Green Deal Blog
Thoughts, experiences and learnings from our Green Deal and ECO schemes
Update, autumn 2015: The government has stopped funding the Green Deal Finance Company and the Green Deal Home Improvement Fund is closed to new applications, so we will no longer be posting entries on this blog. We are likely to provide commentary on whatever replaces the government's Green Deal finance.
Click to go to the relevant blog post
Making the right choice for a warm home | 6 February 2015
ECO payment timescales | 24 November 2014
When do we get paid? | 27 August 2014
What a month for the Green Deal Home Improvement Fund | 13 August 2014
The Green Deal Home Improvement Fund: update | 24 June 2014
How CSE's volunteers add value to comlex retrofit schemes | 6 June 2014
Green Deal Home Improvement Fund launched | 8 May 2014
How the ECO proposals could benefit energy suppliers | 22 April 2014
Funding insulation for park homes | 9 April 2014
The ECO consultation - what's the impact? | 25 March 2014
Five months on...a long road to a good result | 17 March 2014
We're expanding our CSCo offer | 6 February 2014
Forthcoming changes to Energy Company Obligation - thought in brief | 5 December 2013
Developing the local supply chain | 29 November 2013
28 days later...we're a little bit closer to helping a customer claim a grant | 28 October 2013
DECC's call for evidence on solid wall insulation delivery and finance | 15 October 2013
ECO starts to evolve | 11 October 2013
The second customer on our new scheme shows how complex ECO can be | 1 October 2013
The ECO scoring saga | 14 August 2013
Uncertainty around ECO scoring continues...continued | 3 July 2013
Analysing our Green Deal pilot scheme | 19 June 2013
Uncertainty around ECO scoring continues | 30 May 2013
New Green Deal assessment figures released, but what do we do now? | 15 May 2013
Making the right choice for a warm home | Posted 6 February 2015
The weather is cold, and at this time of year there is always furious activity in the insulation industry as people retrofit their houses with energy efficiency improvements.
CSE’s Home Energy Team are encouraging householders to take advantage of grant funding which is currently available, but advise properly considering the options before installation, as insulation improvements tend to be difficult or expensive to replace. The cavity wall insulation industry – a mature market with a variety of products and installation techniques – is a good example of where product choice is important.
There are two main options for retrofitting insulation to a cavity wall; a blown EPS (expanded polystyrene) bead insulation or blown mineral wool. The EPS bead is the better product.
- Full coverage of the cavity resulting from the way the EPS beads flow in. This means there are no cold spots and there is no settlement or sagging of the product
- Superior thermal performance
- EPS beads do not absorb moisture. The bead design allows moisture to disperse as gravity pulls it downwards, rather than transferring it laterally to the internal skin of the wall
- Alternative installation options. EPS beads can be installed using a thermoscopic lance which is inserted along the inside of the cavity and can be extended up to 7.3 metres. This eliminates the need for drill holes on the face of the wall (therefore preserving the property aesthetics) and can help with difficult to reach areas (e.g. where there is a conservatory, shed or car port)
We have a direct link to a bead manufacturer and installer and are currently advising customers about an ECO offer which allows this product to be installed free of charge. There are normally additional costs associated with installing EPS bead as opposed to mineral wool, but these are absorbed by the funding scheme.
Cavity wall insulation is a long lasting improvement, with 25 year CIGA guarantees being issued against installations. There has been a huge demand for assistance with the cost of insulating properties, so householders are being encouraged to act swiftly in order to benefit from the offer.
For further information and advice, call the Home Energy Team on 0800 082 2234 or email firstname.lastname@example.org.
Having completed delivery of our first ECO funded scheme earlier in the year, we thought it was time to take stock of some of the challenges faced and follow up on our ‘When do we get paid’ blog post from 27 August 2014.
Now that the final payments have been received, we are able to analyse the payment timescales and how they impact delivery on a scheme of this nature.
On average it took 193 days for us to receive payment from the date the work was installed. Though there is a gap between the work being completed and it being registered with the fuel supplier, this is on average only 8 days. Therefore payment for a job was completed the best part of half a year after product purchase, installation and labour costs had been outlaid.
