Cost benefit - financial savings, not comfort

[eandg]

I'm trying to compare the cost of a system with a u-value of 0.10 which is approximately 5.5k more expensive than one which has a u-value of 0.15. Are there any ready reckoners about to calculate payback of the additional capital cost? 

[Big Neil]

+1 for this. For both the foundation and superstructure end of things.

[Ferdinand]

That also depends on your house form and plan. 

 

So I think you need to put that into the JSH spreadsheet, and compare the models.

 

 http://www.mayfly.eu/ link at top.

 

Ferdinand

Edited July 1, 2019 by Ferdinand

[ToughButterCup]

You could also use PHPP - but @JSHarris 's s/s is simpler.

[LA3222]

My opinion on these sorts of questions/analysis is that the payback peiod can't be accurately predicted.

 

Insulation costs 'in the now' are fixed.  Energy prices are fluid, I would argue that predicting them long term and therefore allowing you to calculate a pay back period is not possible.

 

I believe a better way to look at it is how you perceive comfort levels and how you want to live in your home.

 

I suspect that saving a few quid now is probably a false economy in the long run. 

[ProDave]

Well here is a "ball park" example.

 

My house has a U value of about 0.14 for just about all walls floor and roof.

 

Total heating cost for last winter was £234, ASHP and under floor heating.  This is in the Highlands, a less harsh climate the cost would be less.

 

If the extra insulation halved that heating bill, so say £118 saving per year, then at a £5.5K cost, then it would take 46 years for the energy saving to payback the extra cost.

 

Even if it reduced the heating bill to £0 it would take 23 years to pay back the extra cost.

 

This is the law of diminishing returns.

[Ferdinand]

My take on this would be to put the insulation in, even at the cost of a compromise somewhere else, because 

 

1 - Even though the calcs may say 20-30 year payback, at some stage house values WILL reflect the insulating quality of the fabric.

2 - This may happen sooner than expected, because we are within about a year or two of owner occupied becoming quite obviously the slum sector for energy efficiency as shown in government data due to regulation of Landlords by EPC.

3 - Domestic energy prices are too low, and probably need to double or treble. That will have an impact on your calculations.

4 - It is the right thing to do.

 

Obviously look for a cost effective  way of doing it.

 

Personally I would like to see the fuel duty escalator as applied to petrol and diesel put onto domestic fuel. The escalator is one reason why approx 40 million uk road vehicles in 2018 emitted fewer Greenhouse gases in total than did a little over 20 million in 1990.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790626/2018-provisional-emissions-statistics-report.pdf

 

Transport is well on the way to fundamental and mass change; resi is not.

 

With significant carbon reduction targets in place, someone will be coming knocking on all our owner occupied doors before long. That will transform your calculations.

 

So I say put it in as far as you humanly can.

 

F

 

Edited July 1, 2019 by Ferdinand
iPad made the damn thing read like Allo Allo

[eandg]

Thanks all. 

 

Ferdinand, it's happening (to some extent) in Scotland already with minimum EPC ratings coming into force across all tenures, with owner-occupied homes to meet EPC C by 2030, where cost-effective and technically feasible. The devil will be in the detail but it may well force a sea change in attitude to energy efficiency and its economic value in homes. 

[Ferdinand]

9 minutes ago, eandg said:

Thanks all. 

 

Ferdinand, it's happening (to some extent) in Scotland already with minimum EPC ratings coming into force across all tenures, with owner-occupied homes to meet EPC C by 2030, where cost-effective and technically feasible. The devil will be in the detail but it may well force a sea change in attitude to energy efficiency and its economic value in homes. 

 

That is good to see. The last I heard it was 2040 and they were still consulting.

https://www.gov.scot/publications/energy-efficient-scotland-consultation/pages/4/

 

F

[ProDave]

13 minutes ago, eandg said:

Thanks all. 

 

Ferdinand, it's happening (to some extent) in Scotland already with minimum EPC ratings coming into force across all tenures, with owner-occupied homes to meet EPC C by 2030, where cost-effective and technically feasible. The devil will be in the detail but it may well force a sea change in attitude to energy efficiency and its economic value in homes. 

I am glad our old house, currently rented, already gets an EPC C

 

How will they force owners to upgrade? or will this just be a requirement for selling a property, so if you have no intention of selling you don't have to bother?

[epsilonGreedy]

49 minutes ago, Ferdinand said:

3 - Domestic energy prices are too low, and probably need to double or treble. That will have an impact on your calculations.

 

 

Are the major energy suppliers loosing money hand over fist?

 

Trebling energy prices would push millions of householders into a debt spiral and ultimate bankruptcy. 

Edited July 1, 2019 by epsilonGreedy

[PeterW]

4 minutes ago, epsilonGreedy said:

Trebling energy prices would push millions of householders into a debt spiral and ultimate bankruptcy. 

Edited 1 minute ago by epsilonGreedy

 

They already have. Energy poverty is a big thing and will get worse. Prices have doubled over the past 10-15 years anyway, and the way this is happening is the increase in standing charges. 

 

I saw a new build yesterday that had “glass panel radiators” and has an EPC of D (just..!) which shows developers are still happy to push for the lowest build cost and not care about ongoing costs. 

