As a leading HIP provider in Bristol you might not expect us to say this, but…

Killing off the HIP might be the kindest move in the circumstances.

They were born with a limp that they’ve never had the chance to shake off…

Why HIPs have never fulfilled their promise

Let’s start from the beginning.

The initial idea behind HIPs was to increase the speed and transparency of homebuying. Sellers would be deterred from speculatively marketing a property; buyers would benefit from fewer delays, less uncertainty and a reduced threat of gazumping.

All this was to be achieved by requiring the seller to provide an upfront version of what a buyer needs to find out later in the process.

Added in to that was the new Europe-wide requirement for an EPC — an energy performance certificate to advise buyers of running costs and potential energy efficiency improvements.

So where were HIPs struck with a limp?

The HIP that was originally conceived is different to the HIP that came into law.

Initially, the HIP was due to contain a Home Condition Report (HCR) — a basic version of a survey, detailing the condition of the property in everyday English.

Instead, today’s HIP is a watered down version that has never contained meaningful structural information.

For various reasons, the HCR was abandoned—and the result is a HIP that buyers simply don’t ask to see.

Leaving aside the complexities of the particular arguments over HCRs, when they decided to take structural survey out of HIP, they may as well have consigned the project to the scrap heap. A survey is more important than local authority searches to buyers.

This would have been a key driver for buyers asking to see the Home Information Pack.

Wait, don’t buyers benefit from seeing the HIP?

According to estate agents, buyers don’t even ask to see them. It’s simple to see why: the all-important part is missing. Without an independent assessment of the condition of the property in plain English, HIPs are irrelevant in buyers eyes.

Do sellers benefit from producing a HIP?

Again, no: they don’t assist in the marketing of a property. They contain reports that will be useful once both parties enter the conveyancing process, but there’s no way they can be used to promote a particular house or flat for sale.

Then what are HIPs good for?

Red tape. They’re packaging for an EPC, and a collection of searches that are legally necessary but by no means a marketing essential.

So you still need an EPC?

Yes. Killing off HIPs will just take the HIP back to its component parts. To market your home you will still need to get an EPC because that’s part of different legislation at a European level.

What will happen if they do kill off HIPS?

The cost of searches will be passed back again to buyers.

The cost of EPCs will still be a factor for sellers.

The housing market will go through a lurch as sellers wait for the requirement to be lifted.

Estate agents will be left with holes in their coffers after investing in the HIP process for 3 years.

And how about about all the VAT the Government will be missing out on when HIPs are no more?

Let me know your thoughts in the comments below.

Footnote: What should sellers do?

Even if there is a change of government by the end of this week, it may be some weeks before HIPs are phased out. If you need to market a property this month, Horizon can provide a standard HIP for £299, or you can take advantage of our unique offer of a £99 HIP in Bristol.

Of course, we’re a prominent HIP provider in Bristol — so we’re bound to be against it, right?

Not necessarily. The abolition of HIPs will be a blow but a move such as this could have much wider implications for the economic recovery, as you’ll see below.

Why do the Conservatives want to abolish HIPs?

They’ve always opposed the introduction of HIPs from the opposition benches, arguing that they add cost and bureaucracy to the housing market. So now they want the opportunity to kill them off.

However, it doesn’t look like they expect this promise to be much of a vote winner. It merits only one sentence in their manifesto:

We will also abolish Home Information Packs, which have made a significant contribution to problems in our housing market.

That’s all. It doesn’t define the ’significant contribution’, or the ‘problems’ — nor does it say whether any alternative measures are planned.

HIPs are not mentioned in the other parties’ manifestos, so it’s clear this is not a raging political battleground. Still, if the Conservatives are voted in on May 6th, what are the likely consequences if Home Information Packs are consigned to history?

Will abolishing HIPs harm, not help the housing market?

If the Conservatives thought the introduction of HIPs has cost the housing market money, abolishing them could backfire in the same way.

To see why, look back to what happened when HIPs were introduced. Vendors rushed to market their homes before the HIP deadline arrived. The market was then eerily quiet for a while afterwards.

The side effect of pledging to do away with HIPs is that many sellers will wait a month or so to market their homes without one, in order to avoid the typical £368 cost.

In other words, scrapping HIPs could impose another lurch in the housing market at a far more sensitive time.

What people don’t realise about HIPs…

Aside from whether it will rock the boat in the housing market, abolishing HIPs won’t make as much of a difference to sellers as the Conservatives are claiming. Here’s why:

1. HIPs don’t cost as much as politicians think

Conservative opposition to Home Information Packs was based on the cost of obtaining a HIP being a significant deterrent to vendors.

However, the Home Condition Report—the structural survey that would have accounted for most of the mooted £700 cost—was later cancelled.

Had this component been included, it would also have added much more meaning to HIPs and made them much more important from a buyer’s point of view. True, HIPs would have been more expensive—but also in my view a lot more successful (more on this in a future post).

