www.constructireland.ie

Campaign for energy upgrading Ireland

Following the news that 80% of homeowners want energy upgrade through utility bills Construct Ireland is developing a campaign for Pay as You Save (PAYS), a system which could be utilised to achieve substantial energy upgrade work in virtually every occupied building in Ireland. Once you’ve read the following introduction to how this might work, you can register your support for a concept which could become a major driver in Ireland’s economic recovery whilst simultaneously making Ireland a world-leader in green employment and innovation.

What is Pay as You Save?

Pay as You Save (PAYS) is a system that enables building owners or tenants to obtain and install energy saving technologies and materials with no up-front payment and no debt obligation. Those who benefit from the savings pay for these products through a tariffed charge on their utility bill, but only for as long as they occupy the building where the products were installed. The monthly charge is always lower than the product’s estimated savings and it remains on the bill for that location until all costs are recovered. Like a loan, PAYS allows for payment over time, but unlike a loan the PAYS obligation ends when occupancy ends or the product fails. PAYS was developed by Harlan Lachman and Paul A Cillo of Vermont’s Energy Efficiency Institute, and has successfully been used in programmes with six utilities in the US.

How does PAYS enable immediate financial savings?

Customers who sign up to a PAYS tariff see an immediate financial benefit, as the repayment tariff is set up to cost less than the amount of energy that the customer has avoided using. Under PAYS, the repayments for the energy upgrade work on an energy bill would always be lower than the cost reduction caused by the energy savings achieved. To achieve this, Lachman and Cillo developed what they call the ¾ - ¾ rule. Firstly, the amount of the monthly payment cannot exceed three quarters of the estimated saving, which means that the customer will get immediate financial savings – even if their savings estimates are off by as much as 25 per cent. If the estimates are correct, and a customer uses PAYS to reduce their annual energy bills by, say, €1000, the PAYS tariff would cost €750 – a net saving of €250. Secondly, the payment term for PAYS products cannot be longer than three quarters of the measure’s estimated life – thereby ensuring that customers don’t keep paying for technologies that they no longer use.

The payment obligation is attached to the property through the electricity meter rather than to a specific owner or occupant. A PAYS tariff is included on the energy bill until all costs associated with installing the measures have been repaid, including repairs, missed payments, interest, programme fees, and so on. If the occupancy of the property changes hands, the new occupant who receives the savings from the installed measure assumes the obligation to pay the PAYS tariff on their energy bills. If there’s a gap between occupancies, the repayment period is extended out accordingly.

Construct Ireland’s PAYS proposal

Construct Ireland proposes that the government should encourage or even mandate state-owned energy utilities and private energy suppliers to offer their new and existing customers PAYS tariffs. The cost of the work would be assigned to the energy bills of the customer, and repaid over an agreed period of, typically, from five to twenty years or so. The actual amount and term is determined by the cost, savings potential and expected lifespan of the measures, and to what both the customer and energy company are prepared to accept. In the case of homes, this might typically involve installing measures ranging from costs of a few thousand euro up to twenty thousand euro or so, with larger investments justified in buildings with higher energy consumption. Any energy saving measure, including a vast range of materials and technologies, could be included within a PAYS tariff, if it can be proven that the measure will save sufficient energy over its expected lifespan to prove cost effective within the terms of the tariff. This could include anything from CFLs, to various forms of insulation, to heating system replacement to microgeneration of electricity. Customers could even use such a tariff to make incremental improvements over time. For instance, initially the tariff could include a repayment for CFLs over, say, one year along with cavity and attic insulation over, say, three to five years. Perhaps after feeling the benefit of the insulation over a couple of years the customer might like to add a boiler replacement and solar thermal to the tariff over five to eight years or so. Ten years down the line they may wish to use a PAYS tariff to help make their house carbon neutral. PAYS therefore offers the prospect of creating a continuous demand for innovative technologies to meet customers needs in a changing energy (and climate) landscape.

More information

Read a preview of Construct Ireland editor Jeff Colley’s article on PAYS from the latest edition of Construct Ireland by clicking here.

Register your support

To show your support for the introduction of PAYS just fill out your details here. Your name and any comments will then be listed on this page.

Your Name (*)	Invalid Input
Company Name	Invalid Input
Your email address (*)	Invalid Input
Comments	Invalid Input
Submit

Supporters of pay as you save

'I have done some research into the PAYS system and having spoken to Harlan Lachman of the Energy Efficiency Institute. I have concluded that the PAYS system offers an excellent means for people to improve their homes and their lives without borrowing or investing their own money. I think it would show good leadership if the PAYS system was implemented by the energy utilities and was available to everybody.'
- Jay Stuart, DW EcoCo Ltd.

'From my experience in developing Energy Smart Communities in the Dublin area I would strongly recommend the development of PAYS as a highly innovative financing mechanism to unlock energy efficiency renovation in Ireland.'
- Gavin Harte, Energy Smart Community

'It is a brilliant idea. Just need to ensure that consumers are protected from cowboy traders and installers, as there are many consumers who are not familiar with alternative energy systems. I also think that the scheme should be limited to insulation and solar water heating system at the beginning. Since these are the low hanging cherries, and do not need much investment to start with.' - Kean Soon Tan

'Aim to make high profile with Government & all political parties. Current individual carbon foot print is 10.4 tonne. Target to sustain the planet is two tonnes.'
- Gerard Shearman

'An excellent idea that any government should support. Positive for jobs, fuel poverty reduction, carbon commitments, energy resources and environment.'
- Niall Leahy BE, Energy Profile

