The majority of social landlords feel unprepared for the government’s flagship programme to carry out energy efficiency refurbishments of Britain’s housing, despite it kicking off in just five months’ time.

An exclusive survey of 127 social landlords carried out by Sustainable Housing and contractor Willmott Dixon reveals that, even though the green deal is scheduled for a ‘soft launch’ in October, most of the respondents are unprepared and unsure of the benefits of the government’s flagship retrofit scheme.

Under the green deal, households can have energy efficiency measures such as insulation installed at no upfront cost by a green deal provider. The cost is paid back in instalments using the resulting energy savings through an extra charge on the property’s electricity bill.

Asked about their preparedness for the green deal, just a third scored their organisation as ‘highly’ or ‘very highly prepared’. This is despite one in three respondents saying that the green deal will be very important in achieving their goals for improving the energy efficiency of their stock.

Richard Griffiths, policy consultant at the UK Green Building Council, said: ‘There is just a lot of detail to be resolved and because of that, quite a lot of organisations are not quite thinking they can prepare for its arrival.’

More than 60 per cent of respondents said reducing fuel poverty or helping tenants save money on their heating bills was the most important reason for seeking to improve the energy performance of their stock. Another 10 per cent wanted to improve tenants’ quality of life. ‘To reduce fuel poverty and increase [the] benefit for our residents. Carbon reduction comes after this,’ was a typical comment.

But a significant minority of 41 per cent of respondents did not know how many of their tenants are in fuel poverty, and almost as many didn’t know how many of their homes are in need of an energy-saving retrofit.

David Adams, technical director at Willmott Dixon Energy Services, said this latter figure was unsurprising, as there were previously no policy incentives to carry out more difficult retrofit projects.

According to Communities and Local Government department statistics, 17 per cent of social housing tenants in England were in fuel poverty in 2011. But of those survey respondents who did know the levels of fuel poverty among their tenants, 60 per cent said the proportion who spend more than one tenth of their income on heating their home is actually above 20 per cent.

The survey also revels that most social landlords have still not decided on the role they will play when the green deal begins.

More than half of the social landlords that responded remain in limbo on whether or not they want to become a green deal provider. Under the government’s flagship retrofit policy, providers will organise both the retrofit of a home and the financing.

Housing association Gentoo, which has 29,500 homes, is among the first of a handful of organisations to commit to the provider role, but the survey results suggest they will be in the minority.

Far more respondents are planning to become facilitators of the green deal home retrofit programme, or partner with a green deal provider to offer retrofits of their stock.

Of those that are not already planning to become a provider, 48 per cent said their organisation might become facilitators, and 29 per cent would seek to partner up with a provider. Another 30 per cent of those who were not looking to become providers said their organisation will take no role for now.

‘It could be an attractive option, but it’s too soon to judge,’ said one respondent about financing its
retrofit programme under the green deal.

Of the 40 landlords which said they had a direct labour organisation, two thirds are assessing if they could carry out the retrofits.

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The government had been expected to confirm further cuts to the tariffs by early May with a view to the changes coming into effect from 1 July.

However, according to sources in the solar industry the government this week missed the deadline required to provide 40 days’ notice to Parliament ahead of any changes to the scheme. As a result ministers would have to delay cuts until mid-July at the earliest or else risk a legal challenge over the plans.

The news is likely to fuel hopes that the government will hold off from making further cuts until the market picks up. Recent installation figures show demand collapsed after the government changed the rules governing the scheme and halved the level of incentives available from April 1.

The latest figures show the number of installations dropped to 912 in the week ending 13 May, creating around 4MW of capacity – a huge reduction on the tens of thousands of installations undertaken during February and March.

Shadow Energy Secretary Caroline Flint will today call on DECC ministers to delay the latest round of planned cuts, warning such a move could derail DECC’s new ambition to deploy 22GW of solar capacity in the UK by 2020.

Total installed capacity for the past four weeks reached 17MW, against a four-weekly average of 71MW over the past year. Labour has calculated it would now take 169 years to reach the government’s target of delivering 22GW of solar capacity under the current deployment rates.

The Solar Trade Association (STA) has also requested a meeting with Barker to discuss ways to revive the flat-lining market and has urged the government to delay the planned cuts.

“We are facing an unusual set of challenges right now and it is fundamentally a problem of confidence and perception,” said Alan Aldridge, STA chairman. “We need all champions of solar – in government, industry and elsewhere – to help us get the message out that solar is still a great investment, particularly with energy bills on the rise again.

“But we also need government to show real sensitivity to the current situation and work with us to create a stable and growing market.”

This would require them to produce a low-carbon plan for their area, report on its implementation, and prioritise carbon reduction measures in their budget.

Under the green deal households will be able to get energy efficiency improvements to their home without paying up front. They will repay the cost of the work over time using savings from the fuel bills.

