What the code will cost

Overview: The Code for Sustainable Homes is a principal element of the most ambitious sustainable housing policy initiative to date: the aim of achieving zero-carbon status for new housing by 2016.

The code, which rates the sustainability of housing on a scale of one to six, is an integral part of the zero-carbon strategy, which aims to prepare the housing and construction products industries for the challenges posed in delivering low and zero-carbon homes. The scale of the challenge is indicated in figure 1.

Although carbon reductions are central to the code, it also builds on the established EcoHomes standard to include minimum and flexible performance criteria for other aspects of sustainable housing, such as materials selection and waste management. However, the code is more than just the next iteration of EcoHomes. For the first time, it provides a standard that is comprehensive, and addresses issues such as energy and water use, waste management and construction practices.

In the past, it has been possible to achieve high ratings under the EcoHomes scheme without making substantial reductions in a home’s carbon emissions. In some instances it was possible to achieve “very good” or even “excellent” ratings while making little or no carbon reductions beyond the requirements of Part L¹. This will not be possible under the code, where minimum performance standards should be grounds for much greater confidence in the environmental credentials of housing.

Not surprisingly, this will have an impact on development costs. To assess what kind of impact, Cyril Sweett was commissioned by English Partnerships (EP) and the Housing Corporation to determine how the levels in the code might be achieved for different housing types².

As well as understanding the nature and extent of the costs associated with the code, it was important to consider how technologies and financing mechanisms might make the move towards zero-carbon housing more affordable.

EP and the corporation have a particular interest in the code as they are committed to achieving level three this year, level four in 2010 and level six in 2016. These two organisations will take the lead in meeting higher performance standards three years before they become applicable to the industry at large through the Building Regulations.

Cyril Sweett’s research shows that the code will have a substantial impact on development costs, particularly for level four and above. However, the study also indicates that different approaches lead to widely different costs, and that the selection of suitable technologies, together with the use of innovative financing mechanisms, can be crucial in developing a competitive response.

How the code works

The main difference between the code and EcoHomes is that EcoHomes has a number of performance criteria, from which the most cost-effective are usually selected. The code is less flexible. It requires houses to achieve:

• Minimum performance standards for carbon emissions and potable water use
• “Entry level” standards for surface water runoff, material use and waste management
• A minimum number of “code points”. These are awarded for meeting performance thresholds for energy/carbon, water and a range of other environmental considerations, such as daylighting, low-energy lighting, Lifetime Homes standards, sound insulation and security.

As a result, the code is better suited to delivering targeted reductions in carbon dioxide emissions and water use than EcoHomes.

Table 1 shows the minimum energy/ carbon and potable water standards for each level of the code. Carbon emissions are calculated in the same manner as Part L (that is, the improvement in a home’s target emission rate), although water consumption is determined using a “code water calculator”, which is a development on the consumption calculator used in EcoHomes.

Unlike EcoHomes, the code does not include any performance standards relating to proximity to public transport and amenities, which means a developer should have greater control over the score.

The technical manual to support the code has not yet been published (it is due for release in April, together with a revised Green Guide to Housing Specification). Until the technical documents are finalised, any assessment of the impacts of the code must be provisional, although the impact of last minute changes is likely to be minor.

Implementation

Homes can be registered for certification against the code from 10 April 2007³. Schemes can still register under Ecohomes until 5 April 2007 and registrations will be valid for five years, but after that date it will no longer be possible to register schemes with EcoHomes in England unless there are extenuating circumstances⁴.

Therefore, from April, projects in England that require an environmental performance certification will have to use the Code for Sustainable Homes. The developments most immediately affected will be public schemes, such as those on EP sites or where Housing Corporation funding is required. However, from April 2008 the government is minded to make registration with the code compulsory for all homes. Although there will be no mandatory minimum level, the rating of new housing will make a home’s relative performance transparent to purchasers.

There are two steps to getting a code certificate: a design-stage assessment followed by a post-construction review (PCR), where the homes will be checked for compliance with the standards set out at the design stage. At present few PCRs have been completed under the EcoHomes scheme so their widespread adoption under the code is liable to create a temporary shortage of qualified assessors. In the longer term it is hoped that the PCR process can be incorporated within other housing approval processes.

Meeting code requirements

To understand the implications of meeting levels one to five of the code, the baseline cost and performance of six different house types was assessed⁵. A series of technical and design solutions were applied to each house type to enhance its performance in line with code requirements. All the code standards were considered in detail, but particular emphasis was placed on achieving the minimum performance standards for energy and water.

To make the analysis as realistic as possible, all the house types used in the study were based on examples that had recently been built and for which technical and cost information was available. The baseline costs of each house type are shown in table 2. These reflect a typical construction that, in the case of the masonry houses and apartments, was just compliant with Building Regulations. In the case of the Weber Haus and SixtyK House, the base cost reflected the standards required from the Design for Manufacture competition, for which EcoHomes “very good” was a minimum requirement.

Minimum energy standards

A range of carbon saving measures were applied to the baseline house models. To test the effectiveness of different approaches, several combinations of technologies were investigated. For each house type a selection of relatively low-cost energy-efficiency adaptions were considered “initial measures”, these were supplemented by renewable or low-carbon energy technologies and/or more advanced energy-efficiency measures as required.

Four scenarios were considered:

1: Initial energy-efficiency measures followed by use of solar thermal technology and then photovoltaics (PV) and biomass systems.

