Written evidence submitted by Thirteen Group (DHH0025)

Please find below written evidence submitted by Thirteen to the BEIS Select committee inquiry on Decarbonising heat in the home.

Thirteen are the largest housing association in the Northeast, owning and managing approximately 34,000 homes.  Residential housing is responsible for 22% of all UK emissions and social housing contributes 10% of this. Decarbonising social housing is therefore critical to achieving the government’s ambition of net zero carbon emissions by 2050.

Thirteen are fully committed and passionate about the net zero agenda and the role decarbonisation can play in tackling not just the climate crisis, but the economic impact of Coronavirus. We have a proven track record of delivering against government standards and programmes and therefore feel that housing associations have a crucial and practical role to play. Ultimately, we believe by making our homes more sustainable and energy efficient we can allow our residents to save money, help to combat fuel poverty, boost the economy, create jobs and achieve our net zero targets.

1. What has been the impact of past and current policies for low carbon heat, and what lessons can be learnt, including examples from devolved administrations and international comparators?

1.1 Heating of buildings currently accounts for approximately one third of UK carbon emissions and past attempts to improve the energy efficiency of homes to reduce emissions have fallen somewhat short.

1.2 The introduction of programmes such as the Eco 3 and Warm homes grant allowed for the installation of many energy improving measures but unfortunately the quality of work has proven to be of a large variance in quality. The inconsistency in fitting methodologies has led to large scale issues with cold spots from poor thermal bridging within the insulation schemes, also the issue of ventilation was not addressed leading to further issues around mould and condensation with these homes.

1.3 The current Green homes grant was released with such tight timelines that it made it virtual impossible for social landlords to plan, procure and deliver works especially given the access difficulties due to Covid and the prolonged lead in times needed for many of the materials required in a limited supply chain. We also found that once the scheme was announced the prices for installations of measures such as air source heat pumps suddenly increased on average by £5000 compared to quotes, we received between April and July 2020.

2. What key policies, priorities and timelines should be included in the Government’s forthcoming ‘Buildings and Heat Strategy’ to ensure that the UK is on track to deliver Net Zero? What are the most urgent decisions and actions that need to be taken over the course of this Parliament (by 2024)?

2.1 Guaranteeing that we can meet the demand by increasing the availability of trained trades able to deliver the works to a high standard is essential.

2.2 We also need to agree a new standard and potentially a new delivery body for these works to ensure that works are delivering and achieving the returns they promise.

2.3 Investment in the supply chain is required in order to increase skills and capacity. Longer term commitment to funding streams, which provide the supply chain with a basis on which to build their business models. They need a greater understanding of the demand and timescales.

2.5 Investment in development and research of innovative technology and applications to address specific issues and difficult to treat properties is also required.

3. Which technologies are the most viable to deliver the decarbonisation of heating, and what would be the most appropriate mix of technologies across the UK?

3.1 We have installed a large number of air source heat pumps which offer a reliable efficient source of heat but whilst there are considerably cheaper to run than night storage heaters they are more expensive to run than a combi boiler which proves problematic in areas of high fuel poverty.

3.2 Mechanical vent heat recovery (MVHR) is a good option but must be used in conjunction with sound thermal improvements to the home to ensure high levels of insulation and air tightness. This system also requires a secondary heat boost during the coldest periods such as Infra-Red or Electric heaters as well as a water heating component such as a fuel cell, solar thermal or immersion heater.

4 What are the barriers to scaling up low carbon heating technologies? What is needed to overcome these barriers?

4.1 A major factor currently affecting scaling up of low carbon technologies is the lack of certainty from government in terms of policy and strategies needed to roll out these technologies.

4.2 The largest barrier at present is the increased capital costs of most low carbon technologies ad whilst we acknowledge funding available through the RHI scheme offers some payback to reduce the overall cost variance it is paid back over 7 years and places higher levels of initial capital outlay that slows the delivery of schemes.

4.3 The additional cost at present of running these systems based on the high electricity costs in comparison to gas.

4.4 The introduction of largely electric based systems is also placing large demands on the national energy infrastructure that is many cases is outdated and unable to cope with the increased demands.

4.5 The supply chain and number of viable products must increase to reduce the timescales for delivering projects.  Also, the supply chains ability to meet demand and deliver at scale.

4.6. Finally, customer engagement and buy in is essential to enable the roll out of these technologies. A national awareness campaign is required so that consumers are educated and understand the importance so that they are less reluctant to engage or invest in new technologies and understand the temporary disruption. The launch of a major campaign of public education about the need to reduce carbon emissions from UK homes by replacing conventional gas boilers is overdue.