Subject to Ofgem requirements, installations have to be reported to fuel suppliers by the end of the month after the installation is completed. This throws out some huge challenges from a delivery context, all of which were met by the installers and CSE. However, fulfilling delivery on such strict deadlines makes the payment timescales that were experienced even more incomprehensible.
In some instances, where these delays became unacceptable, we decided to pay installers for work they had completed. As the scheme was focused on enabling SMEs to access ECO, these payment timescales were a very real threat to cashflow and bankruptcy. Filling the payment void is beyond the remit of the managing agent within ECO delivery and doesn’t provide a sustainable solution to long term, large scale ECO delivery.
Our Head of Household Energy Services, Ian Preston, said:
“During our evaluation of the first year of the ECO numerous contractors responded to our survey to highlight issues with payment timescales. Ofgem and the energy suppliers assured us that these issues were being ironed out as a result of cross supplier standardisation. Meanwhile at the coal face the reality is a totally different experience. CSE, as a charity, had to pay several smaller installers upfront who face going out of business as a result of cash-flow issues. It seems wrong for the suppliers who have the biggest bank balances to carry none of the risk, all of which seems to be carried by those delivering the work regardless of size!”
“When do we get paid?” is a question we’ve heard a lot through the delivery of our ECO scheme which closed earlier this year. We knew from the outset that payment terms were going to be tricky and that has certainly proved to be the case.
We also knew that the submission and claim procedure for ECO funding was going to be long, complicated and subject to change. So we tried to manage installer expectations by ensuring that the details of ECO payment terms were fully divulged enabling them to make an informed decision about working on the scheme. This involved specific clauses within a Framework Agreement which we had with each and every installer, explaining that we couldn’t pay out any ECO funding until it had been paid to us by the fuel supplier.
So how did it pan out? Well, sadly but not unexpectedly, in some instances installers had to wait more than three months to receive payment. When you’ve paid for materials and labour that is an incredibly long time to wait, and in any business cashflow is critical. That means we had some pretty frustrated installers and understandably so. Obviously, these payment terms had an impact on us too as there are a lot of upfront costs and time involved in setting up this kind of scheme.
We have absolute confidence that we did everything within our power to enable all ECO funding to be received and paid on as soon as possible. We designed and implemented an internal structure which allowed us to react immediately to any request from the energy supplier for additional information or evidence. Our invoicing and payment procedures were also turned around incredibly quickly.
There’s no doubt that our aim to give local SMEs access to ECO funding has been a challenge, though. We hope that this hasn’t had a negative impact on our reputation as we’ve tried to explain the intricacies of the ECO payment terms to installers every step of the way. So, while the challenges may not have been avoidable, we certainly hope that the insights gained were as useful to the installers as they were to us.
We’ll continue to share the lessons we’ve learnt. Hopefully these kinds of experiences will shape the future development of ECO so that SMEs find it easier to join in and benefit.
[Our Head of Household Energy Services, Ian Preston, recently evaluated the first year of the ECO. The study asked installers about timescales for receiving payment for an installation under the ECO from the submission of a completion certificate. There was a high variability of answers, with the average number of days’ ‘delay’ being 54, and a maximum of 150 days. Three quarters of installers said that timeframes for payment were a “major barrier” to their participation in the schemes. Ofgem acknowledged that there may be issues for the supply chain experiencing longer timescales for payments but also highlighted the ongoing work between Government and suppliers to standardise the reporting.]
Our last post was just over a month ago but that’s not because we’ve had nothing to say. We were flat out with preparing our new scheme to help residents in Bristol and Somerset benefit from the Green Deal Home Improvement Fund (GDHIF). We had developed a number of relationships with installers that could take advantage of the fantastic £6,000 cashback for solid wall insulation as well as the attractive boiler upgrade with flue gas heat recovery offer. We had developed a marketing plan with full details about how to promote, including some unique and innovate approaches.
Sadly all this stopped suddenly when the Department of Energy and Climate Change (DECC) announced that the fund was closed to new applications at the end of July. That pretty much took the wind out of the industry’s sails, with anger from installers and householders alike erupting across social media and other news channels as DECC’s decision to close the fund set in.
Here’s an example of the typical comments our Home Energy advice line received after DECC announced the reduction in the cashback amount for solid wall insulation from £6,000 to £4,000.
