Wednesday 27 April 2016

Zero Carbon Homes for London

"Bojo vs Osbo" Rivalry Sets Scene for Solar Boom in Capital

I have written many times about this government's shameful record on driving higher energy efficiency standards in new buildings.  If you want a summary of the numerous ways they have watered down, delayed and undermined standards, take a look at this earlier blog.

The latest blow to the many people in the construction industry that had invested heavily in developing skills, technologies and products to deliver the government's long-held Zero Carbon Homes plan was the announcement in July 2015 that the allowable Solutions carbon offsetting scheme was scrapped, as were plans for on-site energy efficiency standards slated for 2016.  Instead a wooly commitment to 'keep standards under review' was made.

The fact that the announcement was made in a Treasury document "Fixing the Foundations" suggested that it was the Chancellor himself that had decided that Zero Carbon Homes needed to go.

Government appeared to have bought the line from house builders that if standards were raised, they wouldn't be able to "solve the nation's housing crisis for us".

In late 2015, Scotland pressed on and tightened building regulations in 2015 beyond those in the rest of the UK.  Guess what?

The sky hasn't fallen in.

Housebuilding is as strong as ever north of the border.

Now the London Assembly has announced that it is going further still.  Way, way further.  London will be implementing its own version of Zero Carbon Homes for major development applications received after 1 October 2016 (for residential developments this means those with more than 150 residential units) .

The policy requires that new homes achieve a carbon compliance standard on site that is 35% better than the 2013 building regulations.  This corresponds to a 54% reduction compared to the 2006 Building Regulations, and seems to be based on a simplification of the proposals from the Zero Carbon Hub.  Its recommendation was an onsite carbon compliance level corresponding to a reduction of 44% for flats, 56% for attached houses and 60% for detached houses.

I reckon that an 85m2 semi-detached house would need a solar system of 1.2kWp to bridge the gap from the backstop fabric (insulation)  requirements considered achievable by the Zero Carbon Hub to the onsite carbon emissions requirement in this policy.

The developer can choose to aim higher than the onsite requirement, but the remaining gap to achieving zero carbon must be provided off-site or through a cash in lieu contribution to the relevant borough.  This money received by the local borough is to be ring-fenced to secure delivery of carbon dioxide savings elsewhere.   There's no details on what constitutes an acceptable use of the money, for example whether it has to be in London, or the UK or anywhere in the world, or whether it has to be on buildings or can include paying South American farmers not to chop down trees.  Guidance will apparently follow.  The GLA suggests a value of £60 per tonne of CO2 emitted by the building in its first 30 years is an appropriate level for boroughs to set for the cash in lieu payment.

If solar saves 950kWh/kWp and the carbon intensity of electricity is 0.522kgCO2/kWh then it needs to cost £0.89/Wp to be more cost effective than paying the £60/tonne cash-in-lieu offset.  On larger buildings this kind of price for solar is coming into view.

However, even on smaller buildings like homes, if the developer has already committed to needing solar to meet the on-site compliance requirement, then the extra cost for increasing the size a system from e.g. 1kWp to 3kWp could well be low enough to beat paying the cash fee.

Whichever way it goes, this is excellent news for solar in the capital, and potentially beyond.  New homes in London represent about one sixth of all new homes in the UK.

The GLA has commissioned research that demonstrated that the prices commanded in the capital can easily support the extra costs of this policy.  London is surely not the only place with high house prices (pretty much the whole of the South East probably would find the same).  If the policy proves to be robust to legal challenges or central government interference, then other local authorities could follow suit.

The Conservatives have left a Zero Carbon Homes shaped policy gap in building standards.  Fortunately a long-distance urination competition between two leadership rivals means that the baton has been picked up by regional government, to the benefit of future home owners and those businesses that invested in the government's original intentions to deliver world-leading building regulations.