Rishi Sunak’s Spring Budget, though light on construction-friendly measures (except for a cut in fuel duty), did have one big announcement for those interested in how we might actually get to zero carbon.
Namely, that the normal 5% VAT levied on energy efficiency measures for homeowners will be abolished for the next five years.
This really focuses the mind, and should be the boost to get a large chunk of the retrofit projects needed to remedy the situation.
Homeowners will think twice about whether ‘business as usual’ is sustainable
20% on other supplies
However, where are the incentives to housebuilders to help them offset the added costs of cutting carbon in new homes that will be built to the new Future Homes Standard 2025?
Or will build-out rates again be hampered by this no doubt very difficult to absorb extra inflation laid at their door?
It’s unlikely to be easily passed on to first-time buyers, despite the continued lag between supply and demand.
Some experts have also raised the issue that if energy efficiency measures such as heat pumps or insulation are installed along with the range of other required materials such as pipes that normally take place simultaneously, they will likely come under the normal 20% VAT that will still be applied to those.
This needs to be urgently clarified.
Kicking the can
We need to reach net zero by 2050 (2030 according to some architects, but we can probably ‘park’ that idea). But with limited measures like Sunak’s, are we still kicking the can down an ever-shortening road when it comes to really hitting zero in 2050?
It’s estimated that around 80% of the buildings currently standing in the UK will still be there in 2050, so much more is needed from Government to genuinely intervene and almost force the retrofit solutions to happen.
Despite all the talk around new heating systems, such as heat pumps in the light of the imminent FHS, houses are being erected now with condensing gas boilers in them.
Dealing with this is where the real effort needs to go, i.e. somehow helping housebuilders get out of this mindset of ‘business as usual.’
When the energy price hikes kick in this week, that will really make homeowners think twice about whether ‘business as usual’ is sustainable.
Are we simply storing up a major challenge for the next decade?
Loans for homeowners are not the answer – remember the Green Homes Grant?
Something needs to happen at the supply end, in both retrofit and new build.
An architect (at SPPARC) recently pointed out, if the government spent what it has spent on the Palace of Westminster refurbishment on funding low-carbon heating upgrades and insulation, almost 19 million homes could have seen improvements by 2030.
If true, that is a staggering realisation.