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written by Lenny , January 26, 2010

Thanks for your comment Simon, and sorry if it's taken me ages to get around to replying, been a busy month. I like the idea of guaranteeing energy savings too - the question is how to do it. Can a financial saving be guaranteed considering energy prices are so volatile? Most likely not. And can you even guarantee a kWh figure? You can say that upgrading a house to a cerain standard is likely to reduce its energy demand by a certain amount - but how would you factor in occupant behaviour? What if the occupants started to heat rooms they hadn't before? You could only really guarantee energy savings so long as consumer behaviour remained the same. It's tricky one that does need to be teased out.

You said that: "And as if that wasn't bad enough, the way most upgrades are currently being done, the net result will be the demolition of large numbers of customer's houses in about 10 years time due to the dry rot issues arising as a result of interstitial condensation produced by increased linear cold bridging (just ask the City of Vancouver). Currently there are about 5 people in Ireland qualified to assess this issue correctly and none of them are part of the PAYS scheme."

In fairness, we have consulted heavily with the architect Joseph Little about PAYS. As you may know, Joseph has written a series of articles for us on the dangers of condensation and mould when upgrading buildings. As far as I understand, he's one of the few people in Ireland licensed to use WUFI for condensation anaylsis and his opinion on the issue of upgrading, condensation and mould would be appear to be highly regarded.

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written by Simon McGuinness, MRIAI , December 29, 2009

Lennie,

There is a big problem with PAYS - there is no one looking after the energy consumer's interests.

The ESB (or who ever) is interested in selling electricity, the more they sell the better they feel. The only reason they are jumping on the PAYS bandwagon is because they think it is a great way to engender "customer loyalty" in a deregulated energy market.

The building upgraders are only interested in selling their kit. The more of it they sell the better they feel. Whether it works or not is of little relevance. (One insider has told me that the ESB has done deals with 6 of the bigger ones. Apparantly, the details of the commercial arrangements involved are not going to be made public. A Bishop wouldn't get away with that one.)

And the third agent is the government. It is primarily interested in being seen to be doing something green. Whether it actually delivers either energy savings or CO2 emission savings is immaterial. By the time the pitfalls have been discovered with PAYS, they will be long gone.

So there you have it, the unholy trinity.

And, it could all have been so much more safe and effective for the consumer if a simple device had been slipped into the equation: someone being made legally responsible for achieving the energy savings promised to the customer.

Without that, the customer is a veritable lamb to the slaughter - it is no wonder PAYS is a hard sell on the doorstep. The customer's suspicions are entirely correct - he is being sold a pig in a poke. It will cost him a fortune, he has no idea what the payback period is likely to be, what his energy bill are likely to drop to or whether it will have unintended adverse consequences on his property investment.

And as if that wasn't bad enough, the way most upgrades are currently being done, the net result will be the demolition of large numbers of customer's houses in about 10 years time due to the dry rot issues arising as a result of interstitial condensation produced by increased linear cold bridging (just ask the City of Vancouver). Currently there are about 5 people in Ireland qualified to assess this issue correctly and none of them are part of the PAYS scheme. And neither the Minister nor the ESB nor SEI see any need for them to be involved.

That should make for a nice little class-action earner for lawyers when they have finished with NAMA and the various tribunals. And guess who will pick up the tab?

Yes, the taxpayer.

Pity, it had the potential to achieve so much for the country, for energy consumers and for the planet until the politically naive allowed their philistines coalitionists to gut the plan and feed it to the rabid free marketeers to implement.

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written by Simon McGuinness, MRIAI. , December 29, 2009

Lennie,

There is a big problem with PAYS - there is no one looking after the energy consumer's interests.

The ESB (or who ever) is interested in selling electricity, the more they sell the better they feel. The only reason they are jumping on the PAYS bandwagon is because they think it is a great way to engender "customer loyalty" in a deregulated market.

The building upgraders are only interested in selling their kit. And the more of it they sell, the better they feel. Whether it works or not is of little relevance. (One insider has told me that the ESB has done sweetheart deals with 6 of the bigger ones and the details of the commercial arrangements involved are not going to be made public. Why not?)

