Energy efficiency model makes financial sense
Parity Projects’ Portfolio service, which captures, models and tracks energy efficiency performance of homes, is being used to raise sustainability-linked finance.
Since its move online 5 years ago, Parity Projects’ Portfolio service has assessed the retrofit potential of over a million homes for landlords of all scales. Initially the service was largely used by landlords to understand (and improve) the quality of their data and understand the cost and delivery implications of potential standards for 2030 and beyond. That data is now being put to work to raise the finance required to deliver the works.
Broadacres Housing Association, a landlord of 6,500 homes in North Yorkshire, recently secured £30m of new bank funding to support its affordable warmth strategy and long-term net zero strategy.
David Smith, resources director from Broadacres commented:
“In the Housing Sector the funders are very keen on Associations’/RP plans for reaching SAP C by 2030 and forecasts for Carbon Neutrality in 2050. Increasingly, the facilities offered by the Banks and Bonds are linked to achieving ESG targets, now and in the future. They discount the financing for improving SAP ratings in our homes in year, measures to reduce our carbon footprints more generally (for instance replacing fleet with EVs, more landscaping) and improved sustainability in our future development plans. The targets they introduce are being measured annually to ensure continued discount against the loans. Longer term the funders are interested that RPs have a plan in place for both 2030 targets as well as 2050. The Portfolio planning tool has helped Broadacres plan for both of these critical dates, allowing us to incorporate some critical assumptions of our future costs and borrowing needs. The funders are taking these plans; medium and long term very seriously!”
Another Parity client, L&Q, has recently completed the issuance of a £300m bond reliant on a number of sustainability linked targets. Liz Blackwell, group head of environmental sustainability, L&Q Group commented:
“The Portfolio tool has played a crucial role in being able to benchmark our housing SAP ratings, track progress and ultimately set meaningful targets. This has made it possible to include SAP targets within our recent sustainability-linked bond £300m bond, focusing on reducing carbon emissions and improving energy efficiency in residential homes, while creating more affordable homes for people at the same time.”
There continues to be a tension between carbon emissions, cost of bills, and uncertainty about standards, but that doesn’t have to result in a trade-off. The Portfolio tool has in-built flexibility to identify packages of measures that hit multiple targets.
Russell Smith, managing director at Parity Projects, said:
“The flexibility of the tool is core to our mission to provide a plan for every home, from strategy through planning to execution. Not only do we need to plan retrofit in response to the unique characteristics of an individual home, we also need to respond to the priorities and practicalities of the owner. Which homes are most at risk of fuel poverty, and can retrofit reduce that risk? Is a property empty, or do we only want measures that can be installed while a tenant is in residence? What is the maximum spend, and over what time period? What makes a home net zero or heat pump ready, and how can we model it? We help our clients identify answers to these and other questions, for individual homes and across the stock, so they can use the data to raise finance with confidence.“
Find out more about Parity Projects’ Portfolio service.
Related Content
Baily Garner and 4i Solutions have merged
- © Ocean Media Group