Onzo

This week is the Energy Saving Trust’s 12th annual Energy Saving Week. As our main contribution to this event, Onzo has published a manifesto for improving the energy efficiency of the UK housing stock, which is responsible for around a third of all carbon gas emissions. Our comprehensive proposals, “A Blueprint for Green Homes” is found below. They have also been sent to the new Department for Energy and Climate Change as part of our drive to influence government thinking.

Onzo’s blueprint for greener homes

The challenge
• Domestic energy use is currently growing
• Energy is used mainly to heat space and water
• UK housing stock is poorly insulated
• There are no targets and few requirements or incentives to make improvements to existing housing which represents the vast majority of the housing stock
• Energy efficiency improvements are costly and their payback period is long
• Consumers do not have information on which to base energy efficiency decisions

Onzo’s greener homes manifesto
• Energy efficiency improvement loans repaid through council tax or mortgage or energy bill attaching to the house not the individual
• Council tax should include a local green tax based in part on Energy Performance Certificates hypothecated to improve insulation
• Requirement under planning law that insulation of whole house be improved when it is extended
• Zero VAT on domestic energy efficiency expenditure
• Requirements on energy companies to provide their customers with accurate, timely and sufficiently detailed information on energy use
• Energy consumption data clearly displayed on all electrical appliances
• Annual domestic CO2 emissions reductions targets

More detail on the headline measures
• Most energy efficiency improvements are relatively expensive and people don’t have the cash, especially now, to fund these. There is a further disincentive in the form of the payback period: most people have moved house before the improvement pays for itself, which typically takes 10 to 20 years. Government should require and enable energy companies, mortgage providers and local authorities to provide loans whose repayments remain with the property rather than the individual. These loans need not be interest-free; however they should not be allowed to be a source of additional profit to their providers, so rates will need to be regulated.

• Council tax should include a green tax based in part on Energy Performance Certificates (EPCs). Home Information Packs – HIPs – of which EPCs currently form part, should otherwise be abandoned as a waste of time and money. They are obscuring the value of EPCs. This tax should be hypothecated so that tax take would go into the fund for making improvements to existing housing stock based on need. This fund should be administered by local authorities who are best placed to direct it. Energy companies should be required to contribute to these funds. Cash benefits to the Fuel Poor should be made from this fund until improvements to homes can be effected.

• Planning permission should be used as a tool to ensure that existing housing stock’s energy efficiency is improved. Landlords should be required to improve energy efficiency (insulation and cost effectiveness of heating system) in rented property, as should housing associations and local authorities. Planning permission should be relaxed to enable the uptake of microgeneration and the specification of smart metering should include export metering.

• Planning permission should require all extension work to have a high grade of insulation and no net increase in the cost to heat a home; general building regulations should be relaxed to compensate. Planning permission should not be required for renewables meeting certain criteria; the current system delays, prevents and discourages uptake.

• It seems ironic that VAT is 5% on both energy and energy efficiency expenditure. It should be reduced to zero for the time being on energy efficiency expenditure, including systems that provide energy usage information. VAT on fuel should steadily be increased by 1% per annum until it reaches the standard level.

• It is a folly to require any particular technology rather than the desired outcomes. It is far more important that energy companies are required to provide their customers with accurate, timely and sufficiently detailed information on energy use rather than to roll out smart metering. This information should be provided through multiple media to ensure that there is no digital divide and different learning styles are catered for. It should be recognised that different media suit different data.

• The following appliances are required by law to have energy efficiency labelling: refrigerators, freezers and fridge freezers, washing machines, electric tumble dryers, combined washer-dryers, dishwashers, lamps, electric ovens, and air conditioners. Energy consumption data should be clearly displayed on all electrical appliances and on their packaging at the point of sale. This need not rate them as the existing labelling does.

• Annual CO2 emissions reductions targets are required to set expectations from the domestic sector about the pace of change year on year between now and 2050 when CO2 emissions need to have been reduced by 80%.

Further measures
• The role of Ofgem should be more specifically and comprehensively defined. Ofgem’s superordinate purpose ought to be a responsibility to the customer. In relation to generation it should ensure that there is adequate capacity to meet demand (defined by the annual goals), that greenhouse gas emissions are minimised, and that generation is secure – the failures in this area are multiple: fuel fossil power stations haven’t been made to clean up fast enough, renewable generation hasn’t been built fast enough, we are late in encouraging nuclear, there has been no encouragement of micro and local generation, and we have failed to build sufficient new generation and storage capacity of any kind. In relation to the customer, Ofgem should ensure that prices paid are fair – this is the proper measure of a competitive market and not the level of switching. Finally Ofgem should review the industry structure to ensure that it is more competitive with a number of likely outcomes: an end to vertical integration – the separation of generation, distribution and supply; licences for regional monopolies to distribute with efficiency targets; the inclusion of metering in the distribution business; a lively and competitive supply market as part of a wider energy services offering – an offering that would be economically attractive given all the measures proposed in this manifesto.

• There should be a Universal Service Obligation imposed on broadband. Broadband is a data/communications utility like water and electricity and not just a medium for entertainment. As a return path for data to and from the home it is key to enabling consumers to have timely and accurate information available to them on a host of topics including energy usage.

• Legislation should set a date by which certain domestic appliances (including dishwasher, washer, tumble dryer, central heating) be fitted with methods that enable consumers to delay use, and remotely switch and set appliances.

• HIPs should be abandoned as being generally useless; a fact that is in danger of obscuring the value of EPCs.

• Energy displays should be included in CERT short-term. CERT specification should not require particular functionality for which there is not a good evidence base e.g. inclusion of £ on displays and requirement for re-chargeable batteries.

• CERT should not be continued in the longer term. It encourages energy companies to satisfice – to spend as little money as possible to obtain CERT points with no regard for effectiveness.

• Energy displays should be allowed by Ofgem as part of suppliers’ commitment to combat fuel poverty.