Why the government is failing on Allowable Solutions

Allowable solutions triangle

UK Government’s current roadmap to zero carbon building is for at least a minimum level of fabric performance, a minimum level of overall carbon compliance on site and then anything remaining, (that falls short of the regulated zero carbon definition), can then be made up for by ‘Allowable Solutions’.

The developer can choose to go further on the fabric and/or carbon compliance minimums in order to reduce their Allowable Solutions commitment, but this is not always going to be possible or economically reasonable.

An Allowable Solutions consultation was launched in August 2013 and closed in November 2013. Six months on and the results of that consultation have still not been released, which suggests that it’s a difficult one to get right and which puts the Government’s 2016 commitment in doubt.

Zero Carbon and Allowable Solutions

The UK Government have re-stated that their aim is to ‘deliver zero carbon new homes from 2016 and zero carbon new non-domestic buildings from 2019’. They have reaffirmed this at various stages , but progress to putting everything in place seems slow.

The European Energy Performance of Buildings Directive 2010/31/EU (EPBD recast) states that:

“1. Member States shall ensure that: (a) by 31 December 2020, all new buildings are nearly zero-energy buildings; and (b) after 31 December 2018, new buildings occupied and owned by public authorities are nearly zero-energy buildings.”

The idea of ‘Allowable Solutions’ is to fulfil the residual carbon obligation for shortfalls from on-site zero carbon performance. The concept is initially proposed for new dwellings, but this concept could also be applied to non domestic buildings. The shortfall, proposed in the consultation as based on 30 years of emissions, would be converted into a cost for that carbon that a developer or builder would then have to pay to save carbon emissions elsewhere via ‘Allowable Solutions’.

The proposal was that developers/builders could either:

  • Invest time and effort into considering the cheapest route for them (on-site, near-site or elsewhere), or;
  • Contract with a provider of schemes with assured savings, or;
  • Place money into a central fund that would be available for schemes to draw from.

Either way, a ‘certificate’ of achieved carbon savings could then be passed to Building Control alongside the Energy Performance Certificate and other as-built submissions to show that overall the requisite zero carbon performance had been equivalently achieved.

Cost of Carbon

The Government consultation proposed possible costs of carbon of £36/tCO2 (carbon price floor), £60/tCO2 (non traded carbon price) and £90/tCO2. To encourage more to be done on site, a cost of £90 per tonne of CO2 would be the more realistic price. The Government’s preferred option appears to have been the £60/tCO2 level . For a typical detached or semi detached property, this level of shortfall obligation might be somewhere around the £2K mark, or thereabouts.

My personal feeling is that Allowable Solutions should be set at a level that encourages builders to go further than the minimum on site.

The concern is that if the cost of carbon is too low, then no-one would be incentivised to do more than the minimum; if it’s too high, then the Government will be accused of burdensome taxation on builders –  a ‘carbon tax’ on new development.

For Allowable Solutions to really work, ideally both new homes and new non-domestic buildings should follow this model to increase the available pot of money for larger scale carbon savings to be achieved.

What are Allowable Solutions?

Some possible types of ‘Allowable Solutions’ include:

  • Housing retrofit projects (possibly as a long term option for replacing regional development funds, but you could also potentially see this funding as a route for financing ECO and as a means to support more costly measures under Green Deal such as solid wall insulation).
  • Community renewable energy projects (providing equity to get these off the ground would assist with viability).
  • Local low carbon Investment Funds. Local Authorities in particular have been suggested to consider putting in place plans to reduce emissions locally, that could then attract funding via allowable solutions.

Many feel that locality of funding should be prioritised; Local Authorities are keen to see the allowable solutions pot spent in the locality of the developments that the funding comes from. Some Local Authorities have already undertaken some work to trial the concept using Section 106 agreements. Government and Housebuilders may not necessarily agree with a localism bias – the money might well achieve greater carbon savings if spent elsewhere, especially when the London prices are considered.

There is fairly common agreement that allowable solutions need to be:

  • Cost effective (viable), with a suitable balance between cost and carbon savings
  • Measurable, with a certainty of achieving the carbon savings stated.
  • Flexible, allowing a variety of routes to show savings to be followed.
  • Simple for homeowners and suppliers to understand.
  • Additional (no double counting of carbon savings).

Shaky Ground

Progress so far seems  limited, there have been suggestions that some elements of Government are allegedly unwilling to ‘gold plate’ European legislation, by rushing to comply ahead of the required timescale (which makes the 2016 commitment somewhat shaky).

From a presentation I attended yesterday at Greenbuild Expo, the Zero Carbon Hub’s view is that work towards fabric minimum standards is around 95% there, work towards carbon compliance levels is around 75% there, but Allowable Solutions is only around 5%.

There have also been some suggestions that our European partners are not so sure on the idea of Allowable Solutions and would prefer low/zero carbon developments to be achieved primarily on site, but the wording of the directive largely leaves it up to the member states to define the requirements and the Government seems to be confident in their interpretation.

It looks like there is a lot still to do and someone needs to pull their socks up if the 2016 commitment (or even the 2020 commitment) is to be met.

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Jon Ducker is a qualified energy assessor working for Kingspan Insulation Ltd. He has an extensive knowledge of energy efficiency, renewable energy systems and sustainability in buildings with an expert knowledge of the relevant sections of buildings regulations and standards and their interactions with SAP. He provides authoritative advice regarding energy assessments for a wide range of public and private sector clients.

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