Transcript Slide 1

RETROFITTING HOUSING: How will
the Green Deal impact on domestic
energy efficiency plans?
Tony Reeves, chief executive, Bradford City Council (chair)
Siobonne Brewster, strategic development director, Carillion
Energy Services
Ruth Abbott, head of housing standards, City of York Council
George Munson, energy and climate change manager, Leeds
City Council
Catherine Monaghan, head of North of England, Energy
Saving Trust
Green Deal and Energy Company
Obligation
Retrofitting Housing
Siobonne Brewster
Strategic Development Director
Summary
Green Deal
•
The Green Deal is the Government’s
flagship policy for achieving low impact
housing in existing stock and, as a result,
the targets set by the Climate Change Act.
•
A financing framework will enable the
provision of energy efficiency measures to
all householders, collected by a charge on
energy bills in order to avoid paying upfront
costs or making this a smaller amount. This
framework will also extend to non domestic
buildings.
Energy Company Obligation (ECO)
•
4
ECO replaces CERT, CESP & Warm Front
and alongside Green Deal will additional
provide support to vulnerable groups and
hard to treat housing.
Delivery
• Whilst some measures will be funded solely by Green Deal finance and some under the
ECO, the Government expect the majority of households to receive packages of measures
jointly funded by a mix of the two funding streams seamlessly.
• A market based solution is proposed to help energy suppliers make a significant
proportion of their ECO subsidy fairly available to those Green Deal Providers who can
commit to delivering in a cost effective way. The Government believes the role of local
authorities and other local partners is also likely to be crucial in ensuring effective and
intensive delivery of the ECO and Green Deal in particular areas.
5
What is Green Deal?
• The Green Deal (GD) is a financing mechanism available to those
who wish to install energy efficiency/ carbon reduction measures in
their homes and don’t wish to pay the full amount upfront.
• Measures are repaid through the energy savings on the electricity bill,
but unlike a traditional loan, the GD charge is attached to the house,
not the individual..
• Only approved measures by accredited installers following accredited
assessment can be installed and financed through GD.
• At the heart of the Green Deal Policy is the “Golden Rule”, which
determines how much finance can be borrowed. It operates on the
principle that the total amount borrowed via the Green Deal Finance
mechanism must be less than or equal to the expected savings made
on the energy bill. Savings will not be guaranteed, as fluctuating
energy prices or behaviour changes can not be controlled however
the Golden Rule is there to offer a basic level of protection for
consumers”.
6
What is ECO?
• Energy Company Obligation (ECO) is an obligation on the
energy suppliers to support household energy efficiency.
• It is estimated that ECO will create a market of £1.3 billion pa in
the delivery of energy efficiency improvements to vulnerable
householders as well as being used to supplement the financed
delivery of solid wall insulation to hard-to-treat properties.
• The £1.3bn funding pot will be financed via a levy on consumers
energy bills and divided between the three targets below:
• The targets within ECO are:
7
•
Carbon Saving
•
Carbon Saving Communities
•
Affordable Warmth
Energy Company Obligation
Affordable
•
Private tenure -£350m pa on tackling fuel poverty.
•
Criteria – Benefit checked – as in consultation (similar to SPG) and now added Working tax
credit <£16k if has a child or disability and now with children up to 16 or 18 in in fte. DECC
estimate 2.9 million households.
•
This is important for us with our affinity partners and making Green Deal work. (This was
previously only a 25% share).
•
Measures – cavity wall and loft insulation alongside any measure that improve ability to heat
home (space or water) against SAP. Boiler replacement permitted where not working, not
working to full efficiency and not economic to repair – awarded full score (assume secondary
heating no boiler under SAP). Boiler repairs permitted (A and B) up t0 5% of total compliance
provided with aftercare for boiler – 1 -2 years, score based on 1/12 or 2/12 pf full boiler
score. Replacement of working boilers permitted but will score low so not likely to be
competitive
•
Referrals through independent body
•
Available to Private
•
£190m pa to help low income households install). Includes access for Social landlords but will
