The Green Deal challenge
Energy efficiency needs to be at the heart of UK energy policy if the country is going to meet the ambitious targets the Government has set for carbon reduction Angela Knight said in a letter to climate change minister Greg Barker today.
She highlighted the need to get new Government energy efficiency schemes working well and set out the key challenges which Energy UK’s recent series of Green Deal and ECO roadshows identified.
The key points are:
- Government has the data on who are the households that are fuel poor. Sharing that data will radically reduce the time taken to find this group and to improve their homes.
- Solving operational challenges of the new processes and procedures of some in the food chain and which are taking time to come on stream
- Simplification of the schemes and rules
- Consumer Credit Act issues
- People want to see what solid wall insulation looks like before committing
- Awareness of the schemes needs to be raised
- Communication should be government led
Energy UK chief executive Angela Knight said:
“Energy efficiency schemes must work well for people to want to get involved with them. Problems with Green Deal and ECO need to be ironed out quickly for them to be in the best interests of customers, so they can take cut their energy use and have warmer, more comfortable homes. The new schemes are still bedding down and the work Energy UK has been doing, with support and involvement from the Department for Energy and Climate Change, highlights a number of areas where improvements can be made and lessons can be learned.”
The Energy UK events discussed issues of concern to those on the ground, delivering Green Deal and ECO . They brought together local authorities, housing associations, Green Deal assessors and providers, installers of energy efficiency measures and community groups, with representatives from DECC, Ofgem, GDFC as well as energy suppliers.
Text of the letter
In the full text of the letter Energy UK said:
The Government policy on energy and climate change will result in significant investment in new and greener power generation and distribution, and corresponding substantial job creation. This will need to be balanced against affordability and, particularly, the protection of poorer and more vulnerable consumers. To do this effectively puts energy efficiency at the heart of the UK energy policy, with the Government’s Green Deal and Energy Company Obligation [ECO] schemes having the valuable aims of reducing carbon emissions to meet the ambitious targets set by Government for carbon reduction, and helping customers by keeping homes warmer. However, these are new schemes - their design is complex and the guidance complicated - and, therefore require time to bed down and for all the various participants to understand what is required.
To assist with the process of publicising and explaining these schemes, Energy UK, with support from DECC, organised road shows in a number of towns and cities around the country. These events brought together as intended, local authorities, housing associations, Green Deal assessors and providers, installers of energy efficiency measures and community groups, with representatives from DECC, Ofgem, GDFC and the energy suppliers. They were well attended and there is clearly a lot of interest from the supply chain in making them work. The discussions covered the issues of concern to those on the ground, delivering Green Deal and ECO.
We will be publishing a detailed report about the events shortly, which will include recommendations about how the schemes can operate more effectively. These recommendations will predominately address the detail of ECO and of Green Deal, listing what needs to work better or what changes are required, for the schemes to operate as intended.
In summary, the key issues raised by participants included:
- Finding the fuel poor: Data sharing is the quickest and most certain way of identifying the fuel poor and vulnerable customers is by sharing data held by DWP. Government should take the responsibility for being the critical partner in identifying the relevant households and sharing the data so action can be taken;
- Operational challenges: There are a variety of operational challenges which require resolving as they are, or have the potential to, hold up significant parts of the programme. These would appear to be caused mainly by software problems in the supply chain development and property ownership - where some are owned and some are rented;
- Simplification: Local authorities, housing associations and other partners key to delivering these schemes, particularly ECO, are seeking significant simplification of both legislation and regulation; for example, clearer, less technical, guidance is required or more flexibility around measures installed;
- Consumer Credit Act: There remain a number of CCA issues relating to key segments of the market, preventing confidence in lending;
- Solid wall insulation is proving to be the most challenging measure to deliver as customers want to see what it looks like before proceeding and concerns about the degree of disruption and planning issues often arise.
- Awareness: The public remains largely unaware of the Energy Company Obligation or Green Deal. For these programmes to be successful, Government needs to play a much more upfront role in their promotion as in addition this will provide more confidence and certainty to consumers; and
- Communication: Effective communication about Green Deal and ECO needs to be upfront and honest to build trust with consumers and, critically, to manage expectations.
We also note that, despite the initial burst of publicity and the cash back scheme, the public is mostly unaware or uncertain about these schemes. In particular, they are unclear as to the detail and seek necessary assurance to participate and that assurance must have the underpinning of Government.
Our findings also emphasise that any changes to the existing Energy Company Obligations and/or any future energy efficiency obligations should build on the lessons learnt. Schemes should be simpler; should give greater certainty to the supply chain; should be clear on costs; and should operate on a longer time frame.
Energy UK is committed to continuing to work with all parties to ensure that energy efficiency is delivered in a cost efficient and equitable manner and that it clearly benefits the consumer. We will also continue to feed back to Government and the Regulator about the impact of both the legislation and administrative rules of the programmes so necessary changes to the schemes can be made, as required, allowing more consumers than would otherwise be the case to get help - and with the minimum disruption.
We trust that this summary of the events, and the upcoming full report, will be used by the relevant authorities to ease the delivery of both schemes. I know the focus is often on more eye catching areas, but warmer homes and cutting energy waste through the successful implementation of ECO and Green Deal are vital. We look forward to discussing this with you next month.
Notes for editors
- Contact Energy UK Press Office on 020 7747 2941
- Out of Hours: Lesley McLeod on 07500 707 327