2. You’ll still need an EPC

The only part of a HIP that’s new to the home selling process was the requirement to include an Energy Performance Certificate in the information provided to buyers.

Even if  HIPs are cancelled tomorrow  you’ll still need to get an EPC—they’re part of different legislation at a European level.

The rest of the paperwork still needs to be obtained anyway; HIPs merely moved this requirement from the end of the homebuying process to the beginning to try to speed things up a little.

Why cancelling HIPs won’t change what we see on the Horizon

Home Information Packs are currently the product that has to be wrapped around our domestic EPCs. However, the requirement for both domestic and commercial EPCs will stay even if HIPs are cancelled and as we all are feeling with the recent rises in the price of petrol the burden that fuel places on our budgets is steadily increasing. We are leading providers of EPCs throughout Bristol and the surrounding area and people are beginning to be a little more mindful of the information they contain. The EPC has always been our primary focus and this is why we are market leaders.

From our point of view, once the EPC has been delivered, the rest of producing a HIP is office work: putting together pieces of paper, administration. That’s why this piece isn’t exactly a rant at the anti HIP lobby; after all it’s hard to be passionate about administration, however, energy is a very different matter!

What do you think?

Are HIPs just a Tory bugbear? Would you keep them—or improve them?

Or will the pledge to scrap HIPs be a vote winner?

Since 2007, getting a Home Information Pack has been the first hurdle you have to clear before you can put your home on the market.

But nobody welcomes the cost of obtaining one. The typical price for a HIP on a 3-bedroom home is £368 including VAT, according to Which? Money*.

For a while, we’ve been looking for a way to provide a HIP at a much lower cost, to give a better deal to home sellers. Now, we can provide a standard Home Information Pack at an unprecendented low price of £99+VAT, just in time for the spring surge in the property market.

Here’s the good news as it launches…

How to pay only £99 +VAT for your Home Information Pack

To get the price of a HIP down to £99+VAT, we’ve embarked on a partnership with Bristol-based conveyancing solicitors Barcan Woodward.

Combining your Home Information Pack with a recommended conveyancing package lets you enjoy a far better cashflow through the process of selling your home (described below).

This also gets over the hurdle of finding a good conveyancing solicitor. Many sellers are looking for a recommendation on who can get their conveyancing done quickly, efficiently and in plain English. With this package, that’s one less thing to worry about.

Benefits of Bristol’s lowest-priced HIP

Easier cashflow when selling your home

For families selling in order to move house, the £368 typical charge for a HIP can come at a tricky time for cashflow.

After all, getting your home on the market is just the first step in the process of arranging a sale. You don’t see the proceeds until several months later — if your sale is successful. And if you end up taking your home back off the market, there’s no refund on the price you paid for your HIP.

Instead, with our £99 Home Information Pack, we’ve lowered the initial cost of marketing your home. You’ll only pay for conveyancing, along with other costs such as stamp duty, once your sale is agreed.

Speedy and efficient conveyancing

Our partner in this package is one of the best conveyancing solicitors in Bristol, Barcan Woodward.

They’re known for providing a speedy and efficient conveyancing service in a friendly and approachable style. Barcan Woodward’s plain-English approach and swift problem solving is exactly what you need during the legal process, so your sale will be in safe hands.

How is a £99 HIP even possible?

Providing you with a HIP for £99+VAT is only possible because of this conveyancing partnership.

After all, a Home Information Pack costs us more than that to produce. So we’re transparent about how we provide you with such good value. Here’s how it works:

Everybody needs a conveyancer, and many conveyancers pay a referral fee to somebody, somewhere in the process. It might be your estate agent, your mortgage adviser or whoever introduced the business. Either way, there’s money changing hands — and none of it ends up back in your pocket.

Instead, with our £99 HIP, Horizon receives that referral fee, and we pass it straight back to you in the form of a huge discount on your Home Information Pack.

Many home sellers aren’t aware that such fees are routinely changing hands as they go about a sale. We have decided that this might as well benefit you.

Two birds, one stone

After all, what are the two essential services every time you sell your home? You need a HIP to go to market, and you need a conveyancer to complete. Combining the two gives you massively better value, smooths out your cashflow and gives you a safe pair of hands for your property legals.

With Bristol’s best value HIP, we’ve lowered the main obstacle to putting your home on the market.

To order a Home Information Pack for £99+VAT, click here.

To view one of our Home Information Packs, click here.

Do you spot a few connections?

The similarity in name might be a coincidence, but we’re talking about Horizon House — the Environment Agency’s new corporate office in Bristol, which was recently awarded the highest ever BREEAM score for an office in the UK.

And the reason for mentioning it is that it perfectly illustrates a big win for the building’s occupiers that we’re happy to draw attention to: the huge upside in running costs to being in a sustainable office building.