Extra funding will be available through the £1.3 billion a year energy company obligation to support measures where repayments would exceed the fuel bill savings.

The report argues local authorities have the potential to play a significant role in the reduction of carbon emissions from new and existing homes.

For new homes it says councils could impose higher efficiency standards that exceed building regulations, and ensure these are enforced, although it notes this would need to be resourced.

It also argues local authorities have an important role to play in reducing emissions from existing homes, particularly by encouraging participation in the green deal. However it notes there are a range of barriers to involvement in the green deal, including expertise, anticipated low take up of measures such as loft and cavity wall insulation, limited information, and financial and reputational risk.

‘Given the current fiscal situation, further incentives for local authority participation may be required,’ the report states.

Professor Julia King, a member of the committee, said: ‘The research we’ve done shows local authorities have the potential to significantly impact on the UK’s scale and speed of emissions reductions.

‘We are therefore asking both local and national government to address these issues. Local authorities need to show leadership and recognise their wider role in supporting local emissions reductions. The government needs to strengthen incentives for action by providing national funding where required and should consider introducing a statutory duty for area-wide low carbon plans.’

BT, EDF, BSkyB and Lloyds Bank are among the companies who have teamed up with the Government Procurement Service (GPS) and ministries including Defra and the Department of Energy and Climate Change (DECC) in an attempt to drive demand, investment and innovation in the renewable energy, green transport, and sustainable catering sectors.

For example, in 2014 the £800m contract for replacement vehicle purchase, hire and lease frameworks is up for tender, and the GPS wants a low emissions alternative to secure the deal.

While it says current battery powered cars are not suitable for most of its fleets, the body has today confirmed suppliers who can come up with low-emission vehicles offering range and refuelling times comparable to conventional combustion engine vehicles will be in pole position to secure the multi-million pound deal.

GPS has signed up to the procurement call along with BT, which has one of the largest vehicle fleets in Europe, boasting 26,000 commercial vehicles and 6,000 company cars, and is also seeking to reduce emissions from its transport infrastructure.

Similarly, signatories to a new public-private renewable energy compact have expressed interest in rolling out biomethane systems, if technology developers can come up with a means of supplying green gas to the grid rather than using it where it is created. BT has already committed to source a quarter of its energy from renewables by 2016 and estimates that it could use an extra 30 million cubic metres of biomethane every year if green gas could be supplied through the grid.

In addition, the initiative is also looking to the catering sector for potential carbon emission reductions. The sector’s total energy consumption is thought to be in excess of 21,600 million kWh per year, of which 30 per cent is used in commercial catering establishments and half in non-commercial catering such as schools and hospitals. However, the CLG estimates moderate improvements in efficiency and effective use of equipment could create savings of up to 20 per cent – equivalent to £80m per year.

Lloyds Bank and Nottingham University Hospitals NHS Trust, which serves three million meals each year, are among the signatories who have pledged to purchase progressively lower carbon catering goods and services, taking into account food procurement, transportation, distribution, preparation, and waste management.

At the launch of the new agreements this morning, Business Secretary Vince Cable said the initiative would promote more effective supply chain engagement and signal future demand for low carbon innovation, giving a timely boost to UK plc.

“A green economy has economic as well as environmental benefits,” he said. “It can help UK businesses manage risks arising from fluctuating fossil fuel prices and increase resilience, in particular from the impacts of climate change, and seize the opportunities from emerging markets both at home and abroad.”

The Department for Energy and Climate Change estimates that consumer bills by 2020 will be £94 lower with low carbon policies than without them.

The figures show that low carbon energy policies and measures could lead to an average household energy bill of £1,285 by 2020, whereas carrying on with business as usual will lead to average bills of £1,379.

The evidence backs up research by industry regulator Ofgem, which has shown household energy bills will be lower with more renewable energy than if we maintain the status quo.

This week Centrica, which owns Scottish Gas, warned that energy prices are likely to rise by as much as £50 a household as wholesale gas prices have risen again.

Scotland has the ambitious, but achievable, target of generating the equivalent of 100 per cent of electricity demand from renewables by 2020.

And new figures release earlier this year show that Scotland is ahead of schedule on its targets, with initial estimates suggesting 35 per cent of Scotland’s electricity needs came from renewables in 2011, beating the interim target of 31 per cent.

Meeting Scotland’s target of the equivalent of 100 per cent of Scotland’s electricity demand coming from renewables by 2020 will also deliver around 30 per cent of the UK Government’s renewable electricity requirements, helping the UK meet their legal obligations.

In 2010, Scotland exported 20.8 per cent of its electricity to the rest of the UK – a figure set to rise as we increasingly exploit our vast renewable resource and build the infrastructure upgrades we need.