“I contacted [the installer] yesterday to get things rolling and they are now on the case. However, too late for me to get the £6000 voucher. This now makes it impossible for me to have the work done as I wont be able to afford the 33% I have to pay. I am disabled and live on benefits in a static caravan...perhaps this winter will finish me off and I can stop being a burden on the state. Not your fault of course, I am just venting. Thanks for your help with this you were the only organization that actually responded to me quickly and with good professional advice and practical help. Yesterday I was pretty optimistic that this would actually get done, now that looks highly unlikely unless I can find the funding to help me with the 33%. I have no savings.” [sic]
Then two days later, DECC announced the scheme had closed which resulted in further backlash from the public, indicative of the frustration that badly handled schemes like this bring – a lack of public confidence in Government energy efficiency initiatives.
thanks for the heads up.
Looks like another freezing winter for me then.
“I am absolutely shocked...having just paid £150.00 (which I could barely afford!) for the GD report to be completed today and half way through completing the application form, the govenment website closed down...stating ' due to overwhelming popular demand the GD is no longer accepting applications...This totally outrageous...my property EPC has put me at a level G...the lowest possible grade! With Winter approaching I fear i will be unable to remain living here as the LPG gas alone was nearly £40.00 a week last year...and I had some saving to support my income then.” [sic]
So where do we go from here? We’ll its not all doom and gloom. Rising from the GDHIF ashes we’re continuing with our referral programme to ensure householders can make the most of energy efficiency improvements, by referring to installers that have access to other sources of funding, like the Energy Company Obligation (ECO). In fact, there are some key changes coming to ECO soon and we’ll see if that keeps some of the momentum generated by the Green Deal Home Improvement Fund. The Renewable Heat Incentive is also proving to be anattractive offer to householders who are looking to upgrade their heating systems with greener and cheaper to run solutions. In the meantime, our fantastic Home Energy Team advisors are keeping abreast of local grant and finance offers to help householders across Bristol and Somerset improve their homes and lower their bills.
With the Green Deal Home Improvement Fund (GDHIF) now officially launched, we're taking stock of the impact this will have for the customers we’re speaking to every day.
It’s noteworthy that Green Deal Installers can now route customers straight through to the offer without a Green Deal Provider being involved. This has helped the scheme to hit the ground running and has made the offer more immediately accessible than its Green Deal Cashback predecessor. The result: more than £2.6 million was issued for the GDHIF in first week.
We're also seeing installers putting together GDHIF offers to attract householders. For example, some boiler manufacturers have packaged together a boiler upgrade and a flue gas heat recovery system to create a simple, logical offer (installed together, these qualify for up to £1,500 cashback). An example is this solution from Ideal, and others are following suit.
At CSE, we are working with manufacturers and installers to create a simple offer like this that will enable customers to access up to £1,500 cashback for upgrading their heating. It's a great opportunity! Watch this space for more news.
CSE’s first recorded contact with Mrs Smith (not her real name) was in March 2013. Her heating system was broken during the second coldest March on record and she was living, with her son, in a very cold home. She had suffered a serious medical condition less than a year previously which continues to seriously affect her day-to-day living. She was referred to Care and Repair and our advisor took the trouble, in this instance, to follow up this referral with four calls. None got through to Mrs Smith and messages were left, but we eventually had to abandon our efforts.
Mrs Smith contacted us again in May, and we were able to give her a list of companies which might offer boiler upgrades. In November she got in touch once more and was referred into the BANES Energy@Home Starter, an ECO scheme. Before that, Mrs Smith had been put in touch with a local gas plumber through word of mouth. Over several appointments he had been keeping her old boiler running without charging her, but the system was faulty and didn’t heat the house effectively. Damp problems were prevalent throughout the property. She knew she needed a new boiler but couldn’t afford it, and hadn’t managed to get anywhere with the schemes and organisations she was referred or signposted to.
At her fourth time of calling our advice line, in February 2014, Mrs Smith was referred to our volunteer-led fuel poverty project. Since her referral to the Energy@Home Starter scheme three months previously, she hadn’t been able to progress beyond the first step of having an EPC completed. We had been waiting on Mrs Smith to provide the documents needed to confirm her eligibility for Affordable Warmth grants and to obtain quotes from installers. These hurdles to getting ECO funding were too high for Mrs Smith.