5. How can the costs of decarbonising heat be distributed fairly across consumers, taxpayers, business and government, taking account of the fuel poor and communities affected by the transition? What is the impact of the existing distribution of environmental levies across electricity, gas and fuel bills on drivers for switching to low carbon heating, and should this distribution be reviewed?

5.1 It is critically important that we protect our most vulnerable customers.

5.2 The majority of the poorest members of our community live within socially rented homes and as such there will be a need for the social landlords to address the heat demand of their stock.


5.3 We (through work commissioned to Savills) project that these works will cost on average £23,000 per unit which would equate to a national spend of £115b based upon the 5 million homes in the sector.  This will prove unviable for many of the providers in the sector, which will require either additional government funding or increased charges to some of the poorest people in the country to enable delivery of these improvements.

5.4 There are currently models emerging that would look for customers to fund the improvement measures from their projected savings over the lifespan of their occupancy. This could prove problematic for customers who regularly go without heat to fund other essentials yet under this model that would not be an option and could see a significant rise it tenant debt and this would halt future schemes being rolled out.

5.5 The introduction of a tax payment specifically for the decarbonisation of the poorest homes could fund the £115b needed and would equate to an average of £10.54 a month for every taxpayer in the country.

6. What incentives and regulatory measures should be employed to encourage and ensure households take up low carbon heat, and how will these need to vary for different household types?

6.1 Straightforward, clear road maps, grant funding and mandates will provide confidence to the industry and help to prepare businesses to plan and prepare households for a switchover.

6.2 Educating and informing consumers as soon as possible regarding available options and simplifying the incentive process would help the take up of low carbon heat.

6.3 For private homes a system of ROI payback should be introduced with a government loan linked to cost savings for the introduction of low carbon measures where a homeowners costs will not increase and once the loan is completed they will have reduced cost, lower carbon and potentially an improved market value for their home.

6.4 Landlords could receive tax rebates to account for the costs of the increased levels of investment required to address the measures. This would equate to a reduction of around £3.83b funding a year into the government but should realise a saving in the administration of a complex and protracted grant allocation scheme.


7. What action is required to ensure that households are engaged, informed, supported and protected during the transition to low carbon heat, including measures to minimise disruption in homes and to maintain consumer choice?

7.1 Development of the supply chain to ensure consumer choice and reduce monopolisation and inflated prices.

7.2 Support/advice/tools to guide homeowners and private landlords to make informed decisions on the technologies and products they apply to their properties, giving assurance of the longer-term sustainability and health of their properties. Are they making the right choice, what benefits will be? Which technologies work best together and for their build type.

7.3 There is generally a low awareness for low-carbon heating technologies and the role they play in in meeting net zero how they support the green recovery. Education and communication package which details the ‘what is in it for me’. Selling the benefits to the end user in a way that they can relate to in their circumstances. For a homeowner paying for the works, they may want to understand the payback timescale against energy savings. The eco aware and committed, will want to know how they are supporting the longer-term sustainability of the planet and local environment.

7.4 Customers renting the property, especially those on lower incomes, will want to know what they will save in costs and/or how it will improve their standard of living.

7.5 Some reality of what to expect during the works, what is and is not needed and the amount of disruption they will have to undergo.


8. Where should responsibility lie for the governance, coordination and delivery of low carbon heating? What will these organisations need in order to deliver such responsibilities?

8.1 Local Authorities have a key role to play and should be accountable for the governance and co-ordination of low carbon heating across all tenures. They will need specific targets and timescales.

8.2 To support this, they will need to be fully resourced and supported so that they can co-ordinate across all tenures within their locality. Resource include data, financial support, and personnel. They will require authority to support and take action where there is limited commitment from stock owners and develop high quality local (energy) plans which consider the locality but also deliver on the overall target for the UK as a whole.

8.3 The government and industry regulators need to introduce a new quality standard for the introduction of measures so that works completed by tradesmen are completed to standard that will achieve the required minimum standards in the areas of thermal efficiency, air tightness and thermal bridging, ventilation.

8.4 The government should introduce a new measure of energy demand in a home and move away from EPC ad SAP assessments that have proven to be ineffective in offering realistic reflections of a homes heat demand as it relies heavily on assumptions rather than real world data. There should be a new model created that understands the performance of the building through real world data points such as temporary sensors within the home linked to thermography and airtightness testing.

November 2020