We know we need to do something radical to reduce the contribution of our nation’s homes to the UK’s overall carbon emissions: 27% of UK emissions come from the homes that have already been built.  But what practical steps can be taken to reduce emissions? And how can we make this simple so that every home in the UK is at least properly insulated?

Last week the team here at the UK Green Building Council published a new report about the so-called ‘Pay As You Save’ scheme: a financial mechanism to encourage homeowners to refurbish their homes with low carbon measures.   Essentially the idea is that the cost of installing low carbon refurbishment measures in a home is spread out over a long period of time so that savings on a homeowner’s energy bills cover the costs of the work the done – and should leave the householder better off from day one.

But how would this scheme really work? What would it mean for the average householder?

1. I decide to get some work done to my house that requires getting the builders in (such as rewiring, redecorating, new kitchens or bathroom, new flooring etc).
2. I hunt around for an appropriate company to do the work (if the UK-GBC proposals are implemented, there could be a range of companies offering a PAYS scheme – builders, an energy company or even a high street retailer).
3. The company gives me a quote for the work and explains that I can use the PAYS scheme to install some energy efficiency measures like cavity wall insulation and loft insulation or even microgeneration kit whilst I’m getting the other work done (up to the value of £10,000).
4. The company talks me through how much it will cost and how much money I will save on average on my energy bills once the refurbishment measures have been installed. They will also be able to tell me if I’m entitled to any financial incentives (e.g. money off my council tax) or grants to fund the work.
5. When I’ve agreed the quote and decided to go ahead with the package of works, I also agree a schedule for payments under the PAYS scheme.
6. I sign a contract for the PAYS scheme that is linked with the house (not me as an individual) so the PAYS charge is attached to my house.
7. Once the energy efficiency measures have been installed, my local authority bills me for a series of repayments over time under the scheme.  I make the payments to the council from the money I’ve saved on my energy bills (I could be saving between £50 and £200 a year on my bills).
8. If I decide to move house, the PAYS charge is associated with the house and the contract is passed on to the new homeowner to continue the payments from the money they will save on their energy bills once they move in.

The UK-GBC report ‘Pay As You Save: financing low energy refurbishment in housing’ is the first time that this level of detail on how such a scheme would work in the UK has been published.  The executive summary and the full report give further details and discuss other aspects of the scheme such as incentives for householders to get low energy refurbishment measures installed.   Ashley Seager from the Guardian also talks through aspects of the scheme and how it would work in this audio clip on the Guardian website.

Government committed to running a pilot of the Pay As You Scheme as part of their recently announced ‘Low Carbon Transition Plan’ so the PAYS scheme could become a real option for homeowners soon.  That’s why it is more important than ever for you to support the Great British Refurb campaign and do your bit to lobby government on the key campaign asks, including the introduction of innovative new financial models such as PAYS.

Ellie Austin

Project Officer
UK Green Building Council