After her referral to the fuel poverty project, a CSE volunteer advisor was able to go and visit Mrs Smith. They helped her to request a reprinted copy of her tax credits letter, essential evidence she did not have, and they helped her to book in an appointment with an installer to get a new boiler. They also completed a referral to Care and Repair to help with leaks in the roof and with draught-proofing the property. They kept in contact with Mrs Smith to keep reminding her of appointments and any other things she needed to do.
In the end, a quote for the work was significantly below her grant allowance and even managed to include an upgrade from her tiny 300x350mm radiator in the kitchen to a larger 400x1000mm in an attempt to help reduce the damp in this room. She now has a new boiler with heating controls and an eight year warranty.
Mrs Smith’s words:
“The old boiler was no good; a plumber said it wasn’t going to work... You couldn’t really take a bath or have a shower or anything. The water took hours to heat up.
I’ve really noticed the difference with the new boiler. I can go upstairs and get a shower with hot water now. Before if you wanted a bath you’d have to fill the bath halfway of cold water before you ever saw any hot water – it was dreadful! I had to always put the heating on for an hour to get a shower, which cost me money that I can’t afford. But now I can go upstairs, turn it on, 5 minutes, it’s like luxury.”
Without a co-ordinated and supportive approach to the application there would have been an extremely limited chance that Mrs Smith would have received a boiler upgrade through Affordable Warmth funding. She found the necessary paperwork very difficult to manage, as well as finding communication via telephone and email difficult. Several appointments she booked turned out to clash with other things, but we managed to help her navigate these and, although not always required, offered to have volunteers present at each appointment to reduce stress.
Mrs Smith’s case is an example of how CSE’s advice team and volunteers combine with our retrofit scheme delivery to make a real difference to the lives of our clients. It is an example that has been replicated for several other clients who were struggling to meet the scheme deadline and benefitted from weekly phone calls or emails to provide advice and prompting, all delivered by our enthusiastic volunteers. Without the integration of the Energy@Home Starter with our volunteer and advice services, several clients in circumstances like Mrs Smith’s would remain without boiler upgrades and would be facing a far bleaker outlook for Affordable Warmth funding next winter.
On 1 May, DECC announced the release of the Green Deal Home Improvement Fund (GDHIF) which builds upon the current Green Deal cashback offer. Starting from 1 June, the GDHIF increases the solid wall insulation cashback amount to 75% of the costs of installation up to a maximum of £6,000. This is far greater than any ECO grant that’s currently available and households are currently being advised that the GDHIF is the best solid wall insulation offer on the market.
A further £1,000 is available for other measures like cavity wall insulation and gas boiler upgrades but in order to claim these, two measures must be installed at the property. If you are moving into a new property, a further £500 can be claimed as well as £100 cashback for the Green Deal Assessment that’s needed in order to access the fund.
e.g. Householder moves into a new property that needs solid wall insulation + gas boiler + double glazing + assessment = £7,600 cashback.
Our Home Energy Team is currently referring customers from Bristol and Somerset to Green Deal Providers and installers for the new Green Deal Home Improvement Fund. If you are getting interest from clients, ask them to contact the Home Energy Team for more information.
Read more about the Green Deal Home Improvement Fund on the DECC press release.
In the light of his evaluation of the Energy Company Obligation’s first year, CSE’s Ian Preston looks at the implications of the current ECO consultation - and how the proposals could actually benefit energy suppliers. Read his analysis of the situation here.
Update 29 April | You can now read the full report from our ECO evaluation (or a four-page summary) here.
Park homes are known to be incredibly thermally inefficient, and the impact of that on the people who live in them is huge (as we discovered in our 'Freedom from Fuel Poverty' insulation project). There needs to be a solution for the people who reside in these properties year round.
Well, good news is on the horizon and action can now be taken to help improve the efficiency of park homes with external wall, loft and floor insulation solutions.
This stems from the publication of this BRE methodology for recording park homes through RdSAP, which means that an EPC can be completed for this property type. The result is that Energy Company Obligation funding, Green Deal finance (where there is an MPAN) and Green Deal cashback can be accessed.
