A new Green Homes Incentive that will support the construction of more thermally efficient and carbon-neutral homes in Wales is now available to residential developers that adhere to environmental regulations.
The Welsh Government funds the Green Homes Incentive, which offers a reduction in loan repayment rates of up to 2 percent on residential development loans from the Development Bank’s Wales Property Development and Wales Stalled Sites Funds.
With interest rolled up over the course of the loan term, financing for up to 100 percent of building costs is offered. The eligibility requirements, which include non-concrete buildings, non-fossil fuel heating systems, Passivhaus certification, and an EPC A rating, will determine eligibility.
Around 30% of emissions in the UK are attributable to building operations, primarily from heating, cooling, and energy use. For brand-new structures, the embodied emissions from construction may be responsible for up to 50% of the building’s lifetime carbon emissions.
According to the most recent RICS data (from 2020), 77 percent of all new construction in Wales had an EPC B grade, while only 5 percent received an A rating. Solar panels, double/triple windows, and additional insulation can all help to raise EPC ratings.
Alternative building materials with smaller carbon footprints than concrete include timber frames, hempcrete blocks, limecrete blocks, and mycelium bricks. Over the past ten years, the use of timber frames has increased in popularity, but recent worldwide challenges on the price and availability of timber have caused a number of developers to switch back to using concrete, necessitating the need for financial incentives.
The new incentive will also be advantageous to developers who install non-fossil fuel heating systems because ground source and air source heat pumps dramatically lower operating energy consumption over the course of a building.
Julie James, the minister for climate change, stated: “As we all work together throughout this decade of action, addressing the climate emergency must be at the core of all we do in Wales.
“As we work toward a Net Zero Wales by 2050, the Green Homes Incentive will assist SME homebuilders in producing low carbon homes.
Finding creative ways to increase the energy efficiency of new homes will also lower costs for homeowners, which is essential as we assist people in navigating a crisis in the cost of living.
“Sustainable business is at the heart of our basic beliefs, so we want to support developers making the move to greener development methods as part of the Team Wales mission to build a stronger, greener economy,” said Giles Thorley, Chief Executive of the Development Bank.
“Our Green Homes Incentive offers lower borrowing costs for housing projects that will contribute to the delivery of more thermally efficient and carbon-neutral homes in Wales. It’s the first of a number of initiatives as we seek to promote the move toward net zero by providing funds for environmentally conscious businesses.
“We are already seeing examples of developers wanting to make the change towards more eco-friendly options, particularly given the upcoming changes in building regulations which are likely to impose higher eco-standards across all new schemes,” said Cenydd Rowlands, Property Director at the Development Bank.
“We are aware of the value that developers place on financing security. Given the recent increased uncertainty surrounding other crucial development factors like supply availability and material cost inflation, this has taken on even more significance. Our committed property team is here to assist with a prompt decision-making procedure that is intended to encourage more developers to construct greener homes as soon as feasible.
Wellspring Homes, a Cardiff-based developer, intends to leverage the Green Homes Incentive for their next project. The business is almost finished constructing its first building made of Hempcrete, a permeable natural material that is “better than zero carbon,” utilising local builders. Eight low-carbon homes will be included in their upcoming Neath development, which has received planning permission. All will have solid walls made of hempcrete with an A grade energy rating and air source heat pumps installed.
We have a chance to create houses in Wales in a different way by employing more cutting-edge construction techniques to provide the next generation of living space, according to director Hadleigh Hobbs. Solid Hempcrete walls are being used to construct each of our residences.
This provides exceptionally good thermal mass thanks to its special qualities that limit temperature changes, release interior moisture, and almost eliminate condensation by storing and releasing heat from the building’s walls. Hemp is used in the walls to lock up carbon dioxide in the building’s framework.
“However, if we’re going to scale up and offer more low carbon homes in Wales, funding is crucial for our business. This will allow us to develop the technology and make it feasible for future homes to be sold on a commercial scale.
The Development Bank is aware of this issue and is now able to provide the assistance required to reduce carbon emissions through the construction of new homes that are aesthetically pleasing, well-built, and good for the environment.