The Building:

Horizon House is the Environment Agency’s new corporate office in Bristol. It occupies the city centre site opposite the Central Library (this map is still showing the previous building that was demolished).

It’s part of a mixed use development that also includes apartments and further office space, and is due to be occupied by the end of 2010. It’s bang in the middle of the city, and has been called a new milestone in sustainable design.

The Award:

The big deal about Horizon House is that it scored a superb 85% under BREEAM (the Building Research Establishment Environmental Assessment Method). BREEAM measures the sustainability of buildings, assessed across multiple categories: energy, materials, waste, water, ecology, pollution, transport, management, and health & wellbeing.

That’s the highest ever score for an office in the UK, with points spread across all the categories, including the harder-to-achieve ratings.

Euan Creswell, managing director of the building’s developer, Westmark, said: “We’re very proud of Horizon House – not only because of its highly sustainable features, but because it’s being delivered to a competitive budget in a city centre location.

“[The award] will help us spread the word that going green doesn’t have to cost the earth and can create city centre offices that are great places to work.”

The big win for the occupiers?

Aside from the fact these premises are an obvious fit for the Environment Agency, what will the current and future occupiers gain from moving in to Horizon House?

A lot more than a CSR halo or a badge of greenness. According to Graham Ledward, the EA’s Director of Resources: “By relocating to Horizon House, the Environment Agency will save around 10% every year on operational costs — an estimated £180,000 saving per year.”

How to make substantial cost cuts through environmental awareness

There aren’t many ways you can save 10% on your costs in business without resorting to P45s. Until there are more commercially viable buildings that also have the highest environmental standards, what can businesses do in the meantime?

Here are two suggestions:

1. Most of the savings at Horizon House will come about thanks to lower business utility bills, particularly from reduced use of electricity—and there are steps that any commercial building owner can take now to reduce their energy use.

Whenever we carry out a commercial EPC in Bristol, there are always great energy saving suggestions on offer. Of course, a weak point of EPCs is that the outgoing occupier rarely benefits from any incentive to make changes; any action on these recommendations is usually left up to the incoming occupier. However, as demand for sustainable spaces increases, a good EPC score may be higher up the wishlist.

2. There’s also the renewable electricity feed-in tariff, a way for small-to-medium-sized businesses to make money generating their own energy. Typically, but not always, this comes from solar electricity (an important feature of Horizon House).

To make a saving you first need to spend a bit on installation, but the feed-in tariff pays you back per unit and over 20 years this can offer a tempting return on investment.

Is this the future we see on the Horizon?

It’s easy to be impressed with Horizon House, an achievement that points the way for a new wave of commercial buildings that will save you money.

And we’re not cross at them for borrowing our name, really. Instead, perhaps we’re a little envious of all that low-cost sustainable energy…  perhaps we’ll simply move in there one day?

The pilot must have been considered a success, because the Government has now announced plans to roll out this scheme nationally.

If this does happen (and it’s a big if, with primary legislation needed and a general election in the way first) it could be a real positive step: a serious attempt to solve the problem of funding the massive retrofit UK homes will need in order to achieve lower CO₂ emissions.

However, the way I see it, they’ve made a major blunder in how the scheme has been devised…

Pay As You Save: the good points

There are so many reasons to like this scheme.

First, this is a scheme to improve existing housing stock in a joined-up way, which is badly required. After all, new buildings have strict efficiency codes built in; it’s all our older housing that represents the big environmental challenge. As things stand, we could carry out EPCs and home information packs on every home in Bristol but they will only tick the boxes: there’s no process to take the suggested improvements forward.

Second, the retrofitting proposed under this scheme will take a ‘whole house approach’ to making existing homes more energy efficient. The shortcoming of many energy efficiency schemes is that they take a piecemeal approach (case in point: there’s little benefit upgrading your boiler if you haven’t insulated first).

Third, it’s a serious attempt at solving the problem of how to pay for it. With the average home likely to cost £10-15k to sort out, these whole-house improvements will never happen without some financial help. The scheme proposes that the work will be funded through long term loans attached to the property, repaid through savings on heating and electricity in due course (hence ‘Pay As You Save’).

All in all, this scheme should be highly backable. However, there’s a significant devil in the detail…

Where’s the independent assessment?

Despite extensive consultation and assurances to the contrary, there will be no independent assessment of the homes to be retrofitted. Instead, we’re getting salespeople.

Rather than assessing homes through an independently gathered EPC, the Government appears to have bowed to lobbying from the major energy companies who will send in their own assessors. This pushes DEAs to the sidelines and creates a new, separate role called the Home Energy Advisor (HEA).

The crucial factor is the loss of independent input. HEAs will be employed by the energy companies, who in turn will profit from the work they identify to be carried out. This means HEAs will identify retrofitting as a sales opportunity, which homeowners can then be persuaded to fund through borrowing.

