Allowable Solutions for Tomorrow's New Homes

Thursday, October 4, 2012

In a new report published today, the Zero Carbon Hub sets out the latest insights into how Allowable Solutions, a critical component of the Government’s 2016 zero carbon new homes policy, could operate. Encompassing stakeholder feedback, Allowable Solutions – evaluating opportunities and priorities examines in detail the Hub’s 2011 operational framework proposals and evaluates six potential Allowable Solutions options against a series of critical success factors.

Potential Allowable Solution options examined are:

·         Investing via the Green Deal.

·         Investing in district heating.

·         Investing in social housing retrofitting initiatives.

·         Investing in renewable energy projects.

·         Investing in embodied carbon initiatives.

·         Investing in low-carbon lighting projects (LEDs)

Whilst there is strong industry support for the concept of Allowable Solutions and the proposed framework, the report identifies a number of areas requiring critical attention. Paramount is certainty on the potential options, agreement on key operational aspects of the framework, including price, verification and fund management. The report also emphasises the urgency of establishing a programme of Allowable Solutions trials to test proposals and understand the real-life practicalities of delivery.

Rt. Hon. Don Foster MP said:

"I welcome the ongoing work of the Hub and its partners in exploring how to make the most of the opportunities offered by Allowable Solutions. It is vital that we get this right, and I shall view this report with real interest."

John Slaughter, Director of External Affairs, Home Builders Federation said:

“The widely supported workshop process developed and delivered by the Hub and its partners has been very helpful in focusing minds on the real practical issues that have to be thought through to put together a workable and credible system for Allowable Solutions. It is important that Government picks up on the lessons learned in formulating early proposals for Allowable Solutions, including on price, so that the uncertainty now which is concerning developers and others can be resolved.”

Neil Jefferson, Chief Executive, Zero Carbon Hub said:

“We see in this report a broad consensus of support for the 2011 Allowable Solutions framework proposals developed by the Hub. Crucial to early success of the policy is addressing the emerging key issues including clarity on cost of carbon, the rules of verification and certainty about Allowable Solution options, all of which seem to me to represent an ideal opportunity for the incoming Housing Minister to set out longer term sustainable thinking for the industry.”

Marco Marijewycz, Strategic Lead – Allowable Solutions, Zero Carbon Hub and Advocacy & Stakeholder Manager at E.ON said:

“The most striking insight which emerges from this process is the consensus amongst key stakeholders that Allowable Solutions has the potential to catalyse both cross sector innovation and the economic rejuvenation of our communities via a low carbon trajectory. However, what is also emphatically clear is the desire for clarity now on the mechanisms for pricing carbon within any such framework. This clarity is essential so as to enable key market actors to strategically plan now ahead of 2016.”

Guy Battle, Partner Sustainability Services, Deliotte LLP said:

"The UK Government is committed to an 80% reduction in carbon emissions by 2050 and given the importance of the construction sector within the UK, the Zero Carbon Building regulations will have a significant role in supporting this target. Allowable Solutions is an innovative mechanism that will permit developers to deliver this requirement cost effectively. But more importantly, Allowable Solutions has the potential to harness the creativity of the industry to inspire innovation in materials and systems, to create new jobs, drive growth and establish the UK as a leading low carbon economy. It is now essential that the government works closely with the whole of the industry (domestic, commercial and industrial) and embraces it’s power and enthusiasm to deliver on this ground breaking initiative."

A copy of the report can be downloaded from www.zerocarbonhub.org

ENDS

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Notes for Editors:

1.     Allowable Solutions: Allowable Solutions is a mechanism that is being formulated to account for the carbon emissions reductions that are difficult to deliver on site through the design and construction (Fabric energy efficiency and integral low-carbon heat and power technologies) of a new home. For these residual emissions, the current framework proposal requires that a payment is made into a fund to enable the delivery of verified carbon-saving projects for community and national benefit. The framework proposals allow for the delivery of local carbon-saving projects through a community fund or the delivery of national projects - in both cases the expectation is that the Allowable Solutions funds will provide magnet capital or starter finance for projects.

The Zero Carbon Hub proposes that for a mainstream home the residual emissions could amount to 10-14 Kg CO2/m2/year depending on the type of home. For a typical home an Allowable Solutions payment would be about £1200 (using current proposals that Allowable Solutions should cover a 30 year period and be paid at £46 per tonne of carbon).

2.     This strategic work for the Zero Carbon Hub on Allowable Solutions was led by E.ON, with support from Deloitte LLP. The partners and collaborators from a range of stakeholder interests took part in a series of workshops that scrutinised in depth the Hub's original proposals.

The partners hope that this new thinking and evaluation of current proposals will provide insights for Government on the development of its Allowable Solutions policy. Importantly, the report identifies some of the key areas where policy development is perceived as urgent to enable the establishment of a workable Allowable Solutions framework by 2016. Further development of the concept of Allowable Solutions will now await feedback from Government over the initial Hub proposals on the framework and this more detailed appraisal, which supports the principles of engagement for housebuilders, building control, planners and low-carbon project providers.

Zero Carbon Hub - The Zero Carbon Hub was established in response to the Callcutt Review recommendation, to make zero carbon homes a reality from 2016. It is a public and private partnership responsible for galvanising action and working with Government, councils and industry to overcome barriers to ensure this ambitious policy is implemented.

E.ON - E.ON has been actively engaged in the Zero Carbon Homes agenda from its outset and represented the UK energy industry as a member of the UK Green Building Council’s Zero Carbon Task Group as well as being actively engaged with the work of the Zero Carbon Hub. E.ON has provided strategic leadership in the development of the Allowable Solutions agenda.

Deloitte LLP - Deloitte offers a wide range of strategic consultancy services to UK businesses. Within its Sustainability Services, Deloitte has a specialist Climate Change and Carbon Management consultancy. This expertise has been shared with the partners on this evaluation project, providing rigour and pragmatism on how the carbon industry might interface with the building sector at this critical time.