Energy Minster Fergus Ewing said:

“Renewable energy is vital to Scotland and to the rest of the UK. It is essential if we are to keep bills down for ordinary families, boost the economy and meet our climate change targets.

“DECC figures show that every family in the United Kingdom will have energy bills nearly £100 lower in 2020 with low carbon initiatives than if we continue with the status quo.

“Ofgem’s Project Discovery has shown that renewable energy will actually lead to cheaper energy in the future than carrying on with traditional energy sources.

”Figures show bills for gas and electricity rose by £445 between 2004 and 2010, and that two-thirds of this rise was the result of increases in wholesale costs – precisely why we need to invest in our own secure energy supply.

“This week, Centrica, the company which owns Scottish Gas, warned that energy prices are likely to rise yet again by as much as £50 a household.

“Renewable incentives add only £15-20 to annual household utility bills in Scotland – a valuable investment in keeping future bills down.

“The job and investment opportunities that renewable energy provides to Scotland are too good to miss, with Gamesa recently deciding to invest in Edinburgh rather than Hartlepool, bringing around 800 new jobs to Scotland.

“Industry figures show there are already 11,000 renewables jobs in Scotland and £750 million was invested  in renewable energy over the last year – and this figure is set to rise. There is a pipeline of 17 GW of renewable electricity projects, nearly three times peak Scottish demand, with a total estimated capital investment of £46 billion.

“The United Kingdom needs Scotland’s renewable energy whatever the constitutional future holds –we should take advantage of Scotland’s competitive edge in the renewable energy revolution.”

The survey, which received 127 responses and is published in Sustainable Housing next Friday, also reveals that just 18 per cent are
considering becoming green deal providers.

Landlords were asked to score the expected popularity of the green deal with tenants on a scale of one to five, with five being high. Just 2.5 per cent picked five, while 16 per cent awarded a four. However, nearly half (45.4 per cent) predict it will prove unpopular and a further 14 per cent remain undecided.

Under the green deal, households are to be offered energy efficiency measures at no upfront cost that will make their homes warmer and save them money on bills. Private companies will pay for the works and recoup the costs through the resulting savings in households’ energy bills.

The scheme, which launches in October, has already come under fire for its ‘low ambitions’ from former climate change committee chair Lord Adair Turner because it will cut less than half the carbon needed.

The survey results follow Affinity Sutton’s green deal pilot programme published in October, FutureFit, which reported that just 4.8 per cent of the 800 residents approached showed initial interest in having their homes retrofitted.

Some landlords warned that tenants don’t want the hassle of the works, and said tenants are not sufficiently incentivised to take up the scheme.

David Adams, technical director of Willmott Dixon Energy Services, said: ‘I was surprised there weren’t more in the one and two category, because they are being asked to pay for something they previously got for free.’

A spokesperson for the Department of Energy and Climate Change said tenants will benefit from the green deal through extra energy company obligation support.

She said: ‘Initial trials have proved positive. A large social housing provider in the north east got 86 per cent of tenants to take part in a similar project.’

Setting out her government’s agenda for the next parliamentary year, the Queen said the government would bring forward an energy bill that will “propose reform of the electricity market to deliver secure, clean, and affordable electricity, and ensure prices are fair”.

She also confirmed plans to introduce legislation that will enable the launch of the government’s promised Green Investment Bank, and plans for a draft water bill to better manage water resources and rivers.

There had been reports, strongly denied by the Department of Energy and Climate Change, that the Energy Bill could be delayed or downgraded as the coalition sought to make room for alternative legislation, such as controversial reforms to the House of Lords.

However, the bill was included in the speech as expected and is now set to be put before parliament in the coming months.

The speech did not confirm the precise timetable for the next wave of bills and as such speculation will continue over when the energy bill will be finalised, although DECC sources have revealed they remain confident it will be formally published before the end of the calendar year.

The bill is the centre-piece of the government’s strategy to drive up to £200bn of investment into new low carbon energy infrastructure over the next decade, and represents the biggest shakeup to the energy industry since privatisation.

It is designed to bolster the UK’s energy security, tackle fears of a looming energy gap, and ensure the country meets its long term emission reduction targets, which require the effective decarbonisation of the electricity sector by 2030.

The proposed legislation is still being finalised, although it is expected to include a raft of measures that will drive up the cost of high carbon energy and incentivise investment in low carbon infrastructure.

In particular, it is expected to include proposals for a carbon floor price to be imposed alongside the EU emissions trading scheme; a new subsidy mechanism for renewable and low carbon energy, including nuclear power, known as contracts for difference; an emissions performance standard that would ban new coal-fired power stations that do not feature carbon capture and storage (CCS) technology); and a capacity mechanism to incentivise investment in back up power plants and new grid infrastructure.

Companies from across the energy sector and green economy have been waiting to see the details of the bill with a host of firms in the wind energy, biomass, and nuclear sectors reported to be poised to finalise investment decisions based on the level of support available through the new policy framework.