The two winners — and the big irony…

Two big winners here will be the large energy suppliers, who will suddenly have a new profit line to exploit, and the finance houses providing the loans.

And the big irony in this? It presents a way for utility companies to get back a lot of the money that was levied on them to improve energy efficiency in the first place.

For example, under the CERT scheme, utility companies have paid into a fund for energy-efficient home improvements. Under Pay As You Save, since they’re the ones doing the retrofitting, these companies will be given a green light to get this money back at a profit.

What do you think?

I would like to be cheering this scheme on, for all the good reasons listed above.  Pay As you Save could open doors for the extensive retrofitting the UK needs to reduce its fossil fuel dependence.

But overlooking the need for independence in the assessment process was a big mistake. Utility companies will be getting ready to sell green home improvements on finance, at a nice profit. The scheme still offers a chance of a more energy efficient Britain, but instead of being overseen by independents, it’ll be delivered through salesmen.

From April this year, a scheme will be launched that encourages British homes and small businesses to generate renewable electricity by paying you to produce it.

That means paying you for every unit you produce, up to 5 MWh a year — even what you use yourself.

It makes £0 energy bills a reality, and turns solar panels and wind turbines into an investment that can potentially generate you an 8% return.

“Clean Energy Cashback” is what Ed Milliband calls it. It’s not a new idea: elsewhere it’s called a Feed-In Tariff, and has boosted wind and solar electricity production in Germay, Spain, Denmark and elsewhere. Many said it wouldn’t happen in the UK: with 63 other schemes in place worldwide, we’re playing catch-up. But a look at the plans reveals that we’re getting a scheme with a few differences.

So let’s look at our new way of selling energy to ourselves. Is it good for homes, for businesses, and if not, why do we need it?

First, some basics.

What is a Feed-In Tariff?

Feed-In Tariffs (FITs) are a way to encourage low-carbon electricity to be generated by users.

They work by rewarding your upfront investment in renewable generation technology by paying you back for each unit you produce.

Yes, you get paid even when you use it all. When you make surplus electricity, you can sell it to the National Grid at a slightly higher rate. When you don’t produce enough, you can still use grid electricity produced elsewhere.

Why are feed-in tariffs necessary?

They’re necessary to make renewable energy growth happen.

Whereas fossil-fuel and nuclear power need large centralised plants to feed the grid, renewables are the opposite. The most obvious renewable resources, wind and solar energy, are spread out. You need a network of small producers to capture it all.

By incentivising those of us willing to invest in clean energy, and providing a way to interconnect our production capacity and store the surplus, it solves a national problem of how to produce more clean energy. On a technological level it works too, because renewable energy needs to be stored. Batteries aren’t feasible on that scale, so where better to store it than the National Grid?

You could compare it to the Internet and cloud computing: many small users forming an interconnected two-way network with huge power.

British feed-in tariff: particulars

Our “clean energy cashback” scheme will be introduced for qualifying renewable electricity generation from April 2010. Here’s a rundown of what we know so far:

• Install a qualifying system:
• solar PV, wind power, hydro power or anaerobic digestion biomass, with a capacity up to 5MW, or
• a domestic CHP (combined heat & power) plant up to 2kW capacity
• Earn a guaranteed rate of payment for all generated electricity
• Earn an optional guaranteed export price for surplus electricity sold to the National Grid.

There are differing bands of payments, depending upon the technology and installed capacity, of up to 36.5 pence per kWh. An additional 5 pence per kWh could be paid for any surplus exported to the grid.
» View the tariff details (downloads a .doc file)

Small businesses: how does a zero electricity bill sound?

Since the scheme allows capacities up to 5MW, this should appeal as much to businesses as to domestic customers.

The eye catching part is the opportunity not just to weigh the savings on electricity bills against the
The feed-in tariffs would be payable for 20 years (25 for solar), which in theory should give you a return on investment.

Questions:

There are lots of questions to tie up before the launch, though. Here are some of mine:

• Will the return on investment be high enough for businesses to consider the upfront cost?
• Will we need two meters? This means paying tax twice (VAT on power in, Income tax on power out) compared to using one (net metering)
• Will the cost of technology come down as the scheme gets going, benefiting those who wait — or will the incentives decrease over time, as they have done elsewhere in Europe, benefiting the early adopters?

Now, it’s getting a bit more serious. There’s a law change on the way, with tougher penalties and easier triggers on the way. And there really isn’t long to comply (although it’s not as bad as… see bottom of this post…)

Compliance on commercial EPCs is amazingly low

For a whole year now, it’s been a legal requirement to have an EPC available on any commercial property for sale or rent. So everybody must be doing it, right?

Well, according to the NHER’s report, there’s plenty of “anecdotal evidence” from assessors that not everybody is. Far from it. As shown by research carried out by Quidos, compliance on commercial EPCs could be as little as 17%.

