Smart Homes: Use new and existing policy mechanisms to support smart features

14/06/2009 by David Slade.

Various policy mechanisms already exist that could support smart features, particularly once their benefits are better understood. These will help to raise the profile of smart features and firmly place them in the range of options available for lowering the environmental impact of homes. Some new approaches will also help to support smart features.

The existing policy mechanisms discussed are:

• home information packs
• the code for sustainable homes
• building regulations
• energy efficiency commitment
• energy end-use efficiency and energy services directive

The new mechanisms discussed are:

• a strategy for existing stock
• an intelligent buildings rating

Home Information Packs (HIPs)
HIPs are mandatory when selling homes with three or more bedrooms and a roll out to the rest of the market is expected at some point. HIPs are prepared by sellers for homebuyers and include an energy performance rating, based on the fuel costs of running a home, and an environmental impact rating, based on carbon dioxide emissions. Both ratings will be familiar to people, as they are the same design as the energy efficiency ratings seen on white goods. The assessment process set out the running costs of a home and the intention is to make low impact, energy efficient homes more desirable because of their lower running costs.

Homes will receive ratings from A (most efficient) to G (least efficient) with specific aspects of the homes, such as the walls or roof, rated separately and the running costs broken down into heating, lighting etc. The assessment will include recommended measures to improve energy efficiency and the expected cost savings. Sellers do not have to achieve a certain rating in order to sell their home, but this could change and would be a key way to incentivise environmental improvements.

Alternatively, purchasers could be required to implement a certain number of the assessment’s recommendations within two years of purchase. This would increase the market for a wide variety of energy saving options and, with a solid evidence base in place, smart features will be a useful addition to the range of options available to homeowners.

Smart features and HIPs
Smart meters are likely to assist the rating process, as they will be measuring, recording and displaying a home’s resource use. But if smart features are to become a viable option for homeowners looking to improve their rating, the assessment process will have to recognise them as ways of improving environmental performance.

CLG did consider including smart features in the assessment process but they settled on measures that deliver guaranteed levels of energy saving, whereas definitive values can not yet be assigned to smart features. This is a fast changing area though and the list of features included can change. Further research will strengthen the case for smart features and other features will have to be included once conventional options like wall insulation become more widespread.

The assumptions behind the energy ratings present a more fundamental barrier, as they assume certain conditions in a home in order to compare the energy savings delivered by different options. But smart features deliver savings in a different way. Rather than assuming that a home is heated to 18ºC for 16 hours per day on a weekend (as the assessment does) and then comparing savings, the benefit of smart features is that a whole home would not be heated unnecessarily if only a few rooms are in use, or if people are not even at home. The impact of behaviour change on the savings delivered will also need to be considered.

The assessment process will therefore have to become more flexible so that it can recognise the environmental benefits of smart features. But it is crucial that it does, as the assessments in HIPs are one of the few mechanisms that cover new and existing homes, where smart features have a lot to offer.

Require homes to achieve certain energy and environmental performance ratings before they can be sold and recognise smart features in the assessment process as ways to achieve an improved rating.

Code for sustainable homes
The code came into effect in April 2007 and sets national standards for the sustainability of new homes. It has six levels, with minimum standards of energy and water efficiency that have to be achieved at each level, as well as a range of additional points that can be gained for other sustainability measures. The code covers:

• energy/carbon performance
• water use
• materials
• surface water run off
• waste
• pollution
• health and well being
• management
• ecology

After a positive response to the CLG’s proposal to make a code rating mandatory, they are consulting on further details. Developers can have their homes assessed against the code and inform purchasers of the level achieved.

Alternatively, purchasers will be informed that their home only meets building regulations standard and effectively has a zero rating against the code. This aims to raise awareness of a home’s environmental features among consumers and make sustainability a greater factor in decision-making. To avoid confusion, the rating will be linked with the energy performance assessment of new homes and is likely to be presented in HIPs.

Homes will not be required to meet a certain level of the code. But the government’s 2006/07 consultation, Building a greener future: towards zero carbon development proposes strengthening the building regulations in line with the code so that, over time, new homes automatically reach ever higher levels of the code just by meeting building regulations.

The consultation suggests strengthening the building regulations to achieve a:

• 25 per cent improvement by 2010 = all new homes meet code level 3
• 44 per cent improvement by 2013 = all new homes meet code level 4
• zero carbon by 2016 = all new homes meet code level

Is the code smart?
Smart features are not singled out in the code’s assessment as a way of gaining additional points, but this could change when the savings delivered by smart features become clearer.

The real opportunity for smart features in relation to the code lies in the minimum energy and water efficiency standards at each level. As the building regulations get tougher and higher standards of the code have to be met it will get increasingly challenging to build homes that meet the minimum requirements for each level.

Once house builders have included the easier options for improving energy and water efficiency they will be looking for solutions that enable them to deliver the further improvements that they require. Smart home proponents believe that they will be able to offer the final set of savings that house builders will be looking for.

This view is also reflected in the Technology Strategy Board’s motivation for looking at smart features, as they are aware that the building industry will need support in meeting the challenges presented by these policy proposals. As with the energy and environmental assessments of homes discussed above, the code will have to display flexibility in incorporating smart features into the process and recognising their benefits. But it is vital that it does, as smart features will have an increasingly important role to play the higher the level of the code that builders have to meet.