All the requirements of accessing assistance through such schemes still apply, which means there needs to be an assessment of the property and installation of the system using accredited contractors. A 25-year guarantee will be issued against external wall insulation.
At the moment the £4,000 available through Green Deal cashback is the most attractive customer offer. A further £150 cashback for loft insulation and £200 cashback for floor insulation can also be accessed. Applications for these offers need to be made before the end of June 2014.
This is a huge step in the right direction, but there is still a shortfall between the funding available and the cost of the work. With 80% of park homes not having an MPAN (and therefore not being able to access Green Deal finance) there is still work to do in offering a solution that is accessible to everyone who lives in one of these properties.
DECC has published its consultation on the future of the Energy Company Obligation which is running until 16 April. Some of the key proposed changes include:
- Reducing the CERO target by 33%
- Enabling suppliers to carry some of their delivery into March 2017 targets (i.e. carrying forward overachievement)
- Extending CSCo from the 15% lowest income areas to the 25% lowest income areas
- Allowing loft insulation and easy to treat cavity wall insulation to be included as a primary measure in CERO
- Allowing broken or not working electric storage heaters to be scored in the same way as a “qualifying boiler”
- A minimum target of 100,000 solid walls by 2017
- Higher cashbacks of £4,000 per customer for solid wall insulation (although this cannot be used in conjunction with ECO funding)
In response to the announcements on solid wall insulation, it seems to us that the minimum target for solid walls of 100,000 is likely to be predominantly achieved through direct contractual relationships with RSLs and local authorities i.e. works on social housing. It is also worth noting that the proposed target (per year) is lower than the 82,000 houses that received solid wall insulation in 2012.
The proposed cashbacks are likely to make solid wall insulation a more attractive proposition for owner occupiers, particularly mid-terrace properties where the costs are lower and the level of subsidy (in this case) is no longer defined by the measure’s savings. However, the total size of the funding pot and longevity of the cashback offer is unclear, particularly how many solid wall jobs the Government plans to fund itself.
It’s complicated to summarise the impact that these changes will have on the offers available to customers, because there are a number of areas to cover when assessing the help that people can access. This complexity highlights the importance of the role that our Home Energy Team plays in translating the policy and market offers to customers.
The headline information is that grant funding and cashback offers are available for customers who are interested in loft, cavity or solid wall insulation. Assistance with boiler and heating system upgrades is restricted, but we're advising customers to contact us for the latest information.
Analysing the details of the recent changes a little further, we can see that Carbon Saving Communities (CSCo) eligible customers can access grants for cavity wall and loft insulation (virgin lofts and top-ups) and Affordable Warmth (HHCRO) eligible customers may be able to get assistance for boiler and heating system upgrades.
All other customers are classified within the Carbon Emission Reduction Obligation (CERO) strand of ECO and can access grants for cavity wall insulation, hard-to-treat cavity wall insulation, loft insulation (virgin lofts and top-ups) and solid wall insulation. Affordable Warmth eligible customers are likely to be pushed through this funding route if interested in one or more of the measures above.
We're also keenly monitoring the impact of the recent cashback change announced by DECC, particularly in relation to the £4,000 cashback available for solid wall insulation. We'll have to see how this translates to offers within the market to see what difference it makes to customers.
Last October we wrote about the challenge we faced to obtain the title deed for the home of an Affordable Warmth eligible customer on our Energy@Home Starterscheme. We followed this up with an update a month later, when we had established that a solicitor's letter would be acceptable evidence when submitting the completed job to the energy supplier.
Nearly five months later, we're pleased to announce that the customer in question now has a brand new central heating system and couldn’t be happier. But this has only been made possible by the determination of our Home Energy Team to ensure that it all went ahead as smoothly as possible. There were moments when the customer was going to give up because of the amount of phone calls, paperwork and stress that it was putting on her.
We're finding that the ECO can be so complicated that the very people who most need energy saving measures are in real danger of dropping out of the application process. Our Research & Analysis team will shortly be publishing an independent review of the ECO's first year - it'll be interesting to see how the experiences shared on this blog relate to the wider picture. Watch this space.
For the past five months we’ve been working in partnership with Bath & North East Somerset Council and SSE on the Energy@Home Starter, a CSCo and HHCRO (Affordable Warmth) scheme. We’ve been learning a lot about the day-to-day management of delivering an ECO scheme; dealing with customers and installers and ensuring we are gathering the vast amount of evidence that’s needed to fulfil requirements for a submission.