In particular, a number of high profile wind turbine firms, including Vestas and Siemens, are awaiting confirmation on the policy framework governing offshore wind farms before moving forward with plans for new factories on the east coast.

The speech also confirms plans for a new enterprise bill from the Department of Business, Innovation and Skills (BIS) that will contain the legal foundations necessary for the launch of the Green Investment Bank.

The high profile bank is to be backed by £3bn of government funding and will be designed to leverage a further £15bn of private sector funding for a wide range of low carbon projects.

A transitional team has already been set up to manage the launch of the bank and the first fund targeting the waste and recycling sector was assigned last month.

However, the formal launch of the bank cannot take place until the legislative foundations are laid and the government obtains state aid approval from the European Union.

Despite protests from green businesses, the government is intending to stop the new bank borrowing until the coalition’s deficit targets have been met. However, the institution is still expected to prove a major source of new capital for green infrastructure projects when it does launch during the second half of the parliament.

The latest government figures for photovoltaic (PV) deployment have shown demand has fallen significantly since the government halved feed-in tariff incentives on 1 April. Installations with a 4kW capacity or less now receive 21p/kWh, instead of the 43p/kWh that was available previously.

Leonie Greene, a spokeswoman for the Solar Trade Association (STA), told BusinessGreen that the trade body has now issued a call for its members to try to push out positive messages through local media channels in order to highlight that businesses and homeowners can still gain a good return on investment (ROI) from solar installations.

Industry experts have calculated that the falling cost of solar panels over the past year means that well-located installations can still deliver ROI of between five and 10 per cent – a rate of return similar to that available when the feed-in tariff was first launched in 2010.

Installers are concerned that potential customers are confused about what tariff levels they should expect, following months of uncertainty over government plans to cut feed-in tariffs, which included a high-profile and lengthy legal battle.

Julian Patrick, managing director of Freewatt Renewable Energy, toldBusinessGreen he has been calling on the STA and the British Photovoltaic Association to better promote the current feed-in tariff levels.

“I felt they needed to take responsibility for helping the industry,” he said. “They put out a lot of negative messages about the effect of the feed-in tariff being reduced, but so far we haven’t had any positive messages since it has been cut.”

Greene said the organisation has now drafted a letter for installers to send out to local media, with the message that “solar still pays”.

She also revealed the government has this week revised up its weekly deployment figures for recent weeks by about 60 per cent, suggesting the market could be starting to pick up.

DECC has revised up the data for the week ending 22 April since it was first published last week, now showing there were 1,346 < 50kW installations, creating 4.1MW capacity, which is 56 per cent more than previously thought.

A graph produced by DECC (below) shows the pattern of deployment in April could be similar to that seen in early January, when deployment rose rapidly from a slump in the market, prompted by the belief that government could impose an effective cut to the tariff on 12 December 2011.

However, Greene maintained the new figures give cause for concern as deployment is still “scraping along the ground”. She also warned that four weeks of data was insufficient to make firm predictions about future deployment rates.

Additionally, she predicted recovery may be slower than that experienced after previous slumps, due to new requirements for properties to gain a level D Energy Performance Certificate (EPC) to qualify for the feed-in tariff.

“I think things are rather different now because the industry needs to get to grips with the EPC requirements, and we are obviously into double-dip recession, so consumers tend to get pretty frightened,” she said. “But that means we need to talk up the good returns on investment to the public.”

The STA is urging the government to delay plans to cut the feed-in tariff again until deployment for the new financial year 2012/2013 has reached 300MW.

“It would be dreadful to make cuts in the feed-in tariff at the current market rates,” she said. “We need the government to deliver confidence to the market.”

The government is consulting on three alternative proposals to cut tariffs again in July, depending on the amount installed in March and April.

Philip Wolfe of consultancy Feed-In Tariffs Ltd predicted the recent low deployment levels could have a “silver lining” in that they will minimise the chances of the government going through with larger proposed cuts in July.

“Their central expectation was 150-200MW, but it looks as though the market crashed to under 100MW over that period,” he said. “Assuming these figures are right, tariffs for small solar PV systems from July will decrease to only 16.5p/kWh from 21p today. Had government’s “central corridor” been met or exceeded, this tariff could have been cut to 15.7p, or even 13.6p.”

However, Alexander Creed, partner at the energy and resources team of estate agent and property specialist Strutt and Parker, said a growing number of businesses have recently been seeking advice to install 50kW or larger systems, suggesting the dip in deployment is mainly caused by uncertainty in the domestic sector.

He said many businesses recognised they could still receive a 7-8 per cent ROI on a 50kW system, if they were using the latest technology and had access to a good site.

“It still makes a lot of sense for businesses that need to address issues around energy use and sourcing, as well as their green credentials,” he said.