Fast-track changes to the EPBD

That’s all set to change with the news this week that the EPBD…

the main Community legal tool that provides for […] effective improvement of the overall energy performance of buildings

…is due for a fast-track update. Details are still being finalised, but agents in breach of their EPC responsibilities will face stricter fines and more likelihood of penalties.

This will impact on agents in several ways, not just the ones who are already lax in getting their commercial EPCs in place.  No agents want Trading Standards Officers peering over their shoulders – it’s bad for business even if they are squeaky clean. So an increase in across-the-board compliance is in everyone’s interests.

First… how bad is current EPC compliance?

Point of law: all commercial buildings being marketed for sale or rent should have an EPC available to inform prospective buyers and tenants about the energy performance of the building.

However, in research carried out by Quidos (no direct link to the report available, although ask me and I’ll forward it), the number of lodged commercial EPCs compared to the number of commercial properties advertised for sale in Bristol, Bath, Wiltshire and Cornwall was between 17% and 27%.

Agents in Bath (26.75%) fared a lot better than those in Wiltshire (17.39%), but when that still leaves nearly 3 out of 4 commercial properties on the market without an EPC, that’s not saying a lot…is it?

Why aren’t more agents compliant?

Mainly because nobody thinks the buck stops with them.

Using a mystery shopper approach, the NHER decided in June 2009 to find out why so few agents could offer a commercial EPC when asked:

• Almost half (47% – 41 agents) said they believed an EPC was not necessary, or that they just didn’t know.
• A further third (36% – 32 agents) said that they would only get an EPC at the point of sale.
• 17% (15 agents) said that they believed the EPC was in the process of being undertaken.

Response 2 suggests ignorance of the precise rules, i.e. that an EPC should be available from when the property is first marketed. Responses 1 and 3, though, highlight the main underlying cause of the lack of EPC compliance: the belief that it’s someone else’s issue.

How will the EPBD update change this?

The update clarifies that the agent is responsible, and makes two new provisions:
1. Anyone — i.e. Trading Standards Officers as well as potential purchasers — can ask to see the EPC

2. Increased penalties: a full 12.5% of the rateable value, much higher than before.

So now, a “forgotten” commercial EPC means what?

A fine worth avoiding; an unwelcome trading standards spotlight on the agency; and all for lack of a certificate that’ll be valid for 10 years anyway.

When’s the new law coming in? 

Feburary: it’s being fast-tracked as I write.

That leaves just a few weeks to comply if you don’t want Trading Standards nosing around.

Thankfully though, that’s neither as brief nor as bad as this Robocop moment.

An example of a boiler that could be scrapped

A good start to the New Year: the Energy Saving Trust is rolling out the Boiler Scrappage Scheme announced in the pre-budget report. This is one of the NHER’s key recommendations to the Government, so it’s good to see things moving quickly.

The aim is to improve Britain’s energy efficiency, to save people’s energy bills, and boost the gas fitting and boiler manufacturing industries. Three birds—one stone.

Although as you’d expect, the scheme is not perfect: it missed a chance to make better use of EPC assessors, and it could be open to a touch of abuse.

First the good bit:

☺£400 will encourage people to act on EPC recommendations

Boiler replacement is recommended in 63% of domestic EPCs. It’s one of the most common recommendations we make, and one of the biggest CO2 savers.

But it’s also one of the more expensive home improvements, which is why many landlords and homebuyers opt to soldier on with old, wasteful boilers until they break down. They needed some incentive to replace the G-rated horrors sooner rather than later.

Now, thanks to the Reheat Britain campaign^†, they’ve got it. The Boiler Scrappage scheme gives £400 cashback on getting a G-rated boiler replaced with an A-rated model (or a renewable heating system, for example a biomass boiler, which could deliver even greater cash and emissions savings).

Here’s a typical cost / payoff breakdown:

• A straightforward boiler replacement costs on average £2,500, according to the HHIC
• A family sized home should then start saving £200 a year on gas bills, which would normally mean pay-off within 121⁄2 years
• With an additional £400 cashback, this shortens the payoff time to 101⁄2 years

I’m expecting a lot of property owners to take this up, if for no other reason that they would eventually have to do so anyway—there’s no word yet on how long the scheme will run for, but you’d be disappointed to miss out on what is effectively a 16% discount.  And for Horizon, it means that every time we write this recommendation on our EPC reports there is an increased chance it will go ahead.

All good so far… However, there’s a downside I can see:

☹ No independent assessment means the scheme can be abused

There’s a flaw in the Energy Saving Trust scheme: it relies on householders and installers to decide for themselves whether a boiler really is eligible.  This means identifying it as G-rated, and (unless the owner is over 60) making sure it is in working order.

Without independent assessment, this scheme’s open to be taken for a ride because both parties have something to gain for being ‘creative’. Is there any other party who independently could tell whether a boiler really is G-rated and in working order?