And the third agent is the government. It is primarily interested in being seen to be doing something green. Whether it actually delivers either energy savings or CO2 emission savings is immaterial. By the time the pitfalls with PAYS have been discovered, they will be long gone.

So there you have it, the unholy trinity.

And, it could all have been so much more effective if a simple device had been slipped into the equation: someone being made legally responsible for achieving the energy savings promised to the customer. Its no big deal, it just takes a few sums - well quite a few sums and a bit of long division, actually.

Without that, the customer is a veritable lamb to the slaughter - it is no wonder PAYS is a hard sell on the doorstep. The customer's suspicions are entirely correct - he is being sold a pig in a poke. It will cost him a fortune, he has no idea what the payback period is likely to be, what his energy bill are likely to drop to or whether it will have unintended adverse consequences for his property.

And as if that wasn't bad enough, the way most upgrades are currently being done, the net result will be the demolition of large numbers of customer's houses in about 10 years time due to the dry rot issues arising as a result of interstitial condensation produced by increased linear cold bridging. (Just ask the city authorities in Vancouver, Canada). Currently there are about 5 people in Ireland qualified to assess this issue correctly and none of them are part of the PAYS scheme. And neither the Minister nor the ESB nor SEI see any need for them to be involved.

That should make for a nice little class-action earner for lawyers when they have finished with NAMA and the various tribunals. And guess who will pick up the tab?

Yes, the taxpayer.

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written by heinbloed , December 11, 2009

When we hear the argument that this PAYS project is already done in some countries we should know that these countries are either not in Europe ( where EU legislations do not have to be adhered to!)or are nations of illiterates. Usually they're both, an energetic or global warming potential (GWP) balance sheet is the last thing asked for in the countries like for example Canada or the UK.
The UK is now starting to implement a 'trial-and-error' test assuming that 500 stupid cows will take the road to the butcher.
See http://www.aecb.net/forum/index.php?topic=2212.0 :

" Pay as you Save partnerships announced
on: December 07, 2009, 01:27:19 PM
DECC (the Department of Energy and Climate Change) has announced the five partnerships that will be delivering their 4 million Pay as you Save (PAYS) pilot programme. PAYS is designed to explore ways to bankroll 500 households to carry out energy saving improvements to their homes, then to pay back the cost from the savings in their energy bills.

The five partnerships are led by Gentoo Group, British Gas, Birmingham City Council, B&Q and Stroud District Council.

According to DECC: "The Home Energy Pay As You Save pilots will give households the opportunity to invest in energy efficiency and microgeneration technologies in their homes with no upfront cost. Householders will make repayments spread over a long enough period so that repayments are lower than their predicted energy bill savings, meaning financial and carbon savings are made from day one."

The Energy Saving Trust will be responsible for assessing how the scheme works out practically, financially, and in terms of carbon saved.

More information from www.decc.gov.uk/en/content/cms...pn140.aspx and from project partners. "

Meaning not even those who invented the copy of the Canadian EXPERIMENT are believing in it's success.Not willing to take the risk they're looking for some fools in the public.
Why do have the propagators of this Irish copy-of-a-copy not installed the so called energy saving meassures on their own costs and are willing to share their experience here in the CI magazine. Why does it it need the intellectual low fliers to be the guinea pigs?

May we ask the editor/journalists of CI what their personal experience with energy saving meassures is ?
For an energetic, for a monetarian and a GWP balance sheet of their efficiency meassures?
No first hand experience there? Or is this better hidden away from public scrutinity ?

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written by heinbloed , December 11, 2009

So, dobelmpk, would you like to see the energy balance sheet as well?
Are you willing to support scientific work with a small donation (10 Euros or so)so that we aren't served lies again?

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written by dobelmpk , December 10, 2009

More's the pity that in the good times, householders did not make the investments in energy reduction. which are now becoming apparent. People are/were willing to spend money on their houses, particularly where it is obvious or makes the house more attractive

THe concept of repayments linked to the cost of energy saved seems a win win concept.

