Demonstrating the value of upgrades

When a Basingstoke Housing Association was looking at upgrading the heating in 200 of its rural properties to meet the main driver of helping alleviate fuel poverty, it was also able to make a strong business case to fast-track the investment needed.

Sentinel Housing Association owns and manages around 10,000 homes across 12 local authority areas in Hampshire and Surrey. 

Sentinel had already scheduled 200 rural off-gas properties for an upgrade over the next five years but these have been fast-tracked to enable tenants to benefit from lower energy bills and better overall temperature control with the installation of air source heat pumps, alongside improvements to future proof the homes.

Asset Manager, Carolyn Munns explains: “The main reason for looking for a renewable heat source was the high cost of the existing fuel solutions. This is an off-gas area so they were all powered by either electricity or solid fuel. We are confident that tenants will be saving hundreds of pounds in energy bills by switching to air source heat pumps.
“We also used this this as an opportunity to demonstrate how investing in better, more energy-efficient homes can have a material impact in removing tenants’ concerns about heating and bills, addressing fuel poverty.  By ensuring it’s affordable for residents’ to heat their homes properly, we also see a reduction in instances of damp and mould, reducing our overall maintenance costs,” adds Ms Munns.
Many of the homes in the project are in rural areas where a traditional gas heating system isn’t possible. So, outdated solid fuel or storage heating systems have been replaced with new renewable technology which is much cheaper to run and offers more controllable warmth.
The project’s £1.8million investment, which included payments from the Government’s Renewable Heat Incentive scheme, has seen Sentinel work with local firm Faulkners to install Mitsubishi Electric Ecodan air source heat pumps.
Kevin Hartshorn, Assistant Director of Asset Management at Sentinel said the work is part of Sentinel’s overall drive to lower living costs for their customers and reduce carbon emissions: “The project is part of Sentinel’s corporate social responsibility strategy which aims to work with suppliers, contractors and partners to reduce the carbon footprint for Sentinel, source products ethically and promote sustainability.” 

Happy tenants
Customer feedback’s been really positive throughout the project and it’s already making a big difference to customers like Andrew Jankowski; “It’s amazing the whole system was installed in just four days. Faulkners did a great job and now I’ve got a really lovely even heat around my home. I love the fact that its eco-friendly and affordable, I’m expecting my bills to go down by a third each year.”
The social housing provider was looking for something that would be easy to control for tenants as well as helping them save money. 
In addition to the financial benefits of the renewable heat pump solution, the residents also benefit from a better quality of life as a result of having access to cost effective heating throughout the winter months.  Sentinel also undertook other works involved in future proofing the homes, for example making sure that windows and insulation meet the required standards.
Ecodan air source heat pumps were chosen because they are recognised as renewable and have now been installed in thousands of property types throughout the UK.  Sentinel also worked closely with manufacturer, Mitsubishi Electric to ensure tenants understood how to use the new system.

Proving added value
In addition to the benefits outlined above, Sentinel also wanted to be able to prove a long-held theory that there were other benefits and knock-on effects of improving the heating for tenants. 
“We wanted to be able to demonstrate how this investment would also lead to an increased benefit for both ourselves as the asset managers and also the entire community because it helps lead directly to a proven reduction in rent arrears”, adds Carolyn Munns.
The primary aim of the investment was to benefit the tenants directly and help alleviate fuel poverty in these off-gas properties and being able to prove that it was a financially sound investment was vital.
“This allowed us to persuade the Board of Sentinel Housing to invest money into this scheme and fast-track the funding for these properties that had already been earmarked for improvement.”
The RHI was a major factor in the decision to install air source heat pumps.  Without this incentive the Board would not have been able to proceed with the installation but when this is factored into the equation the money which Sentinel will receive makes it a very cost effective solution.

Impact on rent arrears
Sentinel Housing surveyed the tenants to research reaction and satisfaction, with 80 tenants replying and the overwhelming majority extremely positive about the difference that the improvements had made to them.
The Association then commissioned additional research into the impact that the installation of air source heat pumps has on rent arrears in households. This concluded that arrears did reduce for those with a heat pumps installed.
“We found this an incredibly useful exercise and so wanted to go further than this by using the research to contribute to an important report on the negative impact that void properties have on communities,” explains Munns.
Sentinel actively contributed to the ‘Touching the voids’ report published by the Charity NEA (National Energy Action) recently, which looks at the impact of energy efficiency on landlord income and business plans.
This report and research behind it proved that properties with the lowest SAP take longer to re-let. 
The report also suggests that more energy efficient homes could help social housing providers save over £2.4 million if they upgraded their stock from an average SAP 65 to SAP 75.
“If I could get other social housing providers to take one lesson away from our experience, it would be that the business case for investing in properties using renewable technologies is now proven, especially for off-gas areas,” adds Munns.
“The other thing is that there are always indirect consequences and as the NEA report shows, this investment has had a dramatic and positive impact for both the community around empty properties and the maintenance programme for our assets.”
The end result for Sentinel is an increased benefit for tenants, the Housing Association and the entire community because it helps lead directly to a proven reduction in rent arrears.
Carolyn Munns would be happy to share the research with other interested social housing providers and can be contacted at carolyn.munns@sentinelha.org.uk.

Copies of the Touching the Voids report, which was supported by
Rockwell and British Gas are available online by visiting http://www.rockwool.co.uk/advice/energy-efficiency/touching-the-voids/