Housing Minister Grant Shapps yesterday announced that the government will set up a community energy fund which will be used to pay for district heating and renewable energy schemes. Developers would pay into the fund as a way of meeting their carbon reduction obligations rather than having to pay for expensive onsite renewable or directly fund offsite energy schemes. Under the definition of zero carbon developers are allowed to offset 30% of a new development’s carbon emissions offsite, the so called “allowable solutions”. Nevertheless, not everyone regards this as a good solution. Ian Baker, Managing Director of Galliford Try Homes, commented on Grant Shapps’ announcement and said:

“While we fully support the government’s drive to improve the energy efficiency of the housing stock, we still need further clarity on the definition of zero carbon homes. New build homes already deliver the greatest energy efficiency through design, materials, high levels of insulation, low energy lighting and highly efficient boilers and appliances which reduce fuel and water consumption.

“Mr Shapps’ latest announcement is introducing carbon footprint offset, rather than needing to include further changes to the fabric of the homes to achieve targets. All solutions will increase costs that the majority of buyers would not recognise or pay for, such as advanced eco-friendly technologies with the obvious benefit of a reduction in fuel bills.

“We are concerned that further government policy to push energy efficiency beyond practical limits will have potential lifestyle implications and add substantially to build costs on top of all the other many regulatory costs housebuilders are incurring. This will impact on an already constrained housing supply.

“In addition to defining what a zero carbon home entails, more needs to be done to educate consumers on the benefits of energy efficient homes. The government and zero carbon hub should work alongside housebuilders to assist in promoting the eco benefits of new homes for the environment as well as the potential cost savings to the buyer. While we welcome the work in achieving zero carbon for new homes, it is also important that the government also looks to improve the energy efficiency of the existing housing stock and incentivise homeowners.

However, the CHPA, which represents community heating (district heating)enterprises, welcomed Shapps announcement regarding the setting up of a community energy fund, to enable new homes to be zero carbon from 2016, allowing developers to make payments to the local authority to support local energy schemes, 'such as a local district heating scheme'.

Ian Manders, Deputy Director of the CHPA, said “Grant Shapps’ statement brings widespread low-carbon local energy provision closer to reality. A community energy fund, with the CIL [2] and private investment, should help provide much of the finance for good quality community heating schemes. These can cut carbon emissions and heating bills for not only for new development, but also existing buildings nearby.”

“Builders face a daunting task if they have to provide the energy needs of a new development solely from on-site technologies. Most developers welcome being able to connect to a community energy scheme, even if it means making a financial contribution.”

The CHPA also welcomed the Minister’s announcement of continued funding for the Zero Carbon Hub, which had been under threat of closure. Manders concluded: “The Hub has proved to Government that it can provide practical solutions to achieving zero-carbon new development.”