Green Deal Presentation RdSAP and Green Deal

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1 Green Deal Presentation RdSAP and Green Deal What is RdSAP and the EPC? Changes to RdSAP 9.91 Green Deal Measures an PAS 2030 Golden Rule Repayments

2 What are EPCs and what is RDSAP?

3 EPC Energy Performance Certificates (EPCs) Are to assess the energy performance of buildings They were introduced in England and Wales on 1 August 2007 as part of Home Information Packs (HIPs) When the requirement for HIPs was removed in May 2010, the requirement for EPCs continued. A certificate is valid for 10 years, and is required on a new tenancy, sold or rental. Currently the green deal measures are only valid for 3 years

4 Role of the EPC EPC is required by law when a building is built, sold or put up for rent. If you are a landlord or homeowner and need to provide an EPC, you'll need to contact an accredited domestic energy assessor. They will carry out the assessment and produce the certificate. It is the benchmark of the properties energy efficiency by the DEA The EPC generates the measures that the GDA will look to trying to implement if they hit the golden rule after the Occupancy assessment.

5 What is RdSAP Reduced Data Standard Assessment Procedure (RdSAP) has been developed by the Government for use in existing dwellings, based on a site survey of the property. RdSAP consists of a system of data collection together with defaults and inference procedures, which generate a complete set of input data for the SAP calculation. Stroma have created a software solution that meets the required criteria, a new version 9.91 is set for release in April 2012.

6 RdSAP Considerations Property age/detachment, any extensions present Habitable room count Dimensions (areas and heat loss perimeters) Conservatory Wall construction (plus any insulation) Floor construction (plus any insulation) Floor exposure Alternative wall (plus any insulation) Roof construction (plus any insulation) Roof room construction (plus any insulation) Windows (glazing type, percentage glazed, area) Fireplace count Terrain type Low energy lights PV (could include orientation, pitch etc.) Space cooling Mechanical ventilation Wind turbines Main heating system 2nd Main heating system (optional) Heating controls Secondary heating Hot water heating Gas and electric meters

7 RdSAP Assumptions The EPC is designed so an EPC for one property can be a compared with another. Different people use their house and it s contents in different ways. EPCs are therefore not specific to the occupants, but to the dwelling itself. Assumptions are made by RdSAP so household behaviour does not impact on the EPC rating Standard occupancy the actual number of occupants is not accounted for. RdSAP assumes occupancy based on the floor area. This is then used to determine factors like domestic hot water requirement Standard heating pattern some people have their heating set to 25 o all day every day, some people have their heating on for half an hour a day. To avoid this type of behaviour skewing EPC data a standard heating pattern is used. 9 hours heating a day during the week 16 hours a day at the weekend The living area is heated to 21 o C and the rest of the house to 18 o C non- at the RdSAP does not account for energy use by electrical appliances and fitted lighting. It is assumed these will not be left property by the current owner/occupier

8 Differences between SAP and RdSAP SAP Used for new dwellings Used for buildings which have undergone a change of use Report produced off plan. Property is not visited Uses a more comprehensive methodology Assessor must hold Dip OCDEA qualification Report based on U-values Uses SAP software RdSAP Used for existing dwellings Assessment conducted at the dwelling Uses a reduced methodology taken from SAP Assessor must hold DipDEA qualification Report based on assumptions Uses RdSAP Software

9 RdSAP Interface

10 Product Characteristic Data File (PCDF) RdSAP draws information from databases within the PCDF. Databases are regularly maintained for DEAs to: Locate appropriately calculated seasonal efficiencies and characteristics for heating and related products Reduce the risk of miscalculation and confusion with data. The PCDF stores data in separate tables per product, specific fields aid product identification for the technical data relevant to SAP calculations. (i) boilers, fired by gas, LPG or oil (ii) solid fuel boilers, fired by a variety of solid fuels (iii) cooker boilers with twin burners, fired by gas, LPG or oil (iv) micro-cogen (also known as micro-chp), fired by gas, LPG, oil or solid fuel (v) flue gas heat recovery systems (FGHRS) (vi) mechanical ventilation systems (vii) waste water heat recovery systems (WWHRS) (viii) heat pumps

11 Changes to RdSAP 9.91

12 New data entry Draught proofing Areas and U-values can now be Wall thickness measurements specified External door count/insulated door count Window data extended - orientation, U and g-values taken into account Number of rooms with bath and/or 2 wind turbines can now be considered shower (for waste water heat recovery) Internal dry lining Flue gas heat recovery - software contains (yes or no option) a new database to provide this data Solar water heating - now giving the option Waste water heat recovery - software to enter details such as the heat loss contains a new database to provide this data coefficient and aperture Photovoltaics - now has the provision for three separate PV systems Partially Insulated roof rooms - software now accommodates gable and stud walls, as well as flat ceiling and the sloping parts.

