Craving Certainty – Energy savings, facemasks and offsides

I recently listened to a fantastic podcast likening the use of VAR in professional football to certainty surrounding the impacts and restrictions related to Covid-19. A key message from the podcast was that we, the general population, crave certainty around topics as complex as a global pandemic (or the refereeing of football) in simple binary issues such as:

  • Is the player offside?
  • Is it safe to go holiday next week?
  • Was the player fouled?
  • Should I wear a facemask in the supermarket?

Certainty in these instances cannot be related to these simple statements and each one carries multiple assumptions and variables some of which are very difficult to determine.

This craving of certainty is also present when making decisions in investing in our homes and business premises to make them more energy efficient. Often the drivers of such investment are monetary savings and uncertainty of these benefits is often a barrier to invest, as documented in research by the Green Finance Institute. 

To satisfy this craving for certainty of benefits, suppliers, manufactures and sources of information can use phrases that allude to certainty such as “savings up to” and “on average” to provide an indication to the scale of the benefits available. However, this one size fits all approach could be misleading those investing to what benefits will be realised.

For the purposes of an example I have found a cavity wall insulation contractor that states cavity wall insulation saves you up to £225 a year on your heating. Stating that this figure is based on adding insulation to an uninsulated detached house.

Here the phrase “up to” acts as an insurance mechanism for the contractor as the savings could be £0 a year or could be £225 a year and they would still be correct, providing little certainty to the customer. Disregarding this sneaky wording and even with the stated caveats around the property type, as with the VAR and Covid-19 issues, there are still several unaddressed variables that need to be understood and allowed for in any calculation or verification of savings. Below, five variables are listed that can hugely affect the potential savings of this particular measure; although this is by no means an exhaustive list.

  • Heating source – gas boiler, oil boiler, electric radiators, heat pump. Each will have an individual efficiency at which they deliver heat to a property and hence will impact on any reduced heating demand. A more efficient system will generally cost less to run but also result in less savings.
  • Price of energy –  this is an ever fluctuating variable and can depend on tariffs, fuels in use, time of day. Clearly a lower price of fuel will result in lower savings.
  • Occupancy schedule  – How often is the property occupied? A building occupied (and heated) all day will have higher heating demand (and savings) than one that is occupied just evenings and weekends.
  • Take-back effect – With insulated walls it may be possible to achieve new levels of thermal comfort in a property. Research has shown that this can totally eradicate any potential savings compared to if the same levels of comfort were maintained after the improvements made.
  • External climate – Whilst it can feel like the UK climate follows the same cycle each year. The severity and duration of cold weather can vary significantly annually (think February 2018 Beast from the East). As such, so can energy bills and any savings. Understanding the impact of the external climate is key to retrospectively calculating the savings of any enhancements.

To quantify and analyse some of these items is not straightforward and would require significant monitoring pre and post installation to truly understand the impact of these. Taking up resources and effort beyond the capability of a lot of customers.

The take home from this post should be that isolated statements such as “savings up to” provide very little certainty and, like VAR and the pandemic, absolute certainty is almost impossible to come by.  Whilst nobody should be discouraged from investing in making their property more efficient it is important to understand what variables are at play and what assumptions are present in any quoted savings. These assumptions should be challenged as to whether they are representative of the situation in question. Any company quoting a “savings up to” statement should be able to tell their potential customers what these assumptions are and how they can vary the potential savings of an investment. If they cannot, it is likely they do not truly understand what they are selling and I suggest these are avoided and an alternative sort. This is of particular relevance as soon many, including myself, will be hoping to take advantage of the Green Homes Grant to improve the energy efficiency of their home and will want certainty on what savings to expect whilst navigating ambiguous “up to” statements.

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