Saving energy at home could take 200 years to repay its cost

The cost of installing energy-saving measures such as solar panels would take more than 200 years to recoup in reduced bills, according to research published today.

The Energy Performance Certificates which are now required with all Home Information Packs for houses with three or more bedrooms list eight measures to secure a high rating of A or B against a poor rating of F or G.

But the study from the Royal Institute of Chartered Surveyors shows that some of the measures, such as solar panels to heat water, would cost £5,000 to install but reduce average bills by only £24 a year and would take about 208 years to pay back.

The RICS data shows that putting in all eight measures, including insulation, condenser boilers and double glazing, would cost £23,547. This would knock only £486 off fuel bills and would take 48 years to recoup.

Ministers have argued that the energy performance certificates would reduce carbon emissions and shave hundreds of pounds off household bills, making them an attractive selling point. But the cost of double glazing would take 124 years to recoup in lower heating bills while underfloor insulation would take 54 years.

Even loft insulation would take 13 years to produce savings in utility bills. “People on average spend 16 years living in one property, making most of the EPC energy saving measures financially unattractive propositions,” said RICS. Ten per cent stay in their home for less than five years, and about 12 per cent less than three years.

The organisation is now pressing ministers to reduce the 17.5 per cent VAT rate paid on energy saving measurs to 5 per cent or zero. But they also want the Government to provide grants to give householders a financial incentive to reduce carbon emissions.

“The Government needs to do a lot more than just introduce a ‘fridge style’ energy rating system to encourage people to take up energy saving measures,” said Jill Craig, RICS Head of Policy and Public Affairs.

“RICS has been calling on government to reduce the level of VAT applied to all energy saving measures and to provide an attractive grant program to aid real change. If this Government is really serious about combating climate change they have to turn their big talk into even bigger actions.

“Efforts must be focused on the bulk of the housing market, made up of older homes from the 1920s1960s, that produce twice as much CO2 as a homes built after 1995. The EPC should be applied flexibly to all residential property, not just those that are being bought and sold.”A review of the whole of the residential housing sector begins on Monday which will consider the effectiveness of energy saving measures.

The inquiry, which will be chaired by Sir Bryan Carsberg, former director general of the Office of Fair Trading, will examine the benefits and drawbacks of Home Information Packs. It will also examine current practices in buying/selling and renting and letting property before drawing up recommendations on the regulation of estate agents and letting agents.

The commission, sponsored by RICS, the National Association of Estate Agents and the Association of Residential Letting Agents, will take evidence in public hearings. Yvette Cooper, the housing minister, will be one of the first witnesses to be invited.
Jill Sherman
full article