The Burwarton bungalows are all small at 53m plan area, semi-detached, built in 1995 with insulated cavity walls, double glazing, reasonable levels of loft insulation, electric panel heaters and dual electricity meters. They all rate as E47 to 49 on their Energy Performance Certificates.
The Wintles properties are more varied. They are all detached houses, but vary in size from 113m to 243m , with some two-storey and some three-storey.
They were all built between 2003 and 2013 of timber framed construction with double or triple glazing and LPG boilers run from a shared tank. The properties were marketed as eco-homes, but the Energy Performance ratings are in the mid-range, varying between E54 to C69, with most of them in Band D (55 to 68). A standard modern property would be Band B, a new eco-house would be Band A. The main reasons for these lower ratings are the high ratio of external envelope to floor area and the LPG heating. There is also a great variation in the energy used per metre squared at the Wintles, from 18 to 112 kWh/m.
When the feasibility study was initiated, shared-loop ground source schemes benefitted from the Non-Domestic Renewable Heat Incentive (NDRHI). This scheme paid out a per-kWh subsidy over 20 years at a rate that was reasonably attractive to people looking for longer-term investment and thus was considered suitable for a community energy scheme, especially if a lower cost per property could be gained through the use of a shared loop system. However, the quotes received showed only a 5% discount for shared loops and this, along with the small heat demand figure ruled out a community energy shared-loop scheme for Burwarton, though SRH could potentially still take this project forward with its own funding, depending on the level of support for such schemes available from any replacement for the NDRHI.
By contrast, we believe that a shared loop scheme could have been viable for the Wintles with the support of the NDRHI, though it may have required some payment from the homeowners, either as an upfront contribution or by an ongoing service charge.
Unfortunately, although the Domestic version of the Renewable Heat Incentive was extended to the end of March 2022, the Non-Domestic version was closed at the end of March 2021. It is not yet clear what will replace the NDRHI for schemes over 45kW but the Clean Heat Scheme support for installations up to 45kW is proposed as a single up-front payment of £4,000 per property regardless of the technology used. This is not sufficient to support a viable community energy scheme of this nature.
Useful Learnings from Ludlow21
The term 'shared' does not seem to lead to cost reduction in this case. Quotes from leading industry suppliers (as would be obtained by anyone seeking an estimate for this type of work) do not scale for very small groups of properties as envisaged here. Scaling of cost only seems to be applicable to large developments with a shared loop system such as a dense block of 20-30 flats.
There is (somewhere) an economic sweet spot for this kind of system. The rural bungalows studied were too small to achieve benefit and the larger, supposed 'green' houses had far too large an external wall area/plan area ratio to be sufficiently heat-efficient.
The capital costs for a shared-loop installation (single bore-hole type) are too large to be sustained by the owners of these properties - the cost of drilling the bore hole to a depth to be effective is far larger than the aggregated upfront funding from the Rural Community Energy Fund (RCEF). Most owners will not regard these costs as a good investment; for a property owned by say, a housing association, they are concerned with improving the property's EPC rating as required by legislation so that they can continue to rent the property. This is not the same as emissions reduction in their eyes.
Simple economic modelling may not be the right approach to benefit estimation. A benefit for emissions reduction has to be monetised and allowed to form part of the cost-case for these types of projects to succeed.
The present and successive approaches to a 'one-size fits all' emissions reduction grant fail to take account of the very real differences between rural and urban housing energy systems. In the case of rural Shropshire, most rural tenants have little interest in emissions reduction, they are interested in fuel bill reduction and do link the two. Rural landlords have real issues with the age and energy efficiency of their housing stock and the funds available to them to remedy this. Often, they make a decision to 'give up' on some old stock and build new.