2: Initial energy-efficiency measures followed by use of small-scale wind turbines and then biomass systems.

3: Development with shared energy services, such as combined heat and power (CHP). For this scenario, costs per unit were averaged for each infrastructure option across a theoretical 200-unit development.

4: The achievement of level 3 without recourse to renewable energies through the use of a whole-house mechanical ventilation system with heat recovery, and by assuming the use of proprietary construction details.

The specific measures applied to the benchmark masonry terraced house are shown in table 3. It is possible to achieve the minimum energy standards for levels one and two through the use of straightforward energy-efficiency measures such as enhanced insulation and heating controls, but higher levels require the use of renewable energy, CHP systems or advanced ventilation and construction detailing.

The estimated costs of achieving level three requirements for energy vary considerably depending on the scenario used (see table 4). While scenario two (using small-scale wind turbines) has the lowest overall costs for the houses, this is perhaps the least widely applicable, as it relies on the presence of at least medium wind speeds – sufficient for 1,100kWh per year from a 1.5kW turbine. The very low compliance costs identified for the two Design for Manufacture homes are a result of the high levels of insulation included in their panelised structure, and in the case of the SixtyK House, the use of an energy services company (Esco) to provide site-wide CHP and renewable energies. Although substantial, the infrastructure provided by the Esco is not factored in to the cost analysis because the cost is not incurred by the developer. Instead,

the Esco makes the initial capital investment in order to secure returns over the longer term.

The presence of a planning requirement to use renewable energy will have a big impact on the strategy for meeting the energy standards in the code. For example, of the four scenarios considered in this study, only two would comply with a 10% renewable energy requirement at level three.

Minimum water standards

The specifications and costs required for code levels one to four, that is, down to 105 litres per person per day, are the same for houses and apartments, and do not require greywater recycling or rainwater harvesting systems. To get consumption below 105 litres, it is necessary to use greywater or rainwater systems to provide about 30% of internal water use (for code levels five and six).

Table 5 summarises the specifications that are believed to achieve the three mandatory water performance thresholds in the code for houses and apartments.

The costs of rain and greywater recycling systems are significant for housing when assessed on the basis of a single dwelling. In apartments, greywater and rainwater systems are significantly less expensive than in housing, which reflects the economies of scale achievable when using single tanks to serve multiple dwellings. It is possible to share water harvesting and recycling systems between houses; cost savings of about 50% can be achieved by this approach. However, the installation of communal water systems for housing requires sufficient shared space for the location of tanks and the ability to set up suitable management arrangements.

Overall costs at each code level

Figures 2-5 show the overall costs of meeting code levels one to five for masonry houses and apartments. It is clear that the overall costs of compliance are driven by the measures taken to achieve the minimum standards for energy. This finding demonstrates why many homes built to the current EcoHomes standard do not make substantial reductions in carbon emissions; if given the flexibility, it is cheaper to make improvements in other areas.

It is interesting that the overall costs of compliance are substantially lower for the two Design for Manufacture homes (the Weber Haus achieves level three for less than £1,000, while the SixtyK House achieves level four for £1,000). The reason for this is the higher base specification of these homes, and in the case of SixtyK House the “outsourcing” of a substantial amount of project costs to an Esco.

EcoHomes very good vs code level three

It is inevitable that the code will be compared to its EcoHomes predecessor. However, the received wisdom that code level three is broadly equivalent to an EcoHomes “very good” is not really true. In most cases a level three home will perform substantially better for carbon emissions than an “excellent” house. It is not surprising therefore that the costs of achieving level three are substantially higher than those for achieving a “very good” rating for the same home. Table 6 shows the additional costs of meeting all aspects of the code at level three in comparison to EcoHomes’ “very good”.

Anyone using renewable energy technologies at the moment will be aware that the market is changing rapidly. The implementation of the code, together with the increasing prevalence of renewable energy requirements for projects, is likely to provide a further boost to the market and it would be expected that the costs of technologies will reduce as production is scaled up and efficiencies are gained from greater experience. The study of experience curves predicts that the costs of a product are likely to fall by between 8% and 18% every time the size of its global market doubles. Given that the current uptake of technologies such as small-scale wind turbines, biomass CHP and micro-CHP is low, it seems likely that rapid reductions in cost could be expected.

Further reasons to expect short to medium-term reductions in cost include:

• The development of more innovative solutions, as the collective intelligence of the industry is focused on this issue
• The reconfiguration of mainstream products to reflect market demands – for example, toilet flush volumes
• Innovative technologies will emerge, for example, micro and mini-CHP, phase change thermal stores and waste water heat recovery
• Expansion of Escos to offer a broader range of low-carbon solutions enabling developers to outsource this element

It is clear that there will be rapid growth in technologies that present efficient and reliable solutions for low-carbon housing, however before there will be a proliferation of solutions some of which will present pitfalls for the unwary.

Key messages

The inclusion of minimum performance standards for energy and water makes the code a more challenging environmental standard than Ecohomes. Reflecting this, the costs are higher and developments will need to make suitable allowances.

The costs and applicability of different solutions vary considerably and it will be important to review the viability of a range of options to determine the solution that is most suitable for a given site, bearing in mind any planning requirement to use renewable energy. Where possible, the involvement of an Esco (to provide site-wide CHP infrastructure) presents a cost-effective means of substantially improving performance.