EPC assessors, of courrse!  Just ask OFGEM, the energy watchdog, which runs the CERT funding scheme (domestic energy suppliers subsidising home energy efficiency work in order to meet a CO2 reduction target). Under CERT you can also replace an old boiler, but OFGEM felt that it was

❝ extremely important that the identification of G-rated boilers to be replaced
be conducted by an independent party. The best way to achieve this is through
EPCs.❞ [source: ofgem pdf]

The government clearly differs from its industry watchdog on this, as the Energy Saving Trust scrappage scheme will accept the signature of “the competent person you have asked to install your new boiler”—in other words, someone whom the scheme is designed to benefit in the first place.

Since two of the three purposes of this scheme are

1. to lower householders’ heating bills
2. to reduce CO2 emissions,

why not carry out an EPC as a way of checking eligibility?  It adds more value than just an independent voice: an EPC assessment would also give homeowners recommendations on other energy saving measures, pointing them in the direction of cost saving insulation and grant funding that they might not otherwise be aware of.

So, a missed opportunity.

All in all, is the boiler scrappage scheme brilliant or flawed?

We’ve had lots of CERT-inspired initiatives like insulation grants and distribution of low energy lighting, but since CERT is down to energy suppliers acting under obligation, they tend to go for the easy wins (which even includes just doling out advice such as turning off equipment on standby).

The boiler scrappage scheme goes for one of the tricker (i.e. higher cost) measures. Boosting big-ticket measures for home energy efficiency was always going to be one of the harder things to get right, so overall I’d applaud the Government for going for it.

Meanwhile, let’s hope the potential for fraud won’t be too glaring a weakness for the scheme: most people will act honestly. As for the missed opportunity for carrying out EPCs: the scheme has only just launched, perhaps the Energy Saving Trust will revise its procedures once things get underway, but in the meantime we’re doing our best to spread the news about energy efficiency funding measures through this site!

Action: how the boiler scrappage scheme works

If you’re convinced to go ahead with a replacement, here’s what to do:

1. Check that your boiler’s on the eligible list
2. Get a Gas Safe registered fitter round to quote on replacing your boiler with an A-rated alternative
3. Register for your £400 cashback voucher with the energy Saving Trust
4. Get the work done within 12 weeks of the voucher arriving
5. Pay the bill, then send off the voucher plus the bill: you get £400 cashback

Exterior solid wall insulation will lower residents' heating bills

That’s what residents of Rawnsley House in Bristol are getting. The entire block of flats is being clad with heat-saving solid wall insulation – and it’s arriving just in time for the coldest months of the year. Our EPC show how valuable this Christmas wrapping could be.

The giver is none other than their landlord, Bristol City Council (how many of us are expecting Christmas gifts from our landlords?) And unlike some energy efficiency measures, this one’s very visible: you can really see what you’re getting (see photo below)…

Christmas wrapping for council tenants

OK, so it’s probably not just a splurge of seasonal generosity. Rawnsley House is the latest of many council properties in Bristol to receive an energy efficiency upgrade. It probably doesn’t have a lot to do with making it easier on residents’ wallets. It doesn’t even have much to do with reducing CO₂ emissions.

It’s mostly because the Council needs to get 100% of its homes meeting the Decent Homes Standard by 2010. One of the four components of that standard is thermal comfort, meaning that properties need their insulation brought up to scratch.

So far, they’ve made good progress towards this goal. In April 2004, 59.8% of Bristol council homes met the Decent Homes standard; in April 2009, this was up to 93%.In the thermal comfort category, they’ve achieved this by first going for the easiest and most obvious improvements: loft insulation and cavity wall insulation across thousands of small homes (the low-hanging fruit, you might say).

Now it’s time to tackle the remaining 7%, including big projects such as the high-rise housing blocks (the high hanging fruit?)

These required a different solution. Blocks of flats like this already tend to be more efficient than small homes. Heat loss through floors and ceilings – two of the areas we examine for an EPC – can be discounted in all but the top and bottom flats. These blocks have one main weakness: solid exterior walls, which are no good unless insulated.  A solid-wall building takes a bit more work to insulate than cavity walls: you can do it internally, or in this case, get outside and clad it…

The 100mm thick insulating panels are applied directly to the flat's exterior walls

There are four main reasons why I’m writing about this.  Believe it or not, it isn’t just because of a tenuous link to Christmas…

1.Solid wall insulation works

Not just because it’s visually rewarding to watch the cladding go up – there’s more to this than pretty pictures!

Rawnsley House provides a great “before and after” example of the efficiency improvements brought about by exterior cladding. Bristol City Council works with Horizon exclusively to carry out its EPCs, so we have some actual figures to go on, based on our assessments of the premises:

Before: solid walls, no cladding

The building would and could only rate "D" before the insulation was added

At this point, the estimated heating costs are £378 a year, and the estimated  carbon dioxide emissions 3.8 tonnes per year. Now compare that to an EPC carried out on one of the flats after cladding was completed…

After: solid walls with exterior insulating panels

This raises the potential score to a "C"

Solid wall insulation has changed the game significantly: the estimated heating costs have plummeted to £220 a year, and the estimated carbon dioxide emissions to 2.6 tonnes per year.

