Delving into the ‘great green myth’

  • 12 Apr 2012, 11:30
  • Ros Donald and Robin Webster

The Daily Mail has a love-hate relationship with energy efficiency. Leaf through its money section and you'll find a five step guide to energy saving  alongside offers of a " free energy monitor for every reader", all in the name of saving the reader money. 

But move to the front section and you'll find a full-frontal assault on the Green Deal - the cornerstone of the government's plans to make the country's buildings more energy efficient (and incidentally reduce consumer energy bills). 

Under the Green Deal, homeowners will be able to borrow up to £10,000 to pay for measures such as loft insulation and pay back with an extra charge on their energy bills. The idea is that the money households save means they won't end up with higher bills at the end - a concept the government calls the ' golden rule'. But the Mail is, to say the least, skeptical, calling the scheme the Great green myth, or how an eco home can end up costing you thousands

Backed up by studies?

According to the article, three different studies suggest that the Green Deal will leave homeowners "thousands of pounds out of pocket" (which  the Telegraph has repeated almost word for word).

The first study - according to the Mail from the University of Bath - looked at savings from seven different homes after they installed energy efficiency measures.

The Mail says:

"One family living in a Victorian terrace installed ten separate improvements including floor and loft insulation, double glazing and solar heating. They were predicted to save £1,139 a year after spending more than £50,000 on 'greening' their house. The actual savings were just a quarter of that figure at £269. A 1930s semi expected to save £413 a year saved just £216." 

Although the research is on Bath University's website, two researchers from the rather un-Daily Mail Centre for Alternative Technology  in Wales carried out this work. They compared the houses' actual energy use and the savings they made after the efficiency measures were installed against the amounts which were predicted by the Standard Assessment Procedure (SAP) - the measure the government intends to use when it rolls out the Green Deal. 

The study found that the SAP accurately calculated savings for one of the households, overestimated five of the houses' savings and underestimated the savings made by one of the houses.

Table 2

The researchers also found an interesting complication: some householders kept the lights and heating on for longer periods after they had the building refurbished - meaning they didn't save as much as expected. 

Overall, the study suggests that the government needs to improve the  SAP and  better understand behaviour to make the Green Deal work. Perhaps more relevantly, the researchers also call for more research to be done on a larger number of houses that better represent the UK's average housing stock. 

According to the Mail, another study on 139 council houses in Sunderland found they saved 12 per cent on bills rather than the 19 per cent estimated by the SAP calculation. It adds: 

An official pilot study on 67 homes in Sutton, South London, found all of those who took the 25-year payback package rather than ten years - a third of the owners - faced repayments higher than the savings. 

Both of these case studies actually hie from the same piece of research, published by the Department for energy and Climate Change (DECC) in September 2011. The study encompassed five pilot Green Deal schemes, and examined what happened to 311 houses in all. 

The Mail's reporting of the Sunderland case study is accurate - although you might argue 12 per cent savings on bills still isn't bad going. The social housing company undertaking the pilot study in Sunderland anticipated a carbon saving of 26 per cent - the figure achieved was 18 per cent. Residents' average yearly energy cost was reduced from £890 per home to £784 - a cost reduction of 12 per cent instead of the expected 19 per cent. Overall, 65 per cent of its customers said they'd seen a reduction in gas and electricity bill due to the measures installed. 

But the results from the pilot in Sutton don't seem to square with the Mail's interpretation of them at all. In fact, "the 25-year payback period resulted in almost three quarters (72%) of the homeowners securing annual savings on energy bills in excess of the loan repayments." 

Those who chose the shorter payback period fared less well, but knew this would probably be the case. The majority of the pilot households signed up to the 10-year period, "despite knowing they would be reducing the likelihood of making their loan repayments lower than the fuel bill savings", the report says. 

All of the participants were offered "repayments that wouldn't exceed fuel bill savings", leading the study to conclude that the participants weren't primarily interested in lower fuel bills - a fact that makes it hard to judge the study based on savings alone. 

The DECC report carries a large health warning on calculating the savings households incurred. This is because the leaders of the five pilots were allowed to add up the savings but did so to different criteria, so their results were "very different" in some cases, DECC says. 

So what do the studies actually say? 

As you might expect, the results of these interesting but not exactly conclusive studies show there is likely some serious room for improvement in some areas - crucially in tightening up the SAP and engaging better with residents on how to get the best out of the deal.  But to read the Mail's carefully-selected nuggets of information - which either focus on the worst possible aspects of the results or just make outcomes up - you'd think the authors would be getting into line to call for the scheme to be scrapped. But then, when are these things as exciting as they're made out to be?

UPDATE 12th April 8.30pm: The article was corrected in response to the first comment below

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