UK

Ministers want us to go green, but for homeowners, the sums seldom add up

Green dream: Many eco measures are promoted to consumers as cost savings when they are anything but

Chris Simons, 32, reckons he is pretty green. When he and his partner, Oliver, moved into their new home, just before Covid hit, they were keen to make it as eco-friendly as possible. 

Half the garden was turned into a wildflower meadow. They installed a pond to encourage insects and wildlife. 

And then they turned to the house, a detached four-bedroom property in Norfolk, built in the 1920s. This is not attached to the gas network: it is heated using oil. 

The first thing Chris, who works in shipping, considered was a heat pump. A new alternative to a traditional gas boiler, it is considered much more environmentally friendly and is popular in continental Europe. 

Here, the heat pump is very slowly gaining traction, with the Government setting a target of installing 600,000 a year (currently just 25,000 are being installed). 

The idea is that it takes air and warms it over a heated coil, using electricity, before circulating it around the home. 

Mr Simons consulted a boiler expert he trusted. ‘His immediate response was to laugh. ‘Do you have the best part of £20,000?’ was his first question. We didn’t.’ 

Indeed, Boris Johnson is reportedly considering plans to delay a ban on new gas boiler installations by five years, to 2040, over concerns that the eco-friendly alternatives are too expensive. 

The next thing Chris and Oliver looked at were the recommendations in the Energy Performance Certificate (EPC), which all home sellers and landlords have been forced to provide to buyers and tenants since 2007. 

It recommended insulating Mr Simons’ solid floors, cutting down on the carbon emissions his home was responsible for, and the measure would save £84 a year in reduced heating bills. The cost to install it? Between £4,000 and £6,000, the EPC estimated. 

‘That was just totally unworkable. Nobody in their right mind would have their floors entirely ripped up and completely replaced to save £84 a year after investing a possible £6,000. It’s crazy.’ 

He will hang on to this old oil boiler until it needs replacing and leave his floors as they are. ‘I’d love to be more eco-friendly, but the economics have to stack up,’ he says. 

And this is the problem. Many green measures are promoted to consumers as cost savings when they are anything but. Indeed, some eco-improvements are such bad value they could take as much as 70 years or more to return the initial cost. 

It is now quite easy for potential homebuyers or tenants to see how much money they can save on their bills thanks to these EPCs. 

Just like the A to G ratings you get for washing machines or fridges, the property is ranked from A in green — the most energy-efficient — down to G in red — the worst. The average home in England and Wales is D, and the Government wants all homes to move up to at least a C — although, as the annual English Housing Survey pointed out this month, the majority are still below that.

Mr Simons’s home is a D, like many in rural locations. To get to a C, he would have to spend £18,000, he estimates. ‘And I’d just never recoup that in my lifetime.’ 

The EPC lists recommendations for each property, saying what could be done to improve its eco-credentials. The most common recommendation is installing solar panels on the roof — something suggested for 6 per cent on all EPCs. 

The average cost of installing the panels is £6,200, according to Savills, the estate agent, which has crunched the EPC numbers. But the average annual saving on your energy bill, if you install them, is £120 — which means it would take more than 50 years to make your money back. 

‘Are you still going to be living in the property in 50 years? Are you even going to be alive?’ asks Graham Pack, a senior chartered surveyor. ‘Some of the paybacks listed in the EPCs are just stupid.’ 

He is not the only one to think the greening measures suggested in these documents sometimes represent terrible value for money.

‘Implementing the recommendations suggested in an EPC can be eye-wateringly expensive,’ says Henry Pryor, a property expert who helps buyers find homes. 

It’s true that there are some measures that are not just cheap but also generate an immediate return — such as spending £35 on a hot water cylinder jacket to save £85 a year. Lagging your loft with thick insulation gives you a financial return after less than two years. 

But most of these quick wins have already been implemented across the country — especially loft insulation, where more than two-thirds of homes have it installed. The measures that would make the biggest difference to the environment tend to be the ones that have the worst rates of economic return. 

Malcolm Keay, senior research fellow of think-tank the Oxford Institute for Energy Studies, says: ‘Some energy-efficiency measures are worthwhile, so EPCs are not entirely stupid. But there is an overemphasis on it. And it gets increasingly expensive the more you do. There are declining marginal returns.’ 

He adds that, once you have lagged your loft or installed cavity wall insulation, each further measure has less of a noticeable impact. The Government is on a mission to make the nation’s homes more green, arguing that domestic energy use accounts for about 14pc of UK greenhouse gas emissions. It wants every house in the country to be rated at C or above, as part of its stated mission for the country to hit net-zero emissions by 2050. 

To help us get there, it has mandated that any home that is rented out by a landlord must be rated a C or above by 2025. 

Timothy Douglas, campaigns manager at letting agent body Propertymark, says: ‘There will obviously be a percentage of landlords that will exit the market, who just can’t stomach it.’ He points out that some of the big measures needed to upgrade a property are very difficult in older homes. ‘It’s a stumbling block.’ 

Indeed, the Government has laid out the true cost — borne entirely by homeowners and landlords — of making our homes more green in this month’s English Housing Survey. It said that, despite improvements, 60 per cent of homes in England are still below the C target, with the huge majority (47 per cent) of those homes in band D.