Multiply these figures out by the 99 flats in this particular block and you can see how significant an effect this measure will have:

• CO₂ emissions for this building will be reduced by 119 tonnes year on year
• The reduction in heating costs benefits each resident personally – see point 4 below.

The installation is cost effective too. The payoff with solid wall insulation is usually within 8 years, which is quicker than installing an A-rated boiler and a lot quicker than converting to double glazing.

2. Retrofitting is an urgent necessity

The government has committed us to a rapid improvement in the energy efficiency of new build homes. However, in terms of meeting our CO₂ emissions targets, improving our existing buildings is going to be far more important.

We’re only going to achieve this if we take retrofitting seriously. According to the DTI, by 2050 two thirds of the total emissions from household energy will be derived from houses already standing. Amidst all the focus on new building standards, our existing housing stock is like the elephant in the room (for more on this, read Martin Hunt’s special report “The Future Is Retro-Fit”).

Like the council, we need to prioritise the easy, big wins such as fitting insulation where none (or inadequate measures) exist.

3. It’s the public sector showing the way

I recommend this sort of improvement in EPCs, but homeowners in the private sector rarely carry them out.

Councils have a statutory requirement to act, but private households and landlords are going to need some kind of incentive. Fortunately, Rawnsley House gives us a great example here of the benefits of acting on your EPC recommendations. Perhaps it won’t be long before the Government introduces measures to encourage the private sector to catch up.

4. Cash back!

Never mind the CO₂ for a minute, check out the cash benefits for the residents. Although it wasn’t Bristol City Council’s main aim, a nice side benefit for the residents is that it will also save them a chunk of their annual electricity spend.  This is where the Christmas present bit comes in.

In the illustration above, each resident is set to save £158 a year, or just over £13 a month, on their electricity bill. It’s the most straightforward reason why people should act on their EPC recommendations: it saves them money, now and in years to come.

So… does this count as a Christmas present?

Yes, of sorts: the residents haven’t had to invest in the insulation themselves, and they’ll be delighted to see those savings materialise in 2010.  They’ll be wishing the council a Happy New Year!

But there are other reasons why this fits with the season of goodwill. Retrofitting insulation is a smart move for CO₂, and one that needs some publicity. The very visibility of Rawnsley House’s Christmas wrapping should spur on other building owners to retrofit their buildings.  And if it isn’t too cheesy to say so, won’t that be a Christmas present to us all?

(Have a good one yourselves!)

They’re all set to negotiate on committing our various nations to new carbon reduction targets, so of course they’ll be primed with months of research, projections, feasibility studies and so on.

But if world leaders were to get to the Danish capital a few days early and have a nose around the country that’s hosting the summit, they’d pick up a large number of clues as to what they could be doing already.

It’s no accident that Denmark is the host for these negotiations.  The Danes have been pretty focused on energy reduction since the 1973 oil crisis, and having upped the effort further in the last decade, there’s plenty of progress to put on show.

Danish lessons…

So before the Copenhagen delegates start haggling over CO² targets, here’s my rundown of five “Danish Lessons” world leaders could learn from the the country hosting the summit.

Lesson #1 – Get some political willpower

In other words: the balls to follow up good intentions, make tough decisions and keep the momentum going.

The Danes used to have an energy diversity problem.  They relied too much on coal and imported oil — the 1973 energy crisis woke them up to that.  They also used to have one of Europe’s worst per-capita CO² emissions records: 13 tonnes of CO² per capita in 1980.

But boy, have they done something about it. Their energy policies have cut dependence on imported fossil fuel. They’ve cut overall dependence on oil by 8% since 1990. They’re now more than self-sufficient in electricity production.

And there’s very little about their situation that couldn’t be imitated in other northern European countries. The turnaround has come from long term investment in renewable energy and from innovation that has driven, not hampered, economic growth.

A lot of the impetus has come from a powerful government ministry, Miljøministeriet, that gives policies the right kind of firm push—be that incentivisation or taxation, subsidy or regulation.  Successive governments have resisted the temptation to mess with the ministry; instead, they’ve let it drive policy effectively.

Unlike most other countries, Denmark never forgot the lessons of 1973, and kept driving for greater energy efficiency and a more diversified energy supply. Other countries could follow their lead by setting high environmental standards for business and at the same time encouraging the right kind of energy use through subsidies and tax breaks.

And they’ve done all this without nuclear power…

Lesson #2 – Join up your energy policies

In 1988, two years after Chernobyl, Denmark introduced ban on the construction of nuclear power plants. Removing this option meant a serious pursuit of renewable alternatives: hydropower, biomass, and wind energy in particular (see lesson #3).