We’re now expanding the scheme to include all CSCo areas in Bristol, North Somerset, Taunton Deane, Sedgemoor, South Somerset and West Somerset. Any Affordable Warmth eligible customers in Bristol or Somerset can also apply.
We've called it the Home Energy Upgrade, and it offers grants for loft and cavity wall insulation. We're not able to include boiler upgrades this time. In our B&NES scheme, we're finding that the ECO grants offered for boiler replacement vary significantly, as do the cost of the installations. This means there's a lack of consistency in the offer we can make to customers, and we think it's unrealistic to ask people on low incomes to contribute thousands of pounds of their own money towards a new boiler. (Afforable Warmth isn't always afforable...)
The insulation offer is subject to survey, but we're able to provide free assessments as part of the scheme, and will offer to help people through the sometimes confusing process - we hope these offers will increase the level of uptake.
It’s great that we are able to help more residents across our patch get insulation installed. Our Home Energy Team is already taking customer enquiries.
As households struggle to keep on top of energy bills, the Government has announced somechanges to the Energy Company Obligation (ECO). Our inital thoughts are that overall, we may be able to deliver better local schemes with the new arrangements, although ambiguity on the solid wall insulation target makes it difficult to know how that will affect our current approaches. At the moment, the proposed changes remain vague in terms of real detail and what this might mean for our scheme delivery. The consultation should go into more detail on the administrative issues, which we hope will enable us to help more households with greater ease.
With the onset of the cold winter weather our ECO scheme, Energy@Home Starter, is getting busier as householders struggle with old, inefficient boilers and cold homes. Bath & North East Somerset Council, our partners in this project, are busy marketing the scheme to local residents, driving enquiries to our advice line. We have also been working closely with the scheme’s installers to try and increase their involvement and generate further customer interest. After all, they are often in the places that we find it most difficult to reach – people’s homes.
Where an installer has access to ECO but is unable to provide fully-funded measures, or where an installer does not have any ECO funding directly, they have been sending customers our way to apply for our funding, providing us with some hot leads. This is proving to be a successful partnership for the installer (they still get the work), and for us (we access the grant and make inroads into the Energy Company Obligation). This procedure can work particularly well for SME installers, enabling them to access ECO funding. This ensures that local installers can take part and succeed in the market.
If you're an installer and would like to find out more about working with CSE on our retrofit schemes, please complete this form and a member of the team will be in touch.
We wrote a blog post on 1 October about an Affordable Warmth eligible customer we’re helping through our new ECO scheme (Energy@Home Starter) and the need to perform a land registry check to provide evidence that the customer is the owner of the property. This property was unregistered, and the customer had paid off the mortgage and was nervous about providing the title deeds - exhausting the options for providing evidence of ownership to Ofgem.
Juliet Morse, Head of Household Energy Services at CSE, has been in discussion with Ofgem to see how best to resolve this situation. Last week we had confirmation from Ofgem that in such instances they will accept confirmation from a solicitor who holds the title deeds or lease on behalf of the householder. Whilst this goes some way to resolving the situation, we feel that it doesn’t go far enough. Solicitors will charge around £40-£100 for this service and asking a vulnerable, elderly householder to pay up front for this seems unreasonable.
We are in discussion with the customer to see if she is comfortable with her solicitor providing us with a certificate of title, and if so we will cover the cost of this from her ECO grant. However, with ECO only providing around one-fifth of the total cost of replacing the boiler, having to potentially take a further 10% of the grant to pay solicitors' fees is, in our opinion, another failing of the over-complicated nature of ECO.
We would like to see a change to this part of the ECO compliance requirements so that, if a property is unregistered, a customer can provide a self-declaration of ownership.
DECC recently asked for more detailed information to be submitted to them on the delivery of solid wall insulation. This included the extent to which 'blended' finance (i.e a mixture of Green Deal and ECO finance being used in combination) is being made available to owners-occupiers and both social and private tenants.