But we are where we are consumers unwilling or unable to make credit committments, ideal workers and some people still with capital.
Whether this is the traditonal energy company or other companies set up for the purpose of capitalising the work is is just a detail

There are alternatives:
The concept of big business providing the consumer with expensive product to be paid off over time is well established. THe mobile phones, the motor industry and Sky boxes are cases in point. There is no reason why energy related products could not also be packaged in a similar fashion.


But there are also community based inititives which could be adopted - THe Credit Union system is an honest broker in the heart of the community and would presumably be able to set up flexible repayment schedules, linked to energy savings. The sizes of the loans would be typical of the normal CU loan.

Likewise there are a variety of methods by which the value of the loan can be protected. Creditors are / were allowed to have an "interest" registered against any major loan so that for instance a mortgage cannot be fully redeemed while a creditor still indicates their interest. The practice then would be that on a sale and clearing the mortgage, the solicitor would ensure that the creditor was paid.
Presumably this type of loan woud only be used for intermediate cost energy savings e.g installation of new plumbing,external insulation Solar panels, Heat pump. more efficient boiler e.g. costs in the range of 5-10% of the cost of a house. Smaller tasks such as attic insulation, lagging jackets and draftstrips would not justify the set up costs.

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written by heinbloed , December 10, 2009

Hi, Lenny,

In your answer you used several times the term "could" concerning legal questions, monetarian business and energy balances.

This term I take for granted means no-one has a clue about the consequences of the PAYS scheme.

I'm not a fortune teller and I haven't seen an university from the inside myself, so I'm not in the intellectual position to jump onto that train made of waggons called "could, might, would, should...."

Since no-one involved in this PAYS idea seems to have asked for the energetic balance sheet of this idea, the energetic consequences of putting money and effort into it
I'm willing to spend ?280.- for the sake of society.For our all knowledge.
I had the fortune to 'earn' a few bobs with my unsubsidised private energy supply, a windfall from the sun so to speak
I'm willing to spend ?280.- for the sake of society.

My suggestion is to find an energy expert who is willing and able to figure out how much energy will be saved with the PAYS idea. Not a big but a complete calculation we have to demand...

So here is my offer: ?280.- from my pocket for a reliable energetic balance report.

So all CI has to do is to call an independant physican and offer the job to her/him.

The numeric balance to be done by a competent person is simple: "Total energy input into the PAYS idea/proposed scheme versus total saved energy".


Will CI pick up the ball?

Or would that be a stupid idea?!

Sincerly

heinbloed

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written by lenny , December 09, 2009

Hi heinbloed,

I fully understand the legal, social and economic issues you have raised - we have been working on PAYS for months here.

You actually raise some valid potential sticking points for PAYS, but while you see them as dead ends, we see them as obstacles to work on and try to get past in order to deliver a scheme we believe can deliver lower energy bills, lower carbon emissions and more comfortable homes.

These are our only motivations in working on PAYS - Construct Ireland has not been paid a cent for the many hours of research and campaigning we have done on PAYS.

We are fully aware that under EU rules consumers must be free to change their energy supplier and that long-term fixed energy contracts are illegal. We are not proposing tying customers to an energy supplier - there are a number of ways around the issue. The repayment tariff could move to the new energy supplier when the consumer switches. The consumer could continue paying the tariff to the original utility while procuring his/her energy from a new supplier.

Or the two bills - the PAYS tariff and the energy bill - could be totally separate. A new independent organisation could even administer the energy upgrade work and billing of PAYS - totally separate to the utilities.

We have no secrets and nothing to hide. You advised that we invest "10 minutes into some phone calls, ask the relevant bodies about their opinion". A large proportion of Construct Ireland's time over the last few months has been taken up doing a huge amount of research - talking to experts in other countries who have worked on PAYS-type schemes, talking to utilities, energy experts, civil servants, legislators, semi-state bodies, the building industry. Reading research and relevant reports.

