"Industry renews call for VAT cut on refurbs as public shuns Green Deal"- Opinion contribution to AJ article ( first published by AJ 30.01.2014)
My published comment:
‘Given the low number of Green Deal installations (around 600 completed installations, with only another 1000 in the pipeline) in just a year since it launched, one could say the Green Deal has failed. However, given the high interest rates associated with the loan, the fact it is a new scheme to industry with significant bureaucracy and complexity on top of how long it takes to organise and undertake works on site, this is not entirely surprising.
Also, these numbers only reflect Green Deals taken out with a finance plan, i.e. occupants who are borrowing money and repaying it through their electricity bill. I suspect many people who, like myself, have had Green Deal works undertaken without the loan, will fall through the statistics gap of the Green Deal. For example, we had the first assessment in March 2013, and it took months to find and get installers to quote for the works who also could draw on ECO funding. Due to the ECO subsidy offered, we could fund the works via other means and no longer needed a Green Deal loan. While we still had the installation done under the Green Deal, it won’t show up as a Green Deal.
The low Green Deal completed numbers are hence likely to be deceptively low, and installations are presumably instead included under the ECO scheme, if (like our solid wall insulation) the works are part funded this way.
So far, there have been over 470,000 ECO part-funded installations, a much greater number than the people signing up for the Green Deal, though ECO-funded installations are still falling short of previous government schemes.
As an architect, it is frustrating that it is not possible to adapt solutions to suit each property best ‘Clearly the high interest rate (7 per cent) is off-putting to many. The negative media exposure it received has given ECO and the Green Deal a bad name and may put people off starting or proceeding. Equally the government’s knee-jerk response to bad media means that there is uncertainty in industry about what may happen next. Having gone through most of the process, the complexity and bureaucracy is astonishingly stifling. As an architect, it is frustrating that it is not possible to adapt systems and solutions to suit each property best. To illustrate this: each Green Deal approved system has standard details, whether they work for a given property or not. In our case, the solution for window reveals doesn’t work and so we have none rather than come up with other solutions; on a part of the wall we would have benefited from more than the 100 mm system insulation, but this is not possible as industry has designed and gained Green Deal approval for systems which meet the current building regulation requirements for U-values (which attracts ECO funding), not more or less. This really limits consumer options. The separation of certain trades - i.e. installers who can install wall insulation but not flat roof insulation or anything to do with waterproofing under the Green Deal, means that you may end up with odd and less robust details; and the consumer may have to get two Green Deal installer in and co-ordinate the separate works themselves, despite the fact that of course both measures are Green Deal measures. We decided to have one installation done under the Green Deal to benefit from the ECO-funding and the other part to be done by the same firm, but outside the Green Deal as they had not gone through the Green Deal approved process for this.
For individuals, getting access to ECO under the Green deal still seems to be very limited and hard to find.
VAT relief should also only apply if certain fabric standards are met ‘VAT on insulation is at present just 5 per cent, but this is still 5 per cent more than when building anew and this discrepancy is long overdue. I would like to see VAT relief for retrofit introduced and on a sliding scale depending on how well the building fabric performs for new-build. Perhaps to avoid purely cosmetic changes in retrofit, relief should also only apply if certain fabric standards are met, while acknowledging the challenges of retrofit and that in some cases higher standards may be detrimental to the fabric.
There are over 25 million existing buildings, most of which will still be standing in the next 50 years. The majority of these buildings do not provide occupant thermal comfort; lead to high energy bills and use up vast amounts of (often imported) fossil fuels to keep people warm, leading to high associated carbon emissions and pollution. The government needs to get real and needs to urgently reward energy efficiency, i.e. the energy not used, just like it rewards clean energy produced (such as FITs and RHI). The best way to use energy, is after all, to not need it in the first place!
At present many retrofits - apart from for the wealthy - do not involve architects. A VAT reduction for retrofit projects may lead to more retrofits, but won’t necessarily benefit architects, the environment or lower energy bills unless high fabric renovation standards are met, which would also require specialist architectural input.’
This is Sofie's blog; or rather a collection of musings & articles sometimes also published elsewhere. More about Sofie here.