Green group has launched task group to report on practical steps for introduction ‘pay as you save’ mechanism

The UK Green Building Council has launched a task group to report on the practical steps needed to make a new funding mechanism for domestic refurbishment a reality.

Under the “pay as you save” system:

  • A package of low-carbon measures in the home would be funded by a third party, with no up-front cost to the householder, landlord or tenant
  • The cost of the measures would be recovered through a charge on the property over a period of 25 years, regardless of ownership
  • Even accounting for the recovery of those costs, the householder would still make savings on their bills.

The idea was mooted in the government’s recent Heat and Energy Savings Strategy (HES) consultation but the document did not contain enough detail to set up the mechanism.

The UK GBC’s work is designed to answer a number of practical questions and make recommendations on the implementation of such a scheme, including:

  • How best to leverage private sector finance
  • How the billing mechanisms could work and which approach is best
  • What are the legal implications of attaching such a charge to a property and what, if any, changes would be needed?
  • Could the scheme also help reduce the upfront costs of zero-carbon new-build homes?
  • How do we ensure appropriate standards are met?

David Adams, currently chair of the Zero Carbon Hub, will lead the task force. That body recently submitted its recommendations about the definition of a zero carbon home to Department for Communities and Local Government (CLG) under the Department’s supervision. The government will second an observer to UK GBC’s pay as you save task force.

Meanwhile, the Conservative party is committed to a form of the scheme through the “entitlement” policy contained in the Low Carbon Economy green paper.

Adams said: ““Existing government schemes are good at delivering cavity wall and loft insulation and low energy lighting. But to make the sort of carbon reductions required of the household sector over the coming years, we need a fundamentally new way of financing the upfront cost of energy efficiency and low carbon measures.”

The task group’s report will be published in early July 2009.