If there is anyone we haven't spoken to it is only because our limited time and resources means we can only talk to so many people - we have no ulterior motives and are not trying to avoid speaking to anybody. We are happy to have input from anyone - all the bodies you mentioned - and as the plans progress I'm sure all of these bodies will have input.

We are not at all proposing to offer loans to those who are unable to pay.

Consumers will save money under our proposal, not spend more - the PAYS repayment would be less than the difference between the old energy bill and the new one. Energy bills (energy PAYS tariff) will ultimately be less than for those who don't upgrade, particularly as energy prices rise.

Yes, there is a long-term commitment to re-paying for the work. We're not denying that. But consumers won't be spending more than they would if they hadn't upgraded and carried on as normal. And we're not proposing to rip insulation out of the walls of non-payers - every utility has a small number of non-payers, but it's worth noting that this is much rarer for energy services than for other debts because consumers prioritise payments for energy. Based on our research on similar schemes in the US, defaulting is extremely rare.


A market research firm did some research for us - it found that 80% of consumers would be interested in the PAYS approach to paying for energy upgrades: http://constructireland.ie/New...bills.html

With regards to what happens to the bill when a person wants to move, this is absolutely a valid question and the details still need to be worked out. Perhaps legislation would be needed, or another way found to deal with the issue. We've never said that there are no challenges - but as I pointed out, we believe in working them out in order to deliver lower carbon emissions, lower energy bills and more comfortable homes.

You seem to think PAYS is impossible - but it's in the current programme for government, Bord Gais are planning to start a similar scheme next year (see current issue of CI), both of the main parties in the UK have adopted the approach and there are various examples of PAYS type schemes in the US. It's common for private energy service companies to offer similar services for large commercial industrial buildings.

Unfortunately as the deadline for next issue of Construct Ireland is rapidly approaching it's unlikely I'll have time to keep up with the discussion over the next couple of weeks, so this will probably be my final post on the matter due to time constraints.

Thanks,

Lenny

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written by heinbloed , December 08, 2009

We should read the post of Roberto (4/12/2009) carefully, Lenny:
"... have a door to door campaign for the home energy measurement..."

He warns us against the vanmen.

"...we are to lazy even to read the ads ..."

He recognises the need to protect the incompetent consumer.


" Have tv shows on local tv stations and radios promoted such measurement? What action has been taken and from who? "

And points into a certain direction.

Do I have to comment that further ?

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written by heinbloed , December 08, 2009

Sorry, Lenny, you do not seem to understand the legal impact nor the economical nor the social impact:

It is illegal to tie an energy consumer with long-term contracts.
There is nothing the state can do about this, it is EU legislation.

Ask your parents why the ESB shops where closed down. These ESB shops did exactly what PAYS is trying: selling people goods and subtracting monthly rates from their electricity bills.

An illegal practice.

It didn't matter if the products purchased did save energy, be it CFL bulbs versus tungsten bulbs or electric kettles versus pots on the electric cooker or on the gas hob....

Now I'm asking you again (the previous propagators of this PAYS idea are always shy on this question):

WHY have the consumer associations not been asked?
WHY is the competition authority not being asked?
WHY is the energy regulator not asked?

The editor of CI admitted there are legal questions to be solved. Has he talked to you about these? He doesn't want to discuss them here.... I suppose there is a reason.

It is illegal to offer loans to persons who are obviously not able to pay them back, who have no creditworthyness.
Someone doing so is a loan shark, the state attorney as well as the financial authorities will be interested in him.

A loan stays always with the signer. Not with the property where it was signed or where the product was delivered to.
Anything else is illegal.
Unless it is a mortgage(with some special fees and involvment of solicitors) but even here the bill has to be paid by the person who signed it first hand.

If someone doesn't pay his utility bill but sells the property the new owner is NEVER liable for this old bills. Unless a legal title had been put onto the property (with plenty of costs and legal advisors involved)

Why haven't you answered these question which I have already raised now several times?

Another question is how a debt ridden household can-after signing with utility company A a loan- switch to utility company B ?

Have you spoken to our energy regulator about the issue? Why not?