still excludes them from the affordable warmth pot.
•
Criteria – 15% IMD (multi depravation index) soft boundaries and looking at rural areas. List of
areas will be published. population under 10,000 also must be in receipt of AW qualifying
benefits
•
Measures – loft, cavity and other insulation (270,000 fuel poor households). Aims to increase
support for fuel poor, drive more cavity, loft insulation alongside GD, promote and area based
approach
•
•
£760m. Solid Wall and Hard to Treat Properties
SW or hard to treat cavity can be packaged with other measures – that prevent heat loss from
homes (and district heating)
Warmth
Carbon
Savings
Comm’ty
Carbon
Reduction
8
Size of Potential Markets
• 27 million homes have significant potential for energy efficiency
installations
• Current activity pre Green Deal is approx 25,000 installations (mostly
large projects in social housing)
• Some measures will decrease as CERT and CESP close
• Estimate believe that 3 million homes will benefit from Green Deal
requiring almost 6 million measures over the period to 2020
• Average funding for Green Deal thought to be in the region of £2,600
with the average total cost being approx £6,900
• It is projected that the following products will be the most popular in
order:
1. Heating controls
2. Loft installation (>60mm to 270mm)
3. Draught proofing
4. Double glazing
5. Cavity wall (easy)
9
What do we already know?
Qualitative Focus Groups have been conducted
showing customer views:
Key
Findings
• Energy Savings – for the majority this about saving money not energy saving
• Green Deal as a concept - relatively positive but there were some reservations
and it is a complex proposition
• Financial concerns – increasingly sceptical of “deals” maximum spend;
interest rates
“Scepticism, because I’m
one of these that believes
you get nothing for
nothing. If it’s the
government advertising
this, it’s gonna cost you!”
• Trust issues – scepticism – just more of the same
• What happens on event change – technology changes or you move house
• Triggers – free assessment; cash incentive
• Knowledge – what measures are consumers comfortable with?
• Credible Providers – energy suppliers, DIY stores, supermarkets government
backing
“I’m into anything saving
energy… I’m not worried
about the planet, I’m more
interested in my pocket
actually!”
10
Green Deal Key Challenges
“Give us all the information
clearly – ideally something
you can keep like the
digital switchover
booklets”
Business View
• Business and investor confidence
• Volumes to support this investment
• Energy Company Obligation – clarity and a smooth transition
• Finance
• Customer understanding and engagement
Consumer View
“If there are lots of names you
could get schemes that aren’t
what they seem”
• Government backed message versus solely market driven message
• Many consumers are sceptical of deals, green and loans even if not a loan!
• A positive experience and clear benefit
• Easy and little disruption
• Complex survey and measure challenges
11
“It’s got to be advertised
for people to be confident”
What is needed?
• A mixed approach to the market – through LA, RSL, brand names
including energy companies
• Low cost, secure finance.
• Organisations need confidence to enter the market.
• Homeowners need a clear, reliable and confidence building experience.
• Community Engagement – who would you listen to?
• A mixed supply chain approach building on a number of different routes
between the finance, the customer and the installation. Trusted local
tradesman, community groups, larger city led schemes, larger
organisations all working together.
• An understanding and commitment to energy efficiency and combating
fuel poverty by us all.
12
Green Deal Opportunities
• A new approach to funding energy efficiency – No or little upfront costs
• The appeal of the “loan” remaining with the property
• New players coming into the market – creating new energy and
competition
• Increasing energy prices and understanding of climate change issues
• Regulatory drivers – more stick if needed
• A real challenge but also a chance to do more.
13
Any questions?
Thank you for your time
Contact details:
Siobonne Brewster
Strategic Development Director
Carillion Energy Services
Email: [email protected]
Mobile: 07508 766 025
14
Ruth Abbott
Housing Standards and Adaptations Manager
37% of York’s carbon
York's Carbon Dioxide Emissions
in 2009
Emissions come from the
Domestic sector.
 This equates to approx.
400,000 tonnes of Carbon
(enough to fill 200,000 double
deckers)

