The Green Investment Bank has today announced its first investment in the social housing sector, working with the social housing provider Places for People to install highly efficient heating systems in 28 sheltered housing units across the country.
About 1 in 6 homes are owned by a housing association or council. The social housing stock contains – on average – the most energy efficient homes.
But there are still significant numbers of cold, damp homes in the social rented sector. And given the typically lower incomes of people living in social housing, it’s important that tenants have maximum protection from energy bills. That’s best achieved by making sure their homes are as well insulated and efficiently heated as possible.
Earlier this year, the Energy Saving Trust and the National Housing Federation brought together leading environmental organisations and housing associations to agree some priorities for improving our social housing stock. Here’s our take on some of the key ideas that came out of that meeting.
Delegates at the NHF and EST meeting started out by agreeing that it wasn’t enough to look at an average energy efficiency standard for social homes. Both at a national level and in individual housing associations we need to work on minimum Energy Performance Certificate (EPC) standards that applies to all properties.
The lowest banded EPC homes – F&G – have nearly been eliminated in the social housing stock. EPC band C is now widely seen as the minimum standard that we should be aiming for as the next step in the energy efficiency journey. There was disagreement about when and how that target should be set in the social housing sector. Most of the environmental organisations argued for a 2020 date. Social housing organisations stressed their commitment to meeting standards but are more wary of national target dates.
Even when all homes are at a C standard, there is a long way to go if we are to protect all residents in social housing from fuel poverty, and to hit the 2050 climate change target of an 80% reduction in carbon emissions. We therefore also need to think about bringing some homes straight to an EPC “A” near-zero energy standard as the quickest and cheapest way of delivering energy efficiency for the long term.
Social housing providers are realistic about the opportunity for short- and medium-term increases in public funding for energy efficiency. Those providers told us that they will continue to make energy efficiency improvements in the interest of their tenants, regardless of the availability of government funding.
Attendees at our meeting felt that the limited government funding that is available could be better spent within a stable long-term policy framework. Some recent government initiatives – for example the current DECC Green Deal Communities programme – have provided good learnings but asked housing associations to work on very short timescales.
Looking to the longer term, there is a strong case for government investment in home energy efficiency to be a national infrastructure priority. The evidence suggests that large-scale home improvement programmes deliver major national jobs and growth benefits. Social housing providers are well placed to deliver maximum value from that infrastructure investment – either in leading area based transformation programmes, or through the development work that could make a 2050 “energy leap” a mainstream approach for all homes.
National infrastructure investment could work alongside an improved “Pay As You Save” (PAYS) model, whereby some tenants share the costs of energy efficiency upgrades as they save on their energy bills. The current Green Deal PAYS programme hasn’t worked in the social housing sector, but the principle is sound. A government infrastructure investment to make PAYS finance available at 0% could bring major benefits to millions of homes. However, we’d need to ensure that the tenants who currently manage their energy bills by using very little energy do not end up with higher bills as a result of PAYS.
So that’s how it could be paid for. How do we make leaders in housing associations want to undertake energy efficiency? And can social housing lead retrofit in private sector homes? That’s the focus of our next blog.