Phone your utility provider and ask him what would happen if you don't pay the bill, if these debts would be passed on to the new owner of the building.
A simple thing like realism, like journalistic carefulness - is that asked too much for?
Invest ?0.25 and 10 minutes into some phone calls, ask the relevant bodies about their opinion. This would have saved you plenty of driving and typing. Plenty of energy!

Do you really want to tie the helpless consumer to the most expensive utility companies?
Their capital costs money, you know.
The more there stands out the higher the price of their product. Unless we're betting on another black friday this PAYS idea is economical suicide.



If Mary signs a contract with the ESB and John wants to move in and Mary moves out-is he not allowed to switch to cheaper Airtricity? Does he has to fork out for Mary's shopping spree?
What do you critical senses answer to this?

Spin this further:
Mary has no money, doesn't pay the ESB.
Would John have to let the ESB crew into his house to dismantel the insulation, the PV panel and the heat pump?

I'm beginning to understand now why the Irish papers run these double-sided pages when the budget is published.
If a financial or legal situation is not boiled down to the John-and-Mary sample the general public doesn't understand a word of it....

Have you asked the installers why they aren't doing this financial construct themself, on their own? They're allowed to!Fully legal, no need to bend the law, to involve CI. Just do it.
A sure bet would it be, wouldn't it?

They wouldn't touch such a contract with a plier!
For a very good reason.

To whom's tunes is this PAYS song written?

Is the conductor paid?

With serious worries
heinbloed

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written by lenny , December 08, 2009

Firstly, you're presuming to know what's best for people and deciding on their behalf rather than letting them choose for themselves. Nobody is suggesting we force people into upgrading their homes - we merely propose giving them the option to upgrade and pay for it over time.

Secondly, the idea is that once people have upgraded their homes their will be a reduction in their energy bills - the repayment for the measures will be equal to or less than the difference between the old and new bills, so outgoings will be LESS than before, or perhaps the same. As energy prices rise, they will better off financially than those who haven't upgraded. Once the tariff is fully paid, their bills will then be significantly lower than neighbours who didn't upgrade.

Then there is also the fact that many energy upgrade measures will pay back for themselves in a number of years, particularly as energy prices rise, thus making energy efficiency one of the smartest investments around.

This is not a loan tied to an individual person - it is a repayment tariff tied to a property. A person is free to leave the property at any time and the repayment tariff will remain for the new occupants. If they don't want a property with a small repayment tariff lower energy bills (all together less than a typical heating bill), they don't have to buy/rent it.

Householders would still be free to switch energy suppliers and continue paying the tariff.

Of course the state should not be forcing low income and social households into upgrading, it should pay for this itself - something it has already started to do through various ESB and SEI schemes.

If you're not a fan of PAYS, how do you think we should go about upgrading our national building stock?

Thanks,

Lenny

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written by heinbloed , December 08, 2009

Hi Lenny:
My critical view on the propopsed PAYS program was already expressed and explained,no one put up the discussion. But again:
" Could you elaborate further? All PAYS aims to do is to give consumers the option of having energy upgrade work done and, rather than paying for it all up front, paying for it over time on their bills. The idea is simply to entice people to insulate upgrade their homes with a more attractive payment scheme. So what are your issues with it?"

Giving consumers options means giving them capital. Capital they don't have. Running them into debts. These debts have to covered with rates, nothing comes from nothing.
Those who have nothing (not even the money and brain to handle the installation of a drought proving strip!) are not able to handle their own financial situation, their energy demand.
Giving these people the chance to run further into debts is heavily cricised by all consumer organisations.No matter what is consumed-as long as debts are generated this lures them into the debt trap.

The consumer organisations have still not been asked about the issue - why not?!
Why are energy advisors/bankers not themself borrowing money to the poor to improve their fate?

It would be illegal.

Nothing comes from nothing. Debts DO cost energy and do not save energy.

A building with an increased value will see an increased insurance premium b.t.w..

But with a debt burden it will not be sell-able.
How will an indebted household be able to sell/inherit/rent a building? Switch the energy supplier?

The cheapest utility company is the one with the lowest outstanding bills.

