Wednesday 20 June 2012

Less is (worth) More – Why House Builders should be Selling Sustainability

“Housebuilders could make more money if only they properly sold the lower running costs of new homes to their customers.”

So says a recent report from the influential NHBC Trust, Today’s attitudes to low and zero carbon homes, which shows how house-builders are losing out because they lag behind their customers in their views on energy efficiency and renewable energy.

It’s an impressively thorough piece of research, based on a large number of interviews with the general public and group sessions with occupants of new and low-energy homes.  The report is full of information on current attitudes and views towards energy efficiency, renewables and buying homes.  Knowing that all readers of the solarblogger are important and busy people, who might struggle to find the time to digest the whole 130 pages, here are some key points from the report.

Energy Matters

People are becoming more and more aware of energy costs and their impact on the environment.  Fully 96% of people surveyed said that their energy costs were important to them, 65% saying they were very important.

Surveying people who had moved into new homes, an overall majority said that the energy efficiency features made the home more attractive.  Those living in homes that had been built to a higher level of energy efficiency placed even greater emphasis on this.

People will pay

The house-building industry has been so concerned about the additional costs of building to higher levels of energy performance, it is missing out on an opportunity.  The survey indicates very strongly that energy efficiency does influence people's buying decisions.  Rather than seeing energy efficiency measures as a costly inconvenience, house builders could turn this on its head and promote the benefits to prospective customers.

Energy efficiency was the equal sixth most important factor in choosing a home to buy or rent.  Although location, number of bedrooms and other traditional factors achieved higher scores, energy efficiency still achieved a score of 3.7,  with 1 being not at all important and 5 being very important.

One of the most surprising outcomes from the study is illustrated in the chart below.  When asked the question "If the price of an energy-efficient home were £10,000 more than another similar home that was not so energy-efficient, but it offered to save you £750 a year on your energy bills compared to the other home, would you consider paying this?", 69% of people said yes.

The chart also shows the breakdown by age group, with younger (first time) buyers being more likely to be attracted to an energy efficient home.  However, in all age groups the majority would consider paying more for a home that saved them on energy bills.

It is possible that the forthcoming Green Deal will make the value of energy efficiency even more evident to people.  The cost of insulating a solid wall property to achieve performance approaching that of a new home is around £12,000.

People Place More Value on Familiar Technologies

Solar panels (both solar heating and solar electric) and low-energy lighting are the energy saving features with the highest awareness among buyers - 84%.  Awareness falls quickly for other energy generating technologies such as heat pumps - 31% and mechanical ventilation with heat recovery (MVHR) - 17%.

High awareness feeds through into desirability (with the exception of wind turbines).  The chart below shows which eco-features are the most likely to make a new home attractive to a potential purchaser.

Tips for Marketeers

1. Avoid confusing terminology 

People overwhelmingly preferred the term Energy-efficient home to Eco-home, Zero-Carbon home or Green home. Green or Eco was thought to convey the impression of alternative, ultra-modern home with non-traditional materials. Zero carbon causes doubts whether anything can be truly zero-carbon.

Confusing or Negative Associations
More Positively Received
Zero-carbon home
Green home
Energy efficient home
Draught-free and warm
Grey water recycling
Waste water re-use for toilet flushing
Biomass boiler
Wood chip/pellet burning boiler
Mechanical Ventilation and Heat Recovery
System for introducing fresh air from outside while retaining the heat from expelled air
Solar Thermal
Solar heating
Solar electric

2. Emphasise the energy savings

The survey found that people were motivated towards energy efficiency mainly for the positive impact it has on their household finance.  Protecting scarce resouces came second and helping combat climate change came a distant third.

Marketing should emphasise the financial benefits of living in a new home relative to other choices, with simple comparisons that make the savings clear.

The survey showed that people are confused about the sources of CO2 emissions, with many not rating energy use in homes in the top three sources.  Industry, cars, planes and even livestock were often selected ahead of homes. If people were aware that housing accounts for 30% of energy use and more energy is used in housing than in industry, road transport or aviation, this might influence their buying decisions.

3. Choose visible technologies 

A home with visible technolgies such as solar panels gives the sales team a hook on which to hang the many other features (such as higher levels of insulation and draught-proofing) which are not so evident to a buyer viewing a property. 

4. Choose technologies to meet targets that buyers find attractive

Some technologies clearly are more attractive to buyers more than others.  The cheapest option for achieving compliance with building regulations may not be the most attractive to prospective buyers.  Homes with more attractive packages of energy efficiency technology may sell more quickly or achieve higher prices than those that are simply cost-optmised to meet regulations.

5. Consider offering enhanced efficiency as a cost option

When selling off plan it is common to offer better kitchens, or bathrooms or other features at an extra cost.  Why not give the customer the option to increase the energy efficiency of their home beyond regulations to lower their bills further?  For example, meeting regulations with a solar heating system, but offering the option to add a solar electric system alongside.