We welcome this opportunity to feed back; it’s really positive that DECC is keen to hear how the supply chain is progressing and what hurdles still need to be overcome. In the introductory letter, DECC state:
“Now that the ECO and the Green Deal have been underway for a number of months, this is a timely opportunity to refresh our analysis and review what, if any, further action by industry or government is needed to support the market.”
The deadline for submissions was Thursday 10th October 2013 and you can read our solid wall insulation call for evidence response here.
In related news, the DECC customer insights team visited our office last week. It was an excellent opportunity to share our on-the-ground experiences of ECO and other retrofitting schemes. We discussed some of the things we've highlighted on this blog, along with more general learning from the customer-focused work that we do as CSE's Household Energy Services team.
In late July, DECC released a consultation document, inviting views on a number of amendments to the ECO Order 2012. These changes suggest an evolution of ECO which is positive and attempts to counter some situations which would restrict consumer access to assistance. You can find the consultation here – the deadline for responses was 16 September.
The main proposals are:
- Removing the specific reference to achieving a U-value of 0.3 or less for solid wall insulation and instead requiring installers to comply with the Building Regulations as appropriate. This allows for lower standards in certain situations – such as where a system might unacceptably reduce the internal floor area or headroom, create unacceptable problems with adjoining floor levels, increase the risk of damp or mould, and if technically unfeasible. Solid wall insulation is a complex installation, so for the very small number of householders to whom this will apply, it’s a sensible and proportionate response.
- Changing the Affordable Warmth criteria (from April 2014) to include recipients of Universal Credit in a way which mirrors as closely as possible the current system. The consultation proposes to use the additional elements within Universal Credit that identifies claimants as having limited capability for work and work related activity or with children. Although the roll-out of Universal Credit is expected to be slow, we are pleased to see this is being amended. It is already difficult to find Affordable Warmth eligible householders, so including Universal Credit recipients in the criteria early on is important.
- Changing the scoring for glazing, no longer limiting it to the savings that go beyond technical standards. This will make glazing more viable as a secondary measure under CERO (and as a CSCO and HHCRO eligible measure). For properties with inefficient existing glazing, and who may be thinking of upgrading, it is much easier to do this in conjunction with the internal and/or external wall insulation. This proposal has the potential to make this package of improvements more financially viable for householders.
We recently launched our first true ECO scheme, Energy@Home Starter, which focuses on the Home Heating Cost Reduction Obligation (HHCRO, sometimes called Affordable Warmth) and the Carbon Saving Communities obligation (CSCo). Last week we received our second application to the scheme via our Home Energy Team advice line. The customer was over 80 years old and in receipt of Pension Credit, therefore HHCRO eligible. She was looking to replace her old, inefficient boiler.
As with all HHCRO eligible applicants, we are required to perform a Land Registry check to make sure the customer is the owner of the property. The result came in showing that no information was available through Land Registry. This may be because there wasn’t an accessible record for registration or because the property purchase was completed before 1990 when registration was made compulsory. Either way, when the job is submitted, proof of householder status must be recorded in order for it to be ECO compliant. In this case we wouldn’t be able to provide the required evidence unless the customer could provide either:
- Freeholder title deeds, or
- An annual mortgage statement
The customer explained that she had paid off her mortgage a number of years ago and therefore has no annual mortgage statement to provide. She is also unsure if she has the title deeds in her home, so she would need to contact her solicitor and this will more than likely involve a fee. Finally, the customer feels uncomfortable with providing the title deeds documentation to a managing agent (CSE) she has not heard of before, which is completely understandable. We confirmed with our funders that there would be no exceptions to the requirement of this information, which means the customer has no choice but to find her title deeds or pay a solicitor to provide a copy.
This situation is likely to cause issues with customers who live in one of the 20% of properties in England and Wales that are not registered (or where there is no registration information available), who own their property outright and therefore don’t have a mortgage statement, or are unable to access the necessary paperwork.
This confirms to us just how overcomplicated the Energy Company Obligation can be for the most vulnerable customers (those qualifying under the HHCRO) as they suffer the burden of this unnecessary administration. Asking vulnerable customers for paperwork or information that isn’t easily accessible takes them one step closer to dropping out of a scheme. Not to mention that all this is likely to happen before an assessment has even taken place, before an application form has been completed, before quotes from installers have been obtained and certainly before an installation has been completed.
