carbon limited

The Draft Statutory Instrument (DSI) for Stamp Duty Exemption for Zero Carbon Homes, announced at the last budget, will undermine the majority of attempts to deliver the greenest of housing. The DSI doesn’t appear to be available online, but the link is to a copy we acquired from the Treasury after badgering them.

The DSI is to be laid before Parliament at the end of next week for Committee approval by the end of the month. It is at best a misguided piece of well-meaning legislation that will do more harm than good, or at worst a genuine attempt by central Government to limit the loss of stamp duty receipts from too many zero carbon homes.

The DSI has been revised following my post last week. My concerns at the time were that the Stamp Duty Exemption would undermine the most cost effective route for large scale developments to achieve true zero carbon status. These fears have not been allayed by the changes to the current Draft Statutory Instrument.

The main changes as far as I can see can be summarised as follows:

• The DSI no longer specifically defines the acceptable sources of renewable energy technologies. Previously the DSI limited renewables to solar, wind or hydro, thereby excluding biomass or biogas. Electricity from a biomass CHP plant can now contribute towards true zero carbon status.

• The supporting documentation clearly states that the development must be connected directly to the renewable generator ‘by a wire used exclusively to convey electricity from that source’. This effectively rules out off-site generating capacity as this would require transmission over the National Grid.

• Finally, the DSI now accepts that a development connected to a biomass heat main, for example, might require a gas back-up to the energy centre for security of supply. True zero carbon status can still be achieved here where it can be demonstrated that on-site electricity generation provides an offset that exceeds any potential gas emissions.

The first point is a step in the right direction and is welcome.

The second point is deeply flawed in that it prevents developers from investing in offsite generating capacity. This was originally allowable under Code for Sustainable Homes Level 6, provided that the electricity could be demonstrated to be renewable and meet the definition of additionality. It is true that the mechanism to audit this has not been developed yet and was a struggle, but by closing this option it removes any impetus to develop the audit methodology.

Given that the case for small-scale on building renewables is rapidly crumbling for anything other than a stand-alone house, closing this external mechanism is tantamount to negligence for UK plc.

It is the final point however where eyebrows shall be raised as its inherent logic is flawed. By allowing gas back-up as long as there is sufficient electricity generation to offset any gas emissions, the stamp duty exemption by default accepts that an on-site generator may need to export to the grid, but still we are not allowed to include accredited imported renewable power. Go figure. We were then told by the Treasury ‘This is the way it’s going to be, it’s SAP’s fault. Don’t darken my door again’

What they mean is that SAP will recognise power generated by on-site renewables and following the revisions to be released shortly will also include the calculation for power consumption for cooking and appliances. My problem is that the Treasury are excluding accredited off-site renewables because they are not reflected in SAP, whilst deeming it irrelevant that an imported renewable energy figure could easily be inputted via Appendix Q as long as the auditing methodology is in place. So we return to the point that by closing this option, the auditing system will never be developed.

Disregarding the benefit of Stamp Duty Exemption, which would have only ever applied to a limited number of new dwellings, the big issue is that the Code for Sustainable Homes definition of true zero carbon will be adjusted to reflect the Treasury’s flawed version.

Now, giving the Treasury the benefit of doubt, they may have to write the legislation in this way so that it is legally watertight and I am not in a position to comment on that. However, if by making the legislation watertight they trash any short term framework to achieve large scale zero carbon developments – or even Gordon Browns beloved Eco-Towns, surely it would be better to scrap it.

The Stamp Duty Exemption was only ever a cheap piece of seemingly high profile policy that to me, appears to have seriously back-fired.

I, like colleagues and many others, have spent years lecturing the construction industry on their need to embrace efficiencies and renewables. We are finally at the point when they, usually seen as the bad guys, have accepted what we are saying and genuinely attempt to meet their obligations (irrespective of their motivations, which I do not believe are purely altruistic, but who cares? It’s the results I am interested in) but central Government through an ill-thought out piece of legislation are just about to scupper the whole thing.

I have written to my MP in an attempt to find out what can be done to demand a review of the impact of Stamp Duty Exemption for Zero Carbon Homes before it is passed by the end of the month. The implications are such that this demands a wider consultation process on the potential negative impacts. If anyone has any ideas about how to deal with this, post a comment or let me know.