How will a household be able to switch from an expensive electric heatpump to a cheaper gas condensing boiler?

Will the LPG suplier take over the debts from the electricity supplier? Pay for the burned pellets and a useless boiler once the home owner wants to switch?
Remember that the EU DEMANDS free choice of energy supply.
No private energy supply contract is allowed to be fixed over more then a year, similar to the telecom contracts.
Basic consumer law.
Saving a tenner per month on energy over 12 month minus rates and VAT (energy VAT is 13.5% but a boiler VAT is 21%) will leave the householder with a creditworthness of about ?80.-. This buys a drought proof strip and covers the installation costs. Not more.

And IF the exploitation of the paupers will be allowed further by "special laws"---
what if these peole can't pay their bills anymore-will someone come along and confiscate the droughtstrip/heatpump/insulated cylinder?

Consuming with the aid of debts has run Ireland into a financial disaster. 12% above the Maastricht criteria.
And now the private poor consumer, those with a low understanding of economics and no mortgageable income should be even further indebted?!
These poor people will be the first to feel the brunt, to get their social allowances cut.
Making them even more vulerable, their homes even more neglected. Not having the money to replace a rain drain, to decorate, their poorly rated homes will loose faster on value they can save energy.
This PAYS is a rat race, without any economical benefit to those involved. Except to those who install, sell and cash in the rates.
Fattening the ones who are better-off anyhow.
Bussiness as usual, the paupers bled further.
Manchester capitalism, one has to pay to stay poor. And no way out of it, no hope. But a draughtstrip...
If there was a social issue like fuel poverty why does the state not start with it's own buildings, keeping it's own doorstep clean? Reducing the taxes? Allowing for a better distribution of what society could offer to those who are incompetent to fix a droughty door, to purchase an energy saving light bulb?

Instead the state rents out F and G rated homes.
Uses H rated buildings and cars himself.


Has the state lost all it's credibility? And is now looking for underwriters to finance the next election? Buying the votes of builders and installers (vote green!)?



Shame on them!

Heinbloed

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written by lenny , December 08, 2009

Roberto - thanks for your comment and ideas. Basically what's being proposed is that energy companies would offer energy upgrades - insulation, more efficient heating systems etc - and then people could pay for the measures over time on their energy bills, rather than up front. It's only an idea at the moment but is something our government and energy providers are very interested in.

heinbloed - you said that PAYS is an "intellectual disaster" that's "based on no science, on no experience, on no social understanding, no knowledge of biology."

Could you elaborate further? All PAYS aims to do is to give consumers the option of having energy upgrade work done and, rather than paying for it all up front, paying for it over time on their bills. The idea is simply to entice people to insulate upgrade their homes with a more attractive payment scheme. So what are your issues with it?

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written by heinbloed , December 04, 2009

If the consumer is not feeling the stick he/she won't move.

Carrots will only fatten him/her further. The more he/she has available to spend the more energy will be consumed.

Eurostat just published the statistics on electricity usage for the last few years, the private households are consuming for the first time ever recorded less electric energy compared to the previous year.
Thanks to the stick! And not to the carrot.
This PAYS scheme is right an intellectual disaster, wasting time and energy. Based on no science, on no experience, on no social understanding, no knowledge of biology.
"Outphasing" of energy wasting products success is called. Replacing them with more expensive but less energy demanding products forces the consumer to adapt to reality.


Here the link: http://ec.europa.eu/dgs/jrc/do...ity_en.pdf


The Germans went even further, they reduced the social benefits on an overall level and 12 % less children were born within a few years. Which resulted in an overall energy consumption of about minus 3%, not only electricity.
The less we feed the less they breed.
PAYS to the people and they gobble it away.

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written by Roberto , December 04, 2009

Could the company who have business in the upgrading field, have a door to door campaign for the home energy measurement? I dunno how exactly the measurement is intended to happen. Unfortunately we are used to live a life where services are offered and we are to lazy even to read the ads. Have tv shows on local tv stations and radios promoted such measurement? What action has been taken and from who? Or not yet?