"People won't pay for all this stuff"

House builders often claim that their experience is that people won't pay more for homes with "eco-features".  They might say they will (perhaps to market researchers compiling reports), but when it comes time to sign the cheque they won't spend the money.

But have they really tried to sell efficiency?  Are the sales people knowlegeable about the features and benefits?  Does the marketing material explain the features in simple terms and the benefits in a meaningful way?  Has the package of energy efficiency technology been chosen to appeal to buyers?

Please add your thoughts and comments below.

Thursday 7 June 2012

They Work for you, Don't They?

What's going on in there?
Sometimes it it feels like the UK solar industry believes that the reason for the existence of the Department of Energy and Climate Change (DECC) is to help solar businesses thrive.  This attitude seems to lead to an industry view that it's only incompetence that drives DECC to  fiddle around with the Feed in Tariff and leaves it unable to get on with implementing a domestic Renewable Heat Incentive.

The bad news for the solar industry is this: DECC doesn't work for you.

Solar industry commentators seeking to  offer their advice to our public servants might do well to take a walk in the shoes of the people on the other side of the table.  What are their goals and motivations?  Perhaps if we take a moment to understand, we would be able to present our aspirations in a way that is more persuasive.


The top-level drivers for renewable energy in the UK come from legally binding directives from the European Union (EU).  In response to the Kyoto Protocol, the EU set the so-called 20-20-20 targets.
By 2020 the EU as a whole will:
·         Reduce greenhouse gas emissions by 20% compared to 1990 levels  (UK 16%)
·         Provide at least 20% of energy consumption from renewable energy sources (UK 15%)
·         Reduce primary energy use by 20% through energy efficiency measures
Each national government has been set its own targets such that the EU as a whole meets its overall target.  The UK target where it exists is given in brackets.
Clearly these targets overlap.  For example reducing total energy use will increase the proportion of renewable energy even if this stays at the same absolute level. 
The energy efficiency target has produced a number of directives from the EU on the energy efficiency of products, cogeneration, and the energy performance of buildings.  This last directive requires that all new buildings in the EU should be “Nearly Zero Energy” by the end of 2020.

UK Policy

UK policy must take into account the legally binding obligations that arise from these EU directives. 
In 2008 the UK government introduced the Climate Change Act, the world’s first legally binding targets to reduce carbon emissions (reducing by 80% from 1990 levels by 2050 and 34% by 2020).  The 2020 target is more challenging than the EU requirement, but is only a recommendation from the Committee on Climate Change.  The 2050 level is legally binding, although it’s not really clear who gets punished if the target is missed.
In its first report to the European Commission on progress towards the 2020 Renewable Energy Target, DECC lists 45 measures that have been implemented with the goal of achieving the UK target of 15% of energy from renewables.  Among these are:
·         Renewables obligation – payments to large scale renewable electricity generators (e.g. wind farms)
·         Feed in Tariffs – financial incentives for smaller-scale renewable electricity
·         Renewable Heat Incentive – financial incentives for renewable heat generators
·         Building Regulations –new homes to be zero carbon from 2016, non domestic from 2019
·         Electricity Market Reform – Contracts for Difference to pay investors in low-carbon electricity
·         Planning Policy – to encourage renewable energy projects to go ahead
·         Renewable Transport Fuel Obligation – requirement to include biofuel in petrol and diesel

Know Your Place

Clearly solar energy is only a part of the solution to the massive challenge of meeting these targets, but how big a part?

DECC has given a clue to its thinking with its Renewable Energy Roadmap, published in July 2011.  It estimates that 234 TWh per year of renewable energy will be required to hit the 15% target, and proposes the following breakdown as one scenario to meet this:

Mid-range estimate
Onshore wind
28 TWh
Offshore wind
46 TWh
Marine energy
1 TWh
Biomass electricity
41 TWh
Biomass heat
43 TWh
Heat pumps (non domestic)
19 TWh
48 TWh
Other (domestic, solar)
14 TWh

240 TWh

234 TWh

Disappointingly, but perhaps not unexpectedly it can be seen that the government is taking a big-industry, top-down approach to the problem.  Only 6% of the total is expected to come from domestic installations of heat pumps, solar heating and solar pv. 

However, to put this in context, 14 TWh per year from the domestic stream would be met by either:
·         9 million domestic installations of solar water heating

·         6million domestic solar pv installations of 2.8kWp (17 GWp total)
 Even at this level, the challenge is significant and is likely to require attractive and sustained government incentives to support deployment.   DECC’s focus on unpopular technologies that could get bogged down in local planning appeals means that solar pv and solar thermal may have an even bigger role to play in meeting the challenge and underlines the case for urgent progress with the domestic Renewable Heat Incentive.

Reading List