Building regulations
Merging the building regulations with the code for sustainable homes provides a significant opportunity for the take up of smart features, but these developments will only cover new homes. There are also opportunities for using the regulations to improve the energy performance of existing stock.

Amendments to the Sustainable and Secure Buildings Act allow CLG to require homes that are changing occupancy or doing large scale building work to bring the rest of the home up to the building regulations standard on conserving fuel and power. So far, CLG has not chosen to enact this.

Other suggestions include requiring homeowners building extensions or doing significant refurbishment to bring the rest of their home up to a certain energy efficiency standard (based on the code or the energy performance assessment in HIPs). This would guarantee whole-home improvements in energy efficiency and smart features will be a good solution in homes where that is a challenge.

Apply the energy efficiency aspects of the building regulations to the whole home when extensions are being built or significant refurbishment done.

Energy efficiency commitment (EEC)
EEC requires all energy suppliers with over 50,000 customers to deliver energy savings in their customer’s homes. This contributes to carbon emission reduction targets by improving the energy performance of existing homes. Suppliers are given an energy saving target proportionate to their customer base and are currently working to EEC phase 2 targets.

EEC 1 ran from 2002 – 2005 and suppliers exceeded the required savings
EEC 2 ran from 2005 – 2008 with a target more than double that of EEC 1
EEC 3 is runing from 2008 – 2011 and will change to a carbon emission reduction target

EEC3 will become known as the carbon emission reduction target (CERT) from 2008 and will require a further doubling of EEC2 targets. EEC credits various energy efficiency measures with delivering certain amounts of carbon emission reductions and the measures covered by CERT have already been finalised. Smart heating controls are included, but the clear winners are still options like cavity wall insulation. This has been the method of choice for meeting EEC targets so far and, given the savings it delivers, its low cost and the 10 million homes still without it, it is likely to remain so for some time.

CERT does however provide some opportunity for smart features, as discussed above.

Suppliers will be allowed to meet a limited portion of their commitment through ‘innovation activity’ that explores measures whose carbon savings are still uncertain, and where savings depend on behavioural change. Suppliers will not be penalised if they fail to deliver the expected savings and once carbon savings are established, the measures in question can be added to the general range of measures recognised by EEC/CERT. This mechanism is ideal for exploring smart features, as many of them involve behaviour change and require further research to better understand the savings they will deliver.

The future of CERT up to 2020 also provides a strong driver for smart meters. The government envisages energy companies working with customers to reduce energy use, with a new business model that makes this a profitable activity. But suppliers will only be able to achieve this if they have the frequent and accurate data on how their customers use energy that smart electricity meters will provide. Without them, energy companies will not be able to evolve into the energy service companies envisaged by government.

Introduce provisions to ensure that suppliers take advantage of the innovation activity element of CERT and use it to trial smart features. Energy end-use efficiency and energy services directive. This EU directive was agreed in November 2005 and was implemented in2008. As long as it is financially reasonable, it requires:

• the installation of meters (new or replacement) that accurately reflect energy consumption and provide information on time of use
• billing based on actual consumption that is presented simply and frequently enough for customers to regulate energy consumption

The directive is an ideal opportunity to promote smart electricity meters, as they are the only solution that will allow both increased information on energy use for consumers while enabling suppliers to provide accurate bills. Smart electricity meters are also crucial to the future of smart homes in general. Some pressure is  on the government seize the opportunity presented by this directive and to provide a mandate for a smart electricity meter roll, with a requirement for smart electricity meters in all homes within 10 years. The roll out will not happen immediately, but it is a critical first step that will enable energy companies to start making real progress.

Provide a mandate for smart electricity meters being requiring homes to have one fitted within ten years. Include clear milestones and require the provision of free real time display options to all homes to illustrate consumption.

A strategy for existing stock
Smart features can make a useful contribution to lowering the environmental impact of existing homes, because of the challenges they present to many of the easier, more conventional options. The code for sustainable homes provides a comprehensive approach to environmental impacts for new homes and the same thoroughness would be welcomed when looking at existing homes.

It would be helpful to bring the various policy mechanisms that can incentivise environmental improvements in existing homes into a comprehensive strategy. CLG’s review of the sustainability of existing stock may be a precursor to this, but existing homes will need to be addressed in a more strategic way if they are to make a real contribution to the UK’s carbon reduction targets. And a coherent strategy is required if the goverments ambition of all homes becoming zero carbon over the next decade is to be realised.

Develop a strategy for improving the environmental performance of existing homes so that they can contribute to reducing domestic carbon emissions.

An intelligent buildings rating
TAHI is exploring the idea of an intelligent buildings rating and the Building Research Establishment (BRE) is also working with BERR to develop one. Some countries already have this, such as Japan and South Korea, but they assess the number of smart features in a building, rather than the business and lifestyle improvements that the technologies support. BRE aims to focus more on what smart homes enable. As smart features in homes become more common a smart rating could be included in HIPs. It would make a home’s intelligence an increasingly key feature in decisions, in the same way that existing policies aim to raise awareness of a home’s environmental performance.

With the consideration of including an intelligent buildings rating in HIPS as smart features develop.

Posted in BERR, Building regulations, Sustainable and Secure Buildings Act, Building Research Establishment (BRE), Energy efficiency commitment (EEC), smart meters, Home Information Packs (HIPs), Code for sustainable homes, Smart homes | No Comments »