Jill Sherman, Whitehall Editor
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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.
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The URL is http://www.rics.org/Property/Residentialproperty/Acquisitionanddisposalofresidentialproperty/Homebuyingreform/EPC_payback_times_121007.html for the Press Release and
http://www.rics.org/NR/rdonlyres/80F3366F-13A9-4B72-B20A-257830F8C642/0/BCISResearchonPaybackTimesforEPCs.xls
for the so-called Report. Note that energy prices are from mid 2006 and not updated.
Worst of all is the extremely negative spin the Surveyors are putting in this negative campaign if theirs to undermine the Energy Performance Certificates - which will likely reduce further support for sensible encouragement to invest in energy efficiency essential for combatting climate change.
I have no doubt another less knee-jerk arm of the RICS has welcomed the Stern Review last year which recommended investing NOW to reduce impacts in only a few years of global warming.
David Somervell, Edinburgh, Scotland
Better to spend 2 centuries waiting to recover the cost than to have to live in waterworld.
Farrukh, Woking, UK
There is only one way to assess some measures of energy conservation or renewable power generation: For example, how much energy does it take to make a solar panel? There are many estimates of the energy "in" to energy "out" equation. The least efficient, older crystalline solar photovoltaic cells had a payback time of five years, ie a return of 20% on energy input of manufacture. More recent payback times have fallen for newer cells to less than a year, ie a return of more than 100%, and most of these cells are effectively immortal.
I understand that the energy required to produce some oil from difficult reserves can run to a third of the oil produced, for a once used product. Given the advantages of environmental cleanliness in solar cells and the continued fall in production costs, this is undoubtedly the way forward for renewables.
Dr WIC Clark
Dr WIC Clark, Winslow, United Kingdom
It is reported it would take 35 years to recoup the cost of installing a condensing boiler - but as I understand as little as 10 years these boilers need repalcing - as compared to a life of 25-30 years for boilers made 25 years ago.
As for loft insulation is you go from having 25 mm of insulation (the 1970's norm) to 200 mm (less than the new standard I know) you can do it for less than £100 by taking advantage of 'buy one-get one free' offers. And yes it's the 'itchy-scratchy' stuff - so wear the long sleeves, gloves and goggles. By my calculations - and borne out by the gas bills I saved £40 in the first year - so pay back 3 years. The improvement in energy saving by going to 300 mm of insulation is by comparison quite small and would take a long time to re-coup the additional cost.
The moral should be 'if it ain't broke, don't fix it' but when it needs replacing go for the most cost-effective/energy efficient replacements.
dave, Kent, UK
Looks like the RICS has finally made a stand for common sense. If there is any need for these measure, and the truly scientific data on this is still, at best, questionable, and if our government genuinely want change, then why shouldn't we see the removal of VAT, tax refunds on money spent on these measure plus grants. It's about time the Ecological movement got down off their soapbox and tried coming up with practical ways to fund their measures. Of course it's easy to criticise when most of the members and spokepeople have never owned their own home, run a business or had to be fiscally accountable in any way, shape or form.
If I were looking at these options, I would be looking for hard, verfiiable figures giving me return on investment numbers, with no serious, credible scientific arguments in place this should be the only basis anyone should reasonably consider investing in these dubious 'improvements'. If the numbers don;t add up, forget about it!
D Allcock, Preston,
The figures in the graphic are in cloud cuckoo land.
£761 to lag the tank? £755 for loft insulation?? £2,240 for thermostatic radiator valves? And the very, very minimum saving on solar thermal is £75 per annum. All of the costs are between 5-8x exaggerated over real world prices. I'd be interest in seeing the actual report too.
Jonathan Harris, Reading, Berkshire
These findings would be obvious to anyone who has researched home energy savings. My conclusions were that most so called green alternative methods are major net contributors to carbon levels as the energy used in their production, installation and maintainence is far greater than the energy saved over the expected lifetime. Fiddling with the tax treatment and providing incentives does nothing to alter the energy equation.
JR, Shefford,
anyone got a url for the survey?
Roy Davidson, Stornoway, UK
As an RICS member I am very disappointed by the stance of this report. Firstly, it ignores the fact that in many cases making improvements will enhance the value of the property, and, secondly, there are often non-financial benefits too - for example replacing old single glazed windows with double glazed ones is likely to significantly improve comfort and better heating controls can give you a home that it neither too cold nor too hot.
There are 'improvements' that make no sense at all e.g. small wind turbines on city houses; others need to be considered on their merits. There's little point in replacing a perfectly sound boiler, but if you've been told that yours is on its way out it may make sense to replace it sooner rather than later and start saving money.
Tony Bryer, Twickenham, UK
The article is factual correct, but sends the wrong message.
The homes were are building are the same as they were in 1950 with a little extra insulation. And they are bigger.
yes install solar panels in the rainy cloudy countries is seemingly pointless.
in sunny parts of the world, running solar panels to offset your costs on electricity is a smart thing to do. solar water is more expensive yes, but still cuts costs. Both reduces the drain on fuel.
Wind would be a good source for power in Great Britian. Geothermal may be a source source of cheaper heat too.
alex, NJ, USA
And if taken into account the amount of energy consumed
to manufacture transport and install thses products
+ the energy used ot despose of the same at the end of there
usefull life the benefit to the enviorment if any is doubtfull.
peter, Halifax, UK
Is there a url for the report?
Roy, stornoway, uk