[Ferdinand]

5 minutes ago, epsilonGreedy said:

 

Are the major energy suppliers loosing money hand over fist?

 

Trebling energy prices would push millions of householders into a debt spiral and ultimate bankruptcy. 

 

I think 1 is the wrong question. In this I would support a Pigouvian tax (designed to change behaviour - not my normal view), though I would argue for a single carbon tax applied to everything.

 

The fuel duty escalator did not kill us. I think increases depend how it is done ... pushing prices over a generation would be doable. 

 

F

[epsilonGreedy]

11 hours ago, eandg said:

I'm trying to compare the cost of a system with a u-value of 0.10 which is approximately 5.5k more expensive than one which has a u-value of 0.15. Are there any ready reckoners about to calculate payback of the additional capital cost?

 

 

This is the 3rd thread in recent months on the subject of marginal fuel gains relative to U value improvements. On the face of it the annual saving is typically small, however if you asked a pension annuity provider how much cash would be required to fund an annuity to pay that fuel bill increase, inflation indexed for the rest of your life then the upfront insulation costs would look like a better deal.

[Ed Davies]

What @epsilonGreedy says. Insulation and (to a lesser extent) on-site renewables are amongst the few index-linked pensions available to most of us.

[epsilonGreedy]

3 minutes ago, Ferdinand said:

The fuel duty escalator did not kill us.

 

I thought is was cancelled after a campaign of civil disobedience and HGV blockades at refineries.

 

Anyhow a private car is an elective luxury whereas heating a home is not. A better taxation incentive would be a stamp duty penalty on poorly rated homes and criminal convictions for fraudulent assessors.

[Ferdinand]

24 minutes ago, ProDave said:

I am glad our old house, currently rented, already gets an EPC C

 

How will they force owners to upgrade? or will this just be a requirement for selling a property, so if you have no intention of selling you don't have to bother?

 

Not sure. For landlords renting out too poor properties in England you can get a Civil Penalty of up to 4k. Plus there may be routes through H&S regs, which apply to occupants as well as the fabric.

 

They tend to be handled differently in different areas of the law and I am not reading the 110 page document to find out, but normally a Civil Penalty is the Council as Policeman, Lawyer, Judge, Jury and Executioner. And they get to keep the cash.

 

Potentially this could be forced into Landlord Selective Licences in England, which are already full of God-knows-what (Nottingham tried to force LLs to supply an EPC for rooms in a HMO, which do not even exist in EPC definitions!), and Banning Orders etc. No idea if it would go that far - though it has already in the Tenant Fees Bill dog's breakfast, so who knows...

 

I would do it like the Ecology, with the carrot/stick of higher SDLT, and perhaps a rebate on energy bills.

 

F

[Ferdinand]

25 minutes ago, epsilonGreedy said:

 

I thought is was cancelled after a campaign of civil disobedience and HGV blockades at refineries.

 

Anyhow a private car is an elective luxury whereas heating a home is not. A better taxation incentive would be a stamp duty penalty on poorly rated homes and criminal convictions for fraudulent assessors.

 

I would add in schemes to encourage renovation, though I am not clear how to avoid the problems associated with centralised schemes - which can double costs through overheads.

 

Though the current third party insulation schemes seem efficient. 

 

The escalator came back in after a few years.

 

IIRC it started at +3% over inflation, then +5%, then TB made it +6%, then they protested when it was maintained when oil prices started shooting up. I think that could be called cackhanded politics rather than a fundamental failure.

 

However it worked. Also remember the CO2 banded road tax that had to be replaced with the current scheme because more than half of cars were in the <£30 bands within about 10 years?

 

(https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/716075/vehicle-licensing-statistics-2017-revised.pdf)

 

Give it enough time, and the impact will be significant.

 

For energy I might suggest 1-2% per year, with strategic improvement schemes funded thereby. It would be critical that golden-goose-killing pillocks be kept in their matchboxes. And that it be done gradually over perhaps 15-25 years. Given that the LL schemes are now happening after 7-8 years warning, we have a way of judging.

 

Ferdinand

Edited July 1, 2019 by Ferdinand

[daiking]

My parents live on a large 1960s council estate in South Wales. The incumbent Housing Association (Valleys to Coast?) is currently going through a programme of fitting EWI to their stock. My parents bought their house in the late 80s so will not be covered by these works. This is leaving some strange sights as terraces of flat roof council houses have hit and miss EWI along them. I cannot vouch 100% for this tale but when OOs (owner occupiers) enquired about having the work done, they were quoted a figure around £20k - even if not that much, they are being asked for a lot of money to do a bit of extra work when everything required is conveniently placed in that current location. There is a fair share of owner occupiers but they are not rich people and the houses are barely worth £100k. This work will just not be done whilst providers are ripping off HAs and/or OOs. These people and OOs all over the country cannot afford this work. Their only option will be to heat less and less of their houses, like their parents and grandparents before them.

 

If the intention is to make everyone EWI over the next 10 years then I really need to change careers so that I can retire at 50.

Edited July 1, 2019 by daiking