Funding sustainable energy

Presented by:

Dave Barton

The Energy Saving Trust

Financing improvements

• Grant programmes• Revolving loans• Discount schemes• Green mortgages• Treasury initiatives• Shared investment/savings

Energy Efficiency Commitment

• EEC - statutory obligation.• EEC 2005 - 2008 (130 TWh).• Predominantly energy efficiency

measures, but includes:• Solar water heating.• Ground / Air source heat

pumps• MicroCHP.

• Likely to continue and get bigger

Warm Front

• Originally introduced in 2000.• Amended in 2005 to include central

heating.• Package of measures up to the

value of £2,700.• Additional Government funding

(2005-8) for central heating for vulnerable pensioners.

• Renewables?

• Capital grant programme:– Part-funded– Various streams

• Technologies– Solar photovoltaics.– Wind turbines.– Small hydro.– Solar thermal hot water.– Ground source heat pumps.– Bio-energy– In future: MicroCHP, fuel cells,

water and air source heat pumps?

The DTI’s Low Carbon Buildings Programme

Green Energy Loans (Coventry, Warwick and Nuneaton and

Bedworth) • Credit union scheme• Aimed at individuals who can’t

obtain grants and who probably wouldn’t get loans elsewhere.

• £1000 over 2 years (12.7% APR) = £1118.45.

– Incentive to pay back - £47.38.– Total interest = £71.07.

• Increased loans available for heating systems.

• Cheques made payable to contractor.

Other sources of funding….

• Discount schemes.– EnergySmart (boilers)– Procurement for Housing Central

Heating Deal– Big Green Insulation Scheme

• PCT health funding– Cold/damp-related illnesses

• National Grid Affordable Warmth– Low cost borrowing for gas central

heating with energy efficiency measures

Interest-free loans for renewables (Chichester)

• Interest free loans to homeowners and private landlords

• Repayable monthly over a period 1-3 years

• Maximum: £4,000

• Technologies:– Solar hot water heating– Small-scale wind turbines– Ground source heat pumps

Green Energy Trust

• ScottishPower

• Community based projects

• UK-wide

• 50 per cent of project costs - maximum £25,000

E.ON SOURCE

• Community groups and NFPs• Technologies include:

– Solar– Small scale wind– Bio-fuels– Geothermal– Fuel cells– Small-scale hydro

• 100 per cent funding: £2,500-£30,000.

Green mortgages

• A home loan or further advance which incentivises a lower environmental impact

• The Energy Efficiency Partnership for Homes requires that one should– Encourage improved energy efficiency– Offer one or more financial incentive towards

energy reduction in energy use– Encourage access to advice– Have a defined qualifying criteria

Green mortgage incentives:

• Lower interest rates• Cashback• No early redemption charge• Fee-free• Higher loan-value• More favourable term (duration)

As defined by the Energy Efficiency Partnership for Homes Home purchase and Finance Group

Green mortgage qualifying criteria:

• Energy performance better than Building Regulations

• Commitment to carry out measures identified in the Home Energy Report, or form a general list of measures

Green mortgage Issues

• Lower value and higher cost to provider• Counter-intuitive business model• Financial services industry is heavily

regulated• Lack of consumer demand - chicken & egg?

Green mortgage examples

• Norwich & Peterborough Green Mortgage– Reduced interest rates, maximum reduction for

new homes with a SAP>1000– Reduced rates for existing home improvement,

with carbon offset with 40 trees planted for each mortgage

– Minimum advance of £20,000

Green mortgage examples

• Ecology Building Society C-change– 1% reduction in standard variable rate– Energy efficiency (e.g. insulation, timber-framed

glazing), or– Renewable energy (e.g. solar, wind, wood-fuelled

heating)

• Co-operative Bank– Carbon-offsetting through Climate Care– Looking at a new product aiming to reduce

energy consumption

Equity release

• Previous EST pilot• Aimed at cash-poor, asset-rich• Found to be heavy on administration:

– Lots of ‘selling’– Consultation with relatives and benefactors

• Commercially not viable

Treasury incentives

• Landlord Energy Saving Allowance– Tax deduction of up to £1500 per property– Affects landlords paying corporation or income tax – Measures: CWI, SWI, HWI, DS, FI

• Stamp duty exemption/reduction (new homes)• More to come?

• Council Tax rebate - EEC

Energy services

• Upfront capital investment• Pay back from cost of energy savings

– Examples of schools energy services– Private company lends money and installs measures

• Utilities' special tariffs:– previously, with CFL examples– further examples to come under EEC?

• ESCos as a means of generating heat, electricity and funds

Practical help

• Enquiries service• Website• Presentations• Newsletter• Email bulletin• Energy services

Jacquie

Will

Mandi

Bindi

Further information

Contact Practical help:

T: 0870 241 2089

www.est.org.uk/housingbuildings

practicalhelp@est.org.uk