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Renewable Energy: Housing

Volume 494: debated on Wednesday 17 June 2009

To ask the Secretary of State for Energy and Climate Change what financial incentives his Department provides to encourage the (a) construction and (b) adaptation of homes to incorporate (i) renewable energy technologies and (ii) sustainable building materials. (278873)

The Government play an important role in providing incentives to increase take-up of small scale renewable on-site energy technologies. These technologies have a key role to play in meeting our 2020 renewable targets, and will be essential in achieving our legally binding 2050 target to cut greenhouse gas emissions by 80 per cent. Presently, the main sources of financial support for these technologies come from the Low Carbon Buildings Programme (LCBP) and the Carbon Emissions Reduction Target (CERT).

The LCBP is an £86 million capital grant programme supporting households, communities and the public sector to install small scale onsite energy technologies. A further £45 million was allocated to the programme in Budget 2009, bringing total funding to £131 million. The programme aims to demonstrate how energy efficiency and onsite energy technologies can be combined in a range of buildings to reduce carbon emissions.

To incentivise the installation of microgeneration under CERT, the scheme provides suppliers with a ring-fenced market transformation option which allows them to achieve up to 12 per cent. of their overall CERT target by promoting measures for which there is not yet a developed market. To further incentivise microgeneration, suppliers may increase this market transformation ring-fence by a further 2 per cent. by promoting microgeneration measures; suppliers receive a 50 per cent. uplift in their carbon score within the ring-fence for this.

The LCBP and CERT have made an important contribution to developing a market for low-carbon small-scale generation in the UK. However, we fully acknowledge that we need to go much further if we are to meet our long-term goals. That is why we included powers in the Energy Act 2008 to introduce feed-in tariffs (FITs) for small-scale low-carbon electricity generation (up to a maximum limit of 5 megawatt capacity) through changes to electricity distribution and supply licences. We are currently working to develop recommendations on the design of the mechanism, including the tariff levels and the period during which they will apply, the detail of which we will consult on this summer. We have committed to have feed-in tariffs in place in April 2010.

Powers in the Energy Act also enable a Renewable Heat Incentive (RHI) to be set up. The powers allow the RHI to provide financial assistance to generators of renewable heat, and producers of renewable biogas and biomethane. The incentive payments will be funded by a levy on suppliers of fossil fuels for heat. Our aim is to make the RHI as accessible, flexible and user-friendly as possible to potential investors in renewable heat at all scales, from domestic to industrial. We are currently working to develop the main features of the RHI scheme, which we will consult on towards the end of this year, and aim to have the RHI in place by April 2011.

In terms of renewable building materials, we provide funding and support for research and dissemination of technology development and information. This Department has part-funded the Renewable House at the Building Research Establishment in Watford which showcases renewable construction technologies on a domestic scale.

The Government also encourage the use of sustainable materials through tightening of Building Regulations. Significantly, we have made a commitment that all new homes must be zero carbon from 2016. To support this ambition the Government launched the Code for Sustainable Homes, which rates a home on a ‘whole house’ basis with a one to six star rating. The code scores new properties against nine categories, which, in addition to use of sustainable materials, include energy, water, waste and ecology.

The code is voluntary for private sector builders, however. If Government are funding the development, or if the development is being built on Government land code level 3 must be attained. Homes built to this standard must have a 25 per cent. improvement in energy efficiency over current Building Regulations, which may require the inclusion of renewable energy generation, and will include the use of materials with a lower environmental impact.