13 New EPC (includes Green Deal) Green Deal is now the main focus on the first page of the new EPC

14 Changes Previous EPC Recommendations were separated into lower and higher cost measures. In the format, there is no correlation between the measure and its relevance to the home owner New Green Deal EPC The RdSAP 9.91 software shall calculate improvement measures in the order they should be considered. The rating after improvement is a cumulative rating. The calculation will also determine if the measure is eligible for Green Deal finance

15 Validity of the EPC Definition: it has been lodged to landmark and is valid as per the requirements of EPBD in the relevant country It has been produced after 1 st April 2012 (in England and wales) or after 1 st October 2012( in Scotland) The GDA is satisfied that there have been no major changes to the property since it was lodged that would materially affect the outcome of the EPC

16 Golden Rule Typical Repayments ting Cost

17 The Golden Rule The Golden Rule says: E = S + R + E C GD C GD the annual saving in energy cost from implementing the improvement measure must be at least equal to the annual repayments.

18 Green Deal Repayments where: R - is the annual repayment C - is the cost of the measure (using the middle of the range where cost is given as a range) r - is the annual interest rate (currently 7%) n - is the repayment term, taken as lifetime of the measure in years.

19 Green Deal Repayments Example. C is 500, r is 7%, n is 20 years: = 47 The Golden Rule is met if the calculated annual saving for the measure is 47 or more. Round both R and the annual saving to nearest before comparing them. RdSAP software calculates this for each recommended measure and passes the result (i.e. no tick, orange tick or green tick) to the EPC register in the lodgement XML. As an exception to the above, solid wall insulation gets a green tick. This is because a subsidy may be available via ECO (Energy Company Obligation) that reduces the cost to the householder to that available from GD finance.

20 Green Deal Repayments High energy cost before Green Deal Low energy cost after Green Deal Low installation cost of measure E = S + R + E C GD C GD Short repayment term Low interest rate

21 The Green Deal: Finance The New Bill payments MUST be less than the Green Deal Repayment + New Energy Cost The Golden Rule is the principle, which limits the amount of Green Deal finance that a provider can attach to the energy meter to the estimated energy bill savings that are likely to result from the installation of measures under the Green Deal plan. This principle aims to keep the energy bills at the property no higher than they would have been had the property been without a Green Deal this is important both to protect consumers from higher energy bills, and to protect investors from a higher risk of default on the bill. 21

22 The Green Deal: Finance - PAYS Pay As You Save Model 22

23 The Green Deal: Savings Small 3 bedroom semi detached house: 3,000 Double glazing 2,700 Condensing Combination Boiler with Heating Controls 1,000 Floor Insulation 1,000 Cavity Wall Fill, Loft Insulation, Draft Excluders, Light Bulbs 7,700 Sub Total 2,559 Interest over 10 Years at 6% 10,259 Grand Total 10,580 Savings over 10 years using RDSAP assumptions (The golden rule applies) 1, per annum overall savings 32 per annum immediate savings

24 Green Deal: Green Investment Bank Green Investment Bank Britain needs to invest around 200 billion pounds by 2020 in greener technologies to meet ambitious carbon emissions cut targets The Green Investment Bank is designed to accelerate private sector investment in the UK s transition to a green economy. Offshore wind power generation, commercial and industrial waste processing and recycling, energy from waste generation, non-domestic energy efficiency and support for the Green Deal will be the first priority sectors for the Bank, subject to approval by the European Commission. The bank will initially get 775m towards the 3bn total funding due to come from the Treasury; Its key role is to raise up to 15bn in private sector funding, from pension funds, foreign sovereign wealth funds, energy companies and banks, by underwriting the initial losses and risks from new and untested green technologies. The Green Investment bank commenced lending in April 2012.

25 Green Deal: Green Deal Finance Co. The Green Deal Finance Company Working alongside the Green Investment Bank to access private sector funding: Future Green Deal Providers (the companies that will make energy efficiency improvements) will need to access the cheapest possible underlying source of finance If finance is not set at affordable interest rates, it will be more difficult to meet the Golden Rule TGDFC intends to minimise operating and administration costs of the Green Deal, accessing the cheapest sources of finance in the market at the highest possible credit rating Maintain a consistent finance rate to all providers regardless of size Members of the GDFC include: British Gas, Carillion, Clifford Chance, E.ON, EDF Energy, Goldman Sachs, HSBC, Insta Group, Kingfisher, Linklaters, Lloyds Bank Corporate Markets, Mark Group, Npower, PwC, RBC Capital Markets and SSE

26 Repayments Green Deal Providers can uplift the whole charge by 2% a year, in line with Bank of England inflation targets if desired. This will allow more Green Deal plans to meet the golden rule and for a greater proportion of these plans to be paid using Green Deal finance by capitalising on some of the expected increase in savings over the course of the plan and potentially decreasing the need for an upfront payment. There are two options for the repayments. Both are fixed repayment plans, but one is flat and the other rises by 2% each year. 26

27 Any Questions