Road
Transport Kt
CO2
26%
Domestic Kt
CO2
37%
Industry and
Commercial
37%
Overview of City Climate Change related Policies
 Climate Change Framework & Action Plan
◦ 40% reduction by 2020 and 80% by 2050 (linked to CC
Act 2008, EU and Friends of Earth)
◦ Modelled to understand key areas to focus on
◦ 10 themes - including creating sustainable homes
◦ Linked to Private Housing Strategy but also focuses on
h/h advice, general awareness, community campaigns
– Green Neighbourhood Challenge, sustainable design
and construction, microgeneration promotions
◦ www.http://www.york.gov.uk/environment/sustainability/climatechange/2fram
ework/

Council Priorities
Protecting the environment, building stronger
communities and Create Jobs and Grow the
Economy.

York Housing Strategy
Aim 4 To improve the condition, energy
efficiency and suitability of existing homes and
create attractive, sustainable neighbourhoods.

Private Sector Renewal Strategy
Aim 6 Create sustainable homes and reduce
carbon emissions from the domestic sector




Range of grants in the past aimed at the
Private Sector – some based on eligibility
others targeted on an area basis
Wrapping up York – extended until 31st
December 2012 – free loft and cavity wall
insulation funded under CERT
CESP funded scheme in the Hull Road area
–only eligible area in the city – whole house
approach helped by an LCR bid
Work with LCR through the DEEP project
Work with the LCR
Go Early Pilots – solid wall pilot in three areas of
York
Development of the business case which seeks a
longer term solution maximising The Carbon
Saving Obligation of ECO and helping residents
access the Green Deal. ( initially a 3 year plan )
In the meantime
Look at ways of maximising the two elements of
ECO especially the Affordable Warmth element
from day one but also the Carbon Savings
Communities Obligation






Focuses on the hard to treat (solid wall
insulation )
Fostering good relationship with community
groups- effective resident engagement
Cross department engagement
(planning/highways/housing/sustainability)
Draw down on ECO subsidy if available but
top up with an interest free loan.
Establish a network of assessors and
contractors



We will target three areas in York
predominately in the private sector – both
traditional and non traditional construction
types.
There are about 500 homes in the area but
we are aware seeking to improve up to 50
homes.
Main concern at the moment is the delay
around ECO
•
•
HECA retained (in England) and revitalised
HECA ‘s New guidance issued in July –
emphasised that councils should play a
strategic and enabling role to deliver green
deal – You can’t ignore it !
The Green Deal
and Leeds
Contents…
□ Leeds City Region DEEP
□ Current energy efficiency priorities in Leeds
□ Green Deal & ECO
 Challenges and opportunities
 LCR possible partnership
□ Conclusions and discussion points
LCR DEEP
□ Statement of intent
LCR has ambitious energy efficiency plans
□ Series of principles
 Long-term private/public partnerships
 Whole-house approach to energy efficiency
 LA brand and standards, private sector delivery
 Open up market to SMEs - significant job creation
□ Practical projects already underway…
□29
Green Deal & ECO:
challenges & opportunities
□ Managing the transition from grants to loans
□ Securing a good deal for low income and fuel
poor residents
□ Maximising the local economic benefit
□ Right approaches to new niche markets…
LCR DEEP
Frameworks and
partnerships
For Green Deal delivery
Green Deal
Local Authority Operating Model
PWLB
LAs
Non-recourse
finance
Buffer
capital
Banks
SPV
EIB
Hard to treat
subsidy
Delivery Partner
Contract
Marketing
Contract
Green Deal
+ FIT
payments
Installation
companies
PV Meter/deemed
Install and manage
Finance
Payments
Other
Energy
Companies
Green Deal Payments
Benefits
36
Further analysis produced an
accessible market for retrofit – LCR
Number of houses (‘000)
1,400
1,200
206
1,000
207
79
800
14
□£560
37
m1
600
88
43
1,252
□577
Other
Fuel
Poor(2)
115
□£2.3bn
□market
□size
400
200
462
LCR Total
Cavities done
Housing Stock
Cavity Wall
Laggards¹
Dwellings in
Cons. Areas
(90%)
Listed
Dwellings
New Build (Post Back to back
Affordable
1995)
(90%)
Warmth Eligible
Accessible
Notes
¹ Estimate of those unlikely to take up cavity wall insulation based on poor take up under free schemes (estimate 50% of outstanding
cavity only)
² Those in Fuel Poverty may not achieve the Golden Rule and therefore may not be eligible for Green Deal without heavy or full subsidy
3
Conclusion and discussion
GD & ECO = fundamental change to
established energy efficiency and fuel
poverty approaches
□ Do nothing not an option
□ Tough, but there will be a market
□ Real ambition will give many advantages
 Ability to attract ECO funding
 Ability to generate local jobs
 Long-term energy and carbon savings