Sums fail to stack up for Green Deal QS analysis shows

1 April 2011

The cost of commercial building improvements under the Green Deal will outweigh the savings made, according to a new study, Building reported.

Under the government’s Green Deal initiative, loans for energy efficiency improvements are paid back over 25 years by savings on bills. But a new study by QS Cyril Sweett reveals that the majority of improvements will not meet the initiative’s “golden rule”, where energy bill savings must be equal to the costs of the work.

The firm modelled energy efficiency improvements to a primary school, office, industrial unit and retail warehouse to see how much they would cost and how much energy would be saved.

It revealed that changes to building fabric, services improvements and renewable energy installations produce insufficient savings to pay back costs on the majority of non-domestic buildings.

Cyril Sweett said the Green Deal in its current form it would only work for “very poorly performing buildings and the lowest of low hanging fruit.” It added the government had a long way to go to develop the details of the scheme.

A DECC spokesperson said:“We cannot comment on this research as we have not seen it. However, under government plans only a charge that meets the golden rule can be recouped through the energy meter at a property.”

The news follows widespread disappointment at the green measures in the Budget which watered down standards for zero-carbon homes.

In a separate story Construction News reported that ministers are planning to launch proposals for a Green Deal-style incentive scheme for new build homes, to allow housebuilders to pay for the costs of building zero carbon homes through future electricity savings.

The initiative is expected to go out to consultation soon.

Contractors are to start submitting projects they hope will be financed by the Green Investment Bank although the bank will not have the power to lend until 2015/16, Construction News reported.

The UK Green Building Council is to submit a list of projects it would like to be considered for finance by the GIB after consultation.

The UKGBC said these could range from large-scale offshore wind projects to community-led initiatives in the waste-to-energy or combined heat and power sectors.

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