The clever bit is how they’ve joined up this power generation initiative with other economic policies to foster a complete shift towards both energy self-sufficiency and falling CO² emissions.

So far, the shift has been radical enough to generated a trade surplus. Denmark’s the only EU country that’s self-sufficient in electricity: in 2007 they generated over 130% of their needs, exporting the extra. When renewable energy becomes such a large part of the picture, CO² targets aren’t so hard to attain.

Another innovation: generating electricity and district-level heating together from combined heat and power (CHP) plants.  Or, as the Danes call them, “Varmeværk” – meaning heat factories (a bit more catchy, perhaps).  This is really two innovations in one: first, if you’re burning something to generate heat, why not generate electricity at the same time?  In 2007, over 50 per cent of Denmark’s thermal electricity was generated in combination with heating.  Second, district level heating is much more efficient than individual boilers: these kind of installations have helped cut heating per m² by 29 per cent from period 1980 to 2003.

The lesson is to get today’s forward-thinking policies all working together in one big picture, not keep holding on for a magic solution (biofuels? No). Denmark’s example is that they haven’t just toyed with good ideas, they’ve been running with them for years and have concrete figures to show what benefits are possible.

Lesson #3 – Go with the wind!

Wind has single-handedly provided the increase in Denmark’s electricity generating capacity since 1997. It now provides around one-fifth of total electricity supply.

This progress didn’t just sprung out of virtuous greenness: it’s been driven along by an economic goal of developing Denmark as a leading centre of competence for wind power.

Along the way, wind turbines have gained social acceptance, not least because they haven’t been foisted on unwilling rural communities. Quite the opposite – they’ve been implemented mostly by co-operatives rather than corporations. Residents and local businesses club together to fund, install and benefit from small-scale wind farms; each wind turbine co-op issues shares to its members, and the payoff comes when they start selling their surplus energy back to the grid.

This lesson is spot-on for the British Isles: Denmark has no more wind than we do. Most of England and all of Wales has a similar windspeed to the Danish mainland; Scotland beats the lot.

Lesson #4 – Make green technology into an economic powerhouse

If you’re going to have to innovate in energy efficiency, why not make a growth-driving industry out of it?

Denmark has encouraged environmental enterprises, and the sector has been a hit both at home and in the export markets. Denmark currently exports more than £5.5 bn in eco-efficient technologies, of which £4.7 bn is in the energy sector. As the word looks to wind power, the Danes enjoy a market-leading position: 40% of world’s turbines are Danish.  It doesn’t stop at that: Danish companies also lead the way in thermostats, heating pumps, insulation and glazing.

The lesson is that environmental progress can be a boost, not a brake, to economic growth. Over the years they’ve made eco-efficient technology a Danish stronghold; now, as global demand grows, they can capitalise on their expertise.

Lesson #5 – Prioritise better building design

Of course I’m going to talk about buildings sooner or later!

Take a peek around a Danish building site and you’ll see evidence of thoroughly energy-conscious design practice.  They are also pioneering carbon positive homes: i.e. ones that create more energy from renewables than they consume, and can feed it back to the grid.

Why are they further ahead with all this than we are?

One reason: bold low energy requirements introduced with building regulations in 2005. At first there weren’t the components available to make this happen; however, the requirements encouraged building materials manufacturers to refocus their efforts, and now low-energy alternatives are available.  The first benchmark for progress arrives in 2010, the second in 2015, and the construction industry is rising to the challenge.

Another reason is a different culture of building design. Danes prize good insulation and triple glazing; draughts are minimized, and heating and ventilation work better at a whole-building level. Generally, energy conservation is something they take pride in, and have done for years.

Buildings have not only a large impact but also a long-term one that can impair progress towards CO² targets. Once again, Denmark is ahead of most countries in taking care of the carbon. I don’t have a statistic to prove it, but I think it’s a fair bet many more Danish buildings would get a high EPC rating that would most of the homes and commercial buildings we assess.

Probably the best energy efficiency in the world?

Possibly.

There are other countries with lower CO² emissions, and there are several blots on Denmark’s record (we haven’t even mentioned transport or shipping, for example).

But they’ve certainly lined up the green demands and the economic demands.  Here’s one way to measure it: Denmark achieves more GDP per watt than any other member of the E.U.

They’ve taken courageous decisions early in the game – something the COP15 delegates need to be willing to do.  They’ve avoided the nuclear route, given lasting government support to renewables and already cut the CO² in a growing economy, all as if to prove to the others that yes, it’s possible.

Perhaps the most important Danish lesson is that it mainly comes down to motivation. According to Søren Hermanson, the driving force behind the country’s biggest community wind farm, ”To us, going for lower energy use is like a sport”.  With 98 world leaders on the visiting team, and a sustainable economic future at stake, it’ll be interesting whether they can step up their game.