Ed Miliband's carbon neutral homes pledge in peril

Developers may be willing to pay the price and shun a demand that new homes must be carbon neutral by 2016
Andrew Stone
If Ed Miliband, the energy secretary, is to be believed, by 2016 every new home built in Britain will be carbon neutral. It’s a laudable goal, but even compared with the highly ambitious targets that have become so typical of the march toward Britain’s “green revolution”, it is a tall order.
The building industry has issued a fresh warning that the plan poses a greater danger than a few missed targets. Fewer new houses will be built, price rises will make new developments too expensive for aspiring homebuyers, and a recovery of the sector will be hindered.
Britain is one of the worst countries in Europe for energy efficiency. The government’s zero-carbon goal is the most ambitious in the world and it falls on the still-struggling housing industry to lead the way. Not surprisingly, support among property developers is lukewarm.
According to a recent survey from Loughborough University’s civil and building engineering department, construction firms would rather pay fines for not meeting the new targets than risk losses on developments for which there may not be a market.
“There’s a danger this is going to be a barrier rather than a stimulus for the market,” said Mohamed Osmani, a lecturer at the university who commissioned the study.
The problem, industry argues, is that making new homes energy efficient — kitting them out with gadgets such as rooftop turbines, solar panels and cavity insulation — could add up to £40,000 to the price. How much of that the government will subsidise, and which technologies will work best, is still unclear.
“There are no benchmarks or data and builders have a problem believing in the potential of clean and renewable technology to achieve these goals. If there are not enough financial and technical incentives, they will prefer to absorb financial penalties rather than implement the new standards,” said Osmani.
The industry is also concerned that without an established market for carbon-neutral homes, mortgage providers may baulk at lending against houses that appear to be more expensive than less energy-efficient homes of a similar size.
Britain is trying to do something that has taken others decades to achieve. Casey Cole of Fontenergy, which helps developers create low-carbon energy-generation projects, said: “Denmark’s reaction to the oil crisis in the 1970s was to move away from gas and oil towards community-owned district heating — combined heat and power networks that move the heat from incinerators and power stations. We are starting 20 to 30 years later.”
Builders questioned in the Loughborough survey found the timescale too ambitious. “The study showed they believe these standards could be achieved — but not by 2016. A more realistic date for designers and housebuilders is somewhere around 2021 to 2024,” Osmani said. The slump in the housing market has further complicated the situation.
Nicholas Doyle, project director of Places for People, one of Britain’s largest housing associations, said the upshot could be a bottleneck in the supply of new homes at a time when demand will be climbing back to pre-slump levels.
“The challenge is how to pay for this and not have an impact on the number of new starts,” said Doyle. “We cannot afford to slow down the number of new homes built. Housing demand has not gone away. There is still a growing population and limited supply.”
It is also unclear what cocktail of technologies and building techniques will work best. But with 2016 looming, some housebuilders could be forced into commissioning sustainable power-generation projects that pose unknown technical, commercial and legal challenges.
Cole said: “Developers are used to putting in gas fittings and walking away, but things are more complicated when you provide heat or move renewably-generated energy.”
What is certain is that the government will have to play a big role in creating the right financial incentives. “The provision for feed-in tariffs in the energy Bill last year could offer a long-term and reliable source of revenue,” said Doyle. “There’s a role for government in facilitating the delivery of this. We need it to help funders come on board to create these funding mechanisms.”
It is in the government’s interest, after all: fostering a green building industry would help achieve its lofty goal of creating 400,000 jobs in low-carbon sectors. Some fear, however, that the 2016 standards could even make new housing less sustainable overall. The focus on making each housing unit carbon neutral may lead to lower-density developments that use more greenfield space and encourage more car use, said Aurore Julien, at Llewelyn Davies Yeang, an architectural practice.
“The new standards may have contradictory consequences,” she said. “They will be easier to achieve for greenfield developments with low density that have more roof space for solar panels and wind turbines. Are these developments in the interests of sustainability? Maybe the target should be more to do with high in-built energy efficiency.”