Overall, the local authority and GFI are aiming to improve the energy efficiency of up to 60,000 homes in the areas each year, reducing energy bills and related emissions. The homes will be supported using a mix of public and private sector finance, unlocked through a string of targeted interventions.
“Local Authorities have a deep understanding of their residents’ needs and increasingly recognize the opportunities to work with the private finance sector to deliver access to finance for their citizens,” the GFI’s program director for the built environment Emma Harvey said.
One measure will be the launch of a green bond from the Greater Manchester Combined Authority, with proceeds raised set to go towards projects that train retrofit professionals and deliver retrofitting schemes in social housing and other energy-inefficient homes. The council will put money towards the bonds but also enable businesses and individuals to invest.
The timeline for bond launch and the level of bond pricing have not yet been confirmed. However, the GFI has stated an intent to replicate the success of the Greater London Authority’s bond issuance, after it first outlined plans to back £500m of bonds with £90m of its own funding back in February.
Other interventions set to be made include the introduction of green mortgages and rental agreements, with the GFI and council collaborating with landlords, lenders and mortgage intermediaries to design and implement the contracts. Green mortgages and rental agreements provide an incentive for the buyer or landlord to renovate buildings, through the offer of a lower interest rate and/or access to a larger loan amount.
For those who may own their property outright, or do not seek a green mortgage or rental agreement for other reasons, the partnership will introduce a new mechanism through which groups of homes interested in retrofitting can be ‘aggregated’. Carrying out retrofitting on multiple properties at the same time can bring down installation costs.
Last but not least, the partnership will test what it claims is the UK’s first property-linked finance scheme, replicating the US’s PACE (property assessed clean energy) model. In this model, the council creates a financing district whereby property owners can sign up for support to pay for energy efficiency projects. The money is then repaid through the property tax bill. Repayment obligations typically pass to the new owner if the property is sold. This has proven successful for commercial buildings in the US.
For the Greater Manchester Combined Authority, the partnership forms part of its vision of reaching net-zero by 2038. The Council’s lead for green city-region and waste, Cllr Martyn Cox, said it was “crucial that, as we become greener, we become fairer, so people are not left behind” – with home energy bill reductions for the most vulnerable being key.
Time for an energy efficiency rethink?
The national media this week has been dominated by news of record profits for some large energy firms as the UK’s wholesale gas price reached six times the level recorded in late July 2021. Green groups, citizen groups and individuals are asking why firms like BP are not doing more to curtail high profits and support billpayers.
The cost of a dual-fuel bill for a UK home is set to rise to at least £2,800 this winter, with some forecasting a price cap lift to up to £3,400. This increase comes on top of a 54% increase already implemented this spring.
It has been recognized that a rapid way to reduce energy bills would be to improve energy efficiency, cutting energy waste in the UK’s leaky building stock. The Climate Change Committee’s (CCC) progress report to Parliament last month named the improvement of home energy efficiency and implementation of low-carbon heat as one of the policy areas where interventions had been largely ineffective.
Rishi Sunak and Liz Truss, the two MPs competing for leadership of the Conservative Party, have both promised to improve energy efficiency policies as a priority if they are elected. But critics have pointed out Sunak’s involvement in the failed Green Homes Grant and the Party’s overall reluctance to develop a replacement. Also raising eyebrows are reports that the Government plans to delay an expansion of the £1bn ECO scheme for home insulation, which a representative told Edie has not been agreed on.
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