'I think PAYS is a fantastic initiative and should get the full backing of government. Having recently availed of the Home energy savings scheme, we found ourselves doing doing lots of jobs in the house that had been on the long finger, once we had tradesmen on site. This initiative can have good knock-on effects to the construction industry and also help legitimize mush of the black economy work going on at present.'
- David McHugh, ProAir Systems

'This is real innovation in thinking. A great idea, well thought out and easily implemented when compared to many of red tape laden ideas coming from the green engine of our government. Why not get the PR machine going and give clear and easily understood press releases to community / free newspapers. Get people takling about it everywhere you can. Use all mediums. PAYS makes sense. Best of luck and well done.'
- Brian Fitzpatrick, First Consul

'Great idea and certainly would help stimulate the green economy.We need a lot more innovative ideas like this if we are to pull ourselves out of the crisis we find ourselves in!'
- Dennis Nordon, Hanley Energy LTD

'Superb idea. Implementation will be key to success. Energy savings will need to be guarenteed over long term which should dissuade the cowboy and fly-by-night tradesmen from getting involved.'
- Michael Kiernan, rebelenergy.ie

'Who would be responsible for hiring the upgrade service company?'
- Paul Branigan, Thermafill Insulation

'With the lack of funding available from the financial institutions to homeowners as well as businesses this sounds like a win/win solution. This should be lobbied all the way to the cabinet table.'
- Donal Gilroy, Gilroy Energy Services

'It’s a great ideal and with existing grants available from SEI it would be affordable to all households to improve their energy efficiency, save money and also reduce their carbon foot-print. Even more savings would be achieved if a Carbon-Tax was introduced in the next budget and also help Ireland achieve the target set out in the Koyto agreement and create badly needed employment.'
- John Hanafin, Aratings

'Jeff, The "ability to pay" is always an issue with low income households, this system will provide support to all householders for the first time, including social housing tenants. The additional cost needs to be included in a separate and transparent manner on the utility bill, identifying total balance outstanding on that property, time/period to payment closure. Care needs to be taken with the obligations of the utilities, i.e. after full payment is recovered that the electricity price will revert to standard tariff rates.
- Peter Keavney, Galway Energy Agency

'This is a good scheme. I hope it gets Govt support'
- Dudley Stewart, Micro Electricity Generation Association

Not only a positive environmental move but a kick-start to the failing construction industry, a boost to the sustainable sector in Ireland and best of all energy savings for those who most need it. With customer protection in place, this could lead the way forward to carbon zero housing.
- Kya deLongchamps Richards, Freelance journalist and columnist for the Irish Examiner

This sounds like a fantastic scheme, I will definately being taking advantage, its our first step to overcoming our reliance on fossil fuels
- Rob Jones, Gorilla Design

Sounds like a workable, useful idea! But there would have to be a legal requirement for sellers to disclose any PAYS tariffs outstanding on a property - otherwise, they could just let it mount up and become the responsibility of the next owner.
- Michelle Whelan

Great idea, will really address the financial barrier to upgrading!
- Paul Kenny, Tipperary Energy Agency

Excellent initiative by CI, good potential win win scenario for consumers and service suppliers at a time when Ireland needs it most. Supplement PAYS with appropriate educational information to help achieve long term sustainable change.
- Brian Cahill, Aerobord LTD.

This is a wholly sensible suggestion as to how to reduce energy demand and wastage, reduce co2 emmissions and the resultant national fines and also to introduce to the majority education as to energy control. I support this entirely.
- Adrian Hennessy, Liam Ryan Architectural Services

I support any project, or scheme, which encourages homeowners to improve their domestic Energy Performance. As a practising Domestic Energy Performance Advisor, I would like to see qualified, independent - of scheme - Building Energy Rating assessors used in the monitoring & evaluation of these schemes. I am currently registered with the GREENLOAN Ireland Home Energy Savers scheme as a BER Cluster Leader and see the expansion of this, and other schemes like it, as a great opportunity to re-direct the dormant construction industry. Prior to setting up my business, I was a building services consulting engineer and, like many others, a direct casualty of the economic downturn. I would like to see the PAYS scheme properly managed and coordinated to ensure that this does not result in a monopoly situation of the larger organisations unfairly dominating the market with un-focussed, one-size-fits-all, solutions which benefit no-one. Care needs to be exercised to ensure that real benefits, to the industry, to the homeowners, to society, to the environment, come out of any PAYS scheme proposed.
- Mark G Newman, MN E Assessments

The logic behind this innovative idea is excellent.Individuals reduce their energy bills and improve their homes in an affordable manner,it will help to achieve our carbon reduction committments, it will provide jobs, our energy will be used in a more efficient way, now is the time to act quickly and decisively.
- Jason Cummins, Sable Technologies

Great incentive to focus on energy saving. Better mortgage relief should also be offered on new build energy efficient homes to focus the supply end. Keep up your good work in Construct Ireland
- John Morehead, Wain Morehead Architects Ltd

This scheme will help bridge the gap that currently exists between the desire to cut emissions and difficulty in financing long term projects. Heatricity fully supports this initiative and looks forward to its implementation.
- Ciaran Cotter, Business Development Manager, Heatricity

Other supporters
Colin Harris (Trinity College), Sean Feeney, Nick Becker, Chris Gibbons (CIT), Michael Lyons (Future Energy Solutions West Ltd)

Green Awards Winner

Latest Headlines

Featured Article

Search Construct Ireland

Latest Blogs

Latest Blog Comments

Popular Articles

Issue 2, Vol 5 Out Now

Upcoming Events