The future of Britain’s housebuilding is not looking so green after the latest changes announced by the Tory Government.
The most surprising of which was to scrap the zero carbon homes plan for new homes and the Green Deal Home Improvement Fund for existing homeowners.
And that’s not all! There are a number of other green policies that have been axed.
We take a look at all of the changes and how they will affect house builders.
1. Zero Carbon Homes Policy
The plan was introduced in 2006 and set out plans for all new homes to be zero carbon by 2016. Meaning house builders would be required to use renewable energy where possible in the build process and ensure that the energy used to heat and light the home would be offset by the energy generated on site. This scheme has now been withdrawn by the government which may make the EU target of nearly all new homes to be zero carbon by 2020 less achievable.
2. Green Deal Home Improvement Fund
The aim of the green deal was to help existing homeowners lower their energy bills by installing energy saving measures such as more efficient boilers, minimising draughts and insulating the property. The government’s reasoning for abolishing the fund was because there was relatively low up take from homeowners. However there are no plans to replace the scheme to help reduce carbon emissions of such homes which make up around one third of the UK’s total carbon emissions.
3. Solar Subsidies
Recent changes to solar subsidies will see large solar projects of between 1 and 5MW now having to fund themselves or risk not going ahead. There is also speculation that the “feed-in tariff” which provides support for solar panels on domestic roofs could be scrapped due to the potential overspend on solar schemes that have already been committed to until 2020.
4. Onshore Wind Farms
The government has put a stop to subsidies supporting onshore wind farms saying that such developments need to fund themselves in a bid to save the taxpayer money. This form of renewable energy is one of the most cost effective methods so it would be a shame to see such developments come to a halt due to a lack of interest from investors to keep it moving forward.
5. Opening the door to fracking
Sites of Specific Interest may now be automatically granted permission to allow fracking across England, Wales and Scotland provided the companies can gain approval from planners. This is bad news for environmentalists that have been lobbying against fracking for shale gas.
6. Biomass Fuel
The government are introducing a cap on the level of subsidies for other renewable energy projects such as biomass fuel production because of the current overspend on renewable subsidies for solar energy. This could lead to a reduction in investment across the whole renewable energy sector.
7. Green Investment Bank
The Green Investment Bank was developed in 2012 to support green projects such as offshore wind farms and energy efficiency initiatives. However the government is now proposing that 70% of the bank be sold off which could affect future investment into renewable energy projects.
8. Green Tax Target
The green tax target was set up under the coalition government to steadily increase the revenue generated through green/environmental taxes to reinvest into renewable energies. The new government have abandoned these targets as a way of reducing the cost of renewable energy being passed onto the consumer. It is estimated this cost could amount to up to £170 per year by 2020 due to the increasing costs of subsidising green energy projects.
9. Green Car Incentives
There will no longer be an incentive to buy a green car from 2017 after the government plans to make the cost of road tax the same for all cars. Previously the purchase of green cars was incentivised by offering cheaper/free road tax due to the lower emissions of the car over standard vehicles. However, without this incentive there is nothing to distinguish between a Toyota Prius and a Lamborghini as the road tax would be £140 per year for both. This means that it will actually cost up to £1,000 more to buy a green car over a 7 year period than it is today.
The underlying message of these changes is that the cost of subsidising renewable energy has been previously underestimated by the government which has led to the withdrawal of the above green deals for consumers and house builders.
As such it is going to become increasingly challenging to meet the target of zero carbon new homes by 2020.
By Anna Cross
Please Note: Every care was taken to ensure the information in this article was correct at the time of publication. Any written guidance provided does not replace the reader’s professional judgement and any construction project should comply with the relevant Building Regulations or applicable technical standards. However, for the most up to date LABC Warranty technical guidance please refer to your Risk Management Surveyor and the latest version of the LABC Warranty technical manual.