Buried in the report were some truly alarming costs. For a band D home to reach band C, it would take £6,472 in upfront costs and would save the homeowner just £179 a year — meaning the homeowner would enjoy a payback only after an astonishing 36 years. Those in a band E property would have to spend much more to reach band C: £13,285. 

The payback would be quicker, but still a hefty 22 years. Many experts point out that the emphasis on saving money is possibly the wrong way to persuade consumers to improve their homes, or for the Government to hit its target. 

‘It is very difficult. In the long run, we need to persuade people to change their heating systems, possibly by banning gas heating,’ says Mr Keay. 

‘The aim is not to reduce our emissions, but net zero. The Government wants people to switch to electricity [to cook and heat their homes] because it is much less carbon-intensive. But it’s cheaper to use gas. That’s a huge barrier to most people. Unless the Government is very brave and taxes gas, there is very little incentive to switch.’ 

For now, the Government is putting the onus on homeowners to improve how green their homes are out of their own pockets. So which measures might help the planet but will hit your wallet hard. And which make some economic sense? 

Using research from Savills and property site Rightmove, plus calculations using data from the Government-backed group that promotes green measures, the Energy Saving Trust, Money Mail has crunched the numbers to show the average cost for a typical three-bedroom home in England. 

SOLID FLOOR INSULATION 

Cost on average: £5,000

Saving: £70 

Years to enjoy a return: 71 

There are two types of floor insulation. The first is old-fashioned floorboards, with spaces between the joists. To insulate these is disruptive for the homeowner, but simple to do and costs about £1,000. 

Insulating a solid floor, however, is far more complicated and involves fixing insulation boards to the floor, raising the whole floor by a few centimetres and moving skirting boards and door frames. 

Rightmove estimates this costs £5,000 on average and is recommended for two million properties in England and Wales. The Energy Saving Trust estimates the most a homeowner could save, if they lived in a detached house, is £70 a year. This would fall to as little as £30 a year if it was a mid-terrace house.

DOUBLE GLAZING 

Cost on average: £4,900 

Annual saving: £75 

Years to enjoy a return: 65 

An obvious and old-fashioned measure to stop your home losing heat. But also astronomically expensive, especially if you install wooden-framed windows — which may be necessary if you live in a conservation area. 

The Energy Saving Trust calculates installing this style of window will cost the average homeowner £15,000 and save, at most, £95, taking 158 years to make a return.

SOLAR WATER HEATING 

Cost on average: £4,500 

Annual saving: £70 

Years to enjoy a return: 64 

This is when you install a solar panel on your roof or South-facing wall that warm up in the sun and then heat water stored in a tank. This is used for showers, baths and hot water. Great in summer but pretty limited in winter, so you need a boiler to supplement any heat generated. 

Despite its limitations and very poor financial return, it is suggested on 60 per cent of all EPCs. 

SOLAR PANELS 

Cost on average: £6,200 

Annual saving: £120 

Years to enjoy a return: 52 

‘There used to be a [government] tariff which more than covered the cost of installing solar panels,’ says Andy Smale, who runs Expert Energy, a consultancy, based in Hampshire. ‘It was quite a good investment. But that’s been progressively chipped away and now removed altogether. So it now just comes down to what you can save on your bills.’ 

It is possible that you can export any energy you generate but don’t use to the National Grid, which is estimated to earn a typical homeowner £190 a year. If you add that to the bill savings, you would get your investment back in 20 years, not 52. 

SOLID WALL INSULATION 

Cost on average £10,200 

Annual saving: £260 

Years to enjoy a return: 39 

Older properties, typically made from bricks or stone, do not have cavity walls that can be filled with insulation. Insulating a solid wall is a major project, involving adding panels to the inside of your walls. ‘It can be expensive and disruptive,’ says Andy Smale. ‘You need to take off skirting boards, sockets, door frames etc when you do inside.’ 

Outside wall insulation requires fixing a 5cm layer of insulation and plastering over the top, cladding it or adding bricks slips. ‘It’s quite a lot of labour,’ he adds. 

AND ECO UPGRADES THAT CAN PAY OFF 

LOFT INSULATION

Cost on average: £270 

Annual saving: £180 

Years to enjoy a return: 1.5 

Cheap, usually, and effective. The only issue is that most lofts have already been insulated. A mere 11 per cent of EPCs suggest this as a measure worth undertaking. 

CAVITY WALL INSULATION 

Cost on average: £475 

Annual saving: £125 

Years to enjoy a return: 3.8 

Cavity wall insulation is only suitable for some properties.

It tends to be only post-war homes that have the cavities that need filling with insulating foam. Again, most have already been done. 

Just 8 per cent of homes are recommended to have this done.

INSULATE HOT WATER TANK

 Cost on average: £35 

Annual saving: £80 

Years to enjoy a return: 0.4 

This is a simple and cheap measure. Even if you are not good at DIY, most people can fit it themselves (which would redce the cost t o about £20). 

There are, however, fewer than one million homes left in England and Wales with hot water tanks that do no t have insulation. 

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