New Nudge. Carbon Cashbacks?
They've already successfully partnered with Which?, is the the new Snugg scheme a game changer? Lets check in with facts.
An annual cashback scheme from the Scottish based tech company could be a first step towards successfully incentivising the sluggish home improvement market. It's not just for homeowners it's for businesses too...
One of the problems with managing the huge swathe of privately owned homes is understanding the changes in fabric improvements or switches to green heating and how they impact on energy use. AND then rewarding those changes.
The concept being launched by Snugg, is an annual cash payment for verifiable home improvements that directly improve the performance of individual homes.
Snugg Did A Snazzy Explainer Video
Green Home Finance Accelerator
The scheme is in beta mode right now, when we spoke to Snugg they said the plan was to take evidence of installations of solar, heat pump and other clean energy sources and fabric changes like insulation and reward homeowners with up to £2000 of payments.
Bourne out of the 'Green Home Finance Accelerator' run by government, the payments could run for up to 10 years, which means household receiving £200 every year towards their improvements.
You can see the clear, linear connection between these improvements and cumulative benefits across society, if we look at what each home improvement means.
Steps To Secure Our Energy Security
Each solar panel installed, reduces demands on the use of gas boilers. Each gas boiler replaced reduces our reliance on international gas prices.
Each home made more energy efficient drives us towards homes which are going to be healthier to live in 'cause simply - residents can afford to heat or cool themselves.
Insulation from temperature changes, both cooling and heating - mark performance needs which are going to become increasingly more demanding.
And in a time of rapidly eroding confidence in our defence partners, being self sustaining is a vital gain.
Businesses Can Join The Scheme NOW
The scheme is available to commercial operations too. We have been told the Carbon Cashback scheme can be used as a way of directly demonstrating to customers your business are investing in clean heat and energy reduction measures.
Places on the scheme are currently on a voluntary basis so if your business is interested in understanding how to benefit from the scheme you can contact Snugg directly.
Interested businesses should contact Snugg at snugg.com/carbon-cashback.
We're going to be interested in how these Scope 3 emissions improvements will be communicated by businesses, as one of the challenges of any improvement measures is clearly messaging what you are doing and how it is working.
Positive Incentives - The Buck Stops
Ultimately, this scheme hones in on one of the biggest barriers to accelerating home improvement.
The cost.
The misunderstood but highly profitable Repair Maintenance and Improvement (RMI) spend by private households amounts to over £60 Billion a year in the last reported financial year.
This spending on homes already exists.
That equates to enough revenue over 10 years to completely refurbish all of the UK's housing stock.
So why don't British consumers have the incentives to switch out their energy source and improve their insulation?
That's the messaging problem. And somewhere we have to ask, what can be done?
So maybe, this is another good incentive. The baseline improvement for each measure is to achieve a 5% reduction in energy use.
As George Wilson the Carbon Markets Lead at Snugg says;
"Carbon Cashback represents an important step forward in incentivising home energy efficiency improvements by tackling the biggest barrier homeowners face - cost. By offering financial incentives, we believe this innovative approach will result in many more homeowners upgrading their homes."
You can see the logic here. People already complete improvements.
Get them to improve by one step in a piecemeal way towards reducing their carbon and they, 'hey presto' get a cashback for something they were already planning towards anyway.
Using Proven Methodologies
The Cashback scheme plans to use the well known VERRA methodology, combined with smart meters to monitor the qualifying homes.
In essence, homeowners will be accessing the Voluntary Carbon Market by adopting the cashback scheme and this represents a handy, win win situation for them. There's no charge for signing up to the scheme. And you get yearly payments....
It's going to be interesting to see how quickly the scheme is adopted, especially as it's not the only horse in the race.
First Mover Advantage
As we move towards incentivising both businesses and consumers in the journey to a greener planet. Snugg might feel pretty pleased about their move. And it should be applauded.
It's brave company that steps up to take on the problem of financing.
But the scheme has benefitted from one useful check. They tested the concept on users before launch. And here's what they found. 90% of respondents expressed an interest in joining the scheme.
And that is an indicator of interest. But is it going to be indicative of future success?
We hope so. Good job Snugg.
The Race Is On
However. We do know. From first hand interviews. Snugg will have competitors snapping at their heals very, very shortly.
With Carbon Cashbacks representing a toe hold in the process of residential decarbonisation.
Private financing companies have spotted the opportunities and are already partnered with other tech and software companies so we expect this space to get competitive, very quickly.