This is Year Zero

The government’s call for all homes to be zero carbon by 2016 has sent the industry into green overdrive. In the month since the announcement firms have been forced to ponder just how this will affect their long-term business plans.

At a Home Builders Federation (HBF) summit last week, housing minister Yvette Cooper told the industry that she wanted “a revolution” in the way houses were built. This could mean anything from local energy networks in all new developments to the installation of solar panels as standard.

However, Cooper conceded to the 50-strong audience – which included groups as diverse as trade bodies, the energy regulator Ofgem and environmental group WWF – that housebuilders could not tackle the issue alone.

She said: “We need to change the way we heat and power our homes. We need new partnerships between housebuilders, utility companies and local councils to deliver local energy and renewable energy to our homes as well. Whether it be turf or solar panels on the roof, wind turbines in the garden or heat pumps below the cellar, we need to develop the environmental technologies of the future.”

Although the potentially costly plans (see picture, below) have been welcomed across the industry, they have thrown up a set of challenges for which it is unprepared – not least the establishment of unprecedented commercial and political relationships with utilities companies and green lobby groups. As Paul Pedley, executive deputy chairman at Redrow Homes, who attended last week’s meeting, points out, the volume building of zero carbon homes is unchartered territory: “It’s like sending a shuttle into space,” he says. “We need to know what we don’t know yet.”

 

A larger version of this image can be found here

The challenges

Stuart Baseley, the executive chairman of the Home Builders Federation, who is widely credited as the industry’s driving force on this issue, says the summit highlighted several key issues. These include:

• The definition of zero carbon
• The development of energy-efficient products
• The role of industry and government
• The role of those actually living in the homes, who can help by, for example, switching off unwatched TVs.

“It’s all very well for government and industry to set off determinedly down this path,” Baseley says of the last point. “But it is imperative that we take consumers with us. We will definitely fail if we don’t.”

Baseley acknowledges the whole process requires millions of pounds in funding, although more precise figures are hard to come by. It is thought that public money will be diverted from existing R&D schemes, such as the DTI’s Foresight (which explores innovation in science). Baseley says the private sector will contribute, but he is also keen for the government to put new money in.

“There is no formal request yet but I don’t intend to be backward in coming forward when asking for money from them,” he says.

It’s like sending a shuttle into space. We need to know what we don’t know yet

Paul Pedley, Redrow Homes

As a crucial aid to industry, the HBF will draw up a 10-year plan setting out dates for when the prototypes of green homes should be finished. This will be discussed in more detail next month at a meeting with the Construction Products Association, which is drawing up details of the plan.

Baseley has also invited five or six senior figures to form a steering committee dedicated to co-ordinating and implementing the plans at a strategic level. Committee members will include Baseley, Yvette Cooper, Paul King, director of campaigns at the WWF, Michael Ankers, the chief executive of the Construction Products Association, and John Callcutt, the the head of the housing sustainability taskforce, and a top-level local government official.

Changing role

The upshot of all this is that the housebuilder’s traditional role is going to change. Truly zero carbon developments can only be achieved using renewable energy sources – generally the closer to the development the better – which is not residential developers’ area of expertise.

As Cooper points out, a new breed of deals will have to be struck between the industry and utilities companies. Baseley agrees. “Housebuilders are going to have to work in partnerships in a way they never have before,” he says. “Previously, there have been individual collaborations between developers and utilities, but we have never worked together on a project as significant as this before. Together, we have to fundamentally change the footprint of our industry. It is particularly tough because of the 200,000 units the industry is expected to produce every year.”

So, housebuilders will be struggling to master a defamiliarised industrial process in time to meet a strict 10-year deadline. The biggest companies, such as Redrow, are putting together business plans to do just that (see timeline, below). Most of those who attended the summit believe, for the moment at least, that it can be done – although many say it will be tough.

Stephen Stone, chief executive of Crest Nicholson, sums up the general mood when he says it is imperative to start straight away. He says: “There was pretty much universal agreement that the government has set down a pretty tough challenge to the industry. There’s no time to waste.”

John Slaughter, a spokesperson for the HBF, is slightly more cautious. He says “There is a general willingness to work with the 10-year proposals. But there is also a realistic recognition that this is extremely challenging … It is clear there are some real issues to get to grips with. Nobody can say for sure what the outcome will be.”

However, critics have pointed to problems, not with the 10-year deadline, but with the fact that zero carbon targets have been set in isolation from other sustainable policies, such as the need to build homes close to transport links.

Keith Miller, chief executive of the Miller Group, says the government needs to look again at where it gives permission to build homes. He says: “I don’t think the government is being honest about the policy. What’s the point of having a zero carbon home if a person has to travel 80 miles to get to work?”