Back = 12.5% Client Contribution = 32.5% Total Scheme Funded = 100% *Private AW funding + ATP

25 Example 2 ECO Funded (in discussions) Social Housing: ECO = 62% Fund & Deliver Model 149 Solid Wall + Off Grid 8 Archetypes Target Measure EWI, IWI Additional Scope - private homes? Cash-Back = 8% Client Contribution = 30% Total Scheme Funded = 100% *Private AW funding + ATP

26 The ECO Deal Desired funding outcome Minimum SHP Contribution EE works fully funded Maximum ECO Carbon /CSCO Funds GD Cash-Back

27 Lastly word about 4Housing (one stop partner) Team of highly experienced practitioners supporting housing providers overcome challenges in: Energy Solutions Asset Management Partnering & Procurement Business Planning

28 Thank you for listening - Questions Farooq Mohammed Director Mobile Farooq@4Housing.org