On 17 July, Ofgem released its response to the consultation on how to account for the percentage of a measure installed (known as ‘P’), when calculating ECO scores. Their decision in brief is to remove ‘P’ from the formulae used to calculate ECO scores. Suppliers can use other methods to calculate the scores for partial insulation as long as they meet the U-value calculation requirements of SAP/RdSAP. Their decision and the summary of responses (16 in total) can be found here.
From a scheme delivery perspective, we are disappointed in the decision they've made as we feel that this change will add additional cost, time and complication to what is already an extremely complex and challenging policy to implement on the ground. We believe there's a real risk that this will further stifle activity, particularly within the Carbon element of ECO (which aims to deliver solid wall insulation and hard-to-treat cavity wall insulation), and that ultimately this will be to the detriment of the offers available to householders.
Nevertheless, we'll carry on. We will look for ways to implement this change and tackle the other hurdles that still exist within ECO (such as the hybrid wall insulation issue). The practical learning gleaned from pilots such as the Bristol Home Energy Upgrade (which demonstrated high demand from householders for both proportional installs and hybrid wall insulation systems), and a new Carbon Saving Communities project in Bath & North East Somerset, will be invaluable in our efforts to find a solution to these challenges.
At the end of May we reported on the ongoing uncertainty surrounding ECO scoring (i.e the carbon and fuel bill saving calculations for the Energy Company Obligation element of the Green Deal). Further detail about the specific concerns we have can be seen in the consultation response which we submitted on 20 June 2013.
The Bristol Home Energy Upgrade project finished on 24 May 2013, as the last solid wall insulation completion certificates were received. For an overview of the project, including final stats, see www.cse.org.uk/bheu.
Although the deadline has passed and householders are now enjoying their new heating systems or insulation, we haven’t been idle. Bristol City Council commissioned CSE to evaluate the project in full (over two stages) and we submitted the stage one final report on 14 June 2013 to coincide with Bristol’s Big Green Week - a great time to showcase some of the work going on across the city in the field of energy efficiency.
The report looks at every aspect of the project, including what worked well and what didn’t from a householder perspective, an analysis of the Green Deal and Energy Company Obligation (ECO), what role community groups played, how schemes like this could be effectively marketed, and an analysis of pay-as-you-save finance (a key part of the Green Deal).
We haven’t quite finished yet either, as we plan to publish stage 2 of the report over the next month or so. This will focus on an analysis of more detailed installation data including mapping the distribution of applications across the city and an analysis of housing types. We will also be undertaking an analysis of the installers and supply chain. We're going additional research, which we'll publish as a separate report, to understand why some householders withdrew from the project.
Have a look at the report below.
- An experience of external solid wall insulation 1
- An experience of external solid wall insulation 2
- An experience of external solid wall insulation 3
- An experience of able to pay boiler upgrade
- An overview of Affordable Warmth
Installation data summary in graphical form
As we covered back in March, Ofgem released their final guidance for suppliers on the Energy Company Obligation (ECO). Just over two months later, on 23 May, a further consultation was released which proposes to change the way that ECO scoring accounts for the percentage of a measure installed.
This may sound like a minor detail, but it’s actually quite far reaching when you bear in mind that a large chunk of ECO aims to support the installation of solid wall insulation, and that it’s not always possible to insulate an entire property. The original guidance did have a mechanism for taking this into account in an attempt to ensure that the score more accurately reflects the savings realised by the measure.
However, the new consultation proposes to change this and instead require those administering ECO to calculate the percentage installed within SAP or RdSAP. The consultation itself states that ‘this can be complex, in particular for wall insulation where there is more than one wall type. In these cases the assessor is required to account for the alternative walls and extensions within the SAP/RdSAP calculation to accurately model the achieved savings.’
This is just another example of the challenges we face in getting ECO off the ground, and we’ll be considering the impact of this added complexity on our work should it go ahead.
The deadline for responses to the consultation is Thursday 20 June.
News just in from DECC - over 18,000 assessments have now been lodged and are in the hands of consumers across the country. To prevent a mad dash to the recycle bin, we need to engage with the public to help them understand how to best to proceed with making those important energy saving improvement decisions.
Projects like the DECC-funded, CSE-managed Our Green Deal in Somerset helped to generate interest in the Green Deal.