Heat strategy for Wales | GOV.WALES

Closing Date: 8 November 2023
Response submitted by: National Insulation Association
For more information, please contact: info@nia-uk.org

About the National Insulation Association

The National Insulation Association (NIA) represents the insulation industry in the UK with a member base comprised of installers, system certificate holders, and manufacturers who provide a wide range of insulation solutions for homes and buildings. The NIA and its members are fully committed to maintaining and raising standards within the insulation industry.

Yes, we agree with the Welsh Government’s vision.

Yes, we agree with the six areas identified by the Welsh Government.

Yes, PAS 2035/2030 standards are crucial to ensure a high-quality, whole-building approach to retrofit. The NIA is committed to maintaining and improving quality across the insulation sector so that the true benefits of the installed measures are realised, and the customer and their home are fully protected at all times. We believe that PAS 2035/2030 is a helpful standard which promotes high-quality retrofit and reduces the risk of retrofit projects. Hence, we welcome the plans set out by the Welsh Government to use PAS 2035/2030 standards in all of its retrofit programmes.

PAS 2035/2030 is an industry-led quality standard that provides best practice for retrofit, taking a whole house approach. This provides customers with confidence in the work being carried out, and also prevents poor delivery of measures and costly damage to properties. New PAS standards were brought in after the Each Homes Counts review to safeguard against the damaging consequences of sub-standard installations. Since then, they have been instrumental in improving the quality of installation and customer service across the industry. PAS 2035/2030 focusses on a fabric first approach to home decarbonisation which prioritises vital insulation upgrades as a first step to whole house decarbonisation. It puts whole house retrofit at its heart and sets out a clear platform for sensible, logical retrofit.

Nonetheless, even with the recent revisions which should make the PAS process more streamlined, we recognise that PAS compliance can be costly, especially for small businesses. Therefore, it is important that the Welsh Government supports businesses with these costs and helps them to carry out high-quality, PAS-compliant retrofit. This could include providing more funding within its programmes to cover the costs of PAS compliance. Training and qualifications are another vital element of the PAS framework; hence it is important that the Welsh Government provides support for local businesses so that they are adequately skilled and qualified to carry out PAS-compliant retrofit projects. By providing more support to businesses working towards PAS compliance, this will enable PAS-compliant retrofits to become commonplace across Wales.

Yes, we agree that the Welsh Government has a key role to play in supporting the development of the necessary skills for heat decarbonisation. Modelling carried out by the Construction Industry Training Board (CITB) suggests that an additional 12,000 full-time equivalent (FTE) construction jobs will be required in Wales by 2028, the majority to deliver improvements to reduce energy demand in existing buildings. This represents both a challenge and an opportunity for Wales. The retrofit sector in Wales, and the insulation sector more specifically, will need to attract and train new entrants to deliver the volume of installs required to meet net zero. It will also require large-scale training and upskilling of the existing workforce. Retrofit training will demand significant investment from devolved government. Therefore, the NIA would like to see the Welsh Government work with retrofit employers and training providers to widen the provision of retrofit training across the country. This could involve helping employers and training providers to offer subsidised training courses, particularly for roles where there is a shortage, such as Retrofit Coordinators and Retrofit Assessors.

We are pleased to see that the Welsh Government is committed to exploring opportunities for early years and young people to enter the heat decarbonisation sector. There is a clear need for this – according to research by the recruitment brand Reed, current rates of retrofit recruitment will need to triple if Wales and the rest of the UK are to meet our shared net zero 2050 target.1 It is important that industry and government to work together to attract new entrants into the sector. This is something that the NIA is keen to support the Welsh Government with.

The Welsh Government has a key role to play in support the development of the necessary skills for heat decarbonisation in Wales. Targeted investment in retrofit skills will have the added benefit of creating thousands of high-quality and sustainable jobs in communities across Wales. A report published in 2021 by the Future Generations Commissioner for Wales estimated that 26,500 new jobs could be created by 2030 as part of a long-term strategy to decarbonise housing in Wales. The localised nature of most energy efficiency work means that many of these jobs will be created locally within Wales. Hence, Wales can retain the job and growth opportunities offered by the net zero transition.

Yes, we agree with the Welsh Government’s plans to rebalance the levies on electricity bills. This is essential to kickstart the transition to low-carbon heat and make sure that it is affordable for consumers.

However, the Welsh Government should also prioritise increased investment in insulation measures as the most effective way to fairly distribute the costs of the transition to low carbon heat. Insulation can significantly decrease the heat demand of a property and cut heating costs. According to research by the Energy & Climate Intelligence Unit, raising the EPC of a property by one SAP band from D to C can reduce space heating demand by 20%.2 Insulation is the most effective way to make home heating affordable because it reduces energy demand and energy bills.

Taking a fabric-first approach is especially important when it comes to the installation of low-carbon heating systems, such as heat pumps. Heat pump efficiency is dependent on the flow temperature at which it operates, running at higher efficiencies when the flow temperature is lower. However, a property can only be adequately heated at low flow temperatures if it has a high thermal efficiency. Therefore, the installation of fabric efficiency measures prior to, or alongside, heat pump installation means a smaller, cheaper heat pump can be installed which will then operate at higher efficiencies over its system lifetime. If low-carbon heating is installed and then insulation added afterwards, consumers may be left with a heating system that is not proportionate with the property’s reduced space heating demand and therefore has capital and running costs that are unnecessarily high. It is vital that properties are as insulated as much possible before installing low-carbon heating systems to ensure they are sized correctly and cost less to run.

The most effective way to ensure that the public can afford the switch to decarbonised heating is by following a fabric-first approach. Insulation will safeguard consumers from increased heating costs, thereby ensuring a just transition to low-carbon heat, especially for those vulnerable groups most at risk of falling into fuel poverty due to energy bill increases.

Yes, the NIA agree that stronger regulation can support uptake of low carbon heat and energy efficiency measures. This is particularly true for Minimum Energy Efficiency Standards (MEES) which require homes to be above a certain EPC. Having higher MEES will encourage more homeowners to invest in the energy efficiency of their properties. MEES are an integral part of improving conditions in the Private Rented Sector whereby tenants are reliant on landlords to invest in energy efficiency measures that will reduce their energy bills and improve their thermal comfort. The UK Government had proposed several amendments to MEES in its 2020 consultation on ‘Improving the energy performance of privately rented homes’. Although it has since abandoned these commitments, as signalled by the Prime Minister’s speech in September 2023, the NIA would like to see the Welsh Government commit to adopting these proposals in Wales. These would improve energy efficiency standards in the private rented sector and improve thermal comfort for private tenants. These proposals include:

• The minimum EPC rating increasing from an E to a C, which would require investments to be made to reach the standard before a property can be rented out. EPC C would need to be reached by 2025 for new tenancies and 2028 for existing tenancies.
• The increase in the cost cap from £3,000 to £10,000 per property, which would allow for investment into measures that have a real impact on the thermal comfort of the property.
• The integration of the fabric first approach, which requires investment in the fabric of the building (lost, cavity or external wall insulation, double windows and doors) prior to other improvements such as heating system upgrades.

Most regulations and targets in the energy efficiency sector are based on EPCs. These underpin our understanding of the efficiency of properties in the UK therefore, they need to be as accurate as possible. The NIA believe that important reforms to EPCs are needed to ensure that households get reliable advice on how to improve their properties. We would support the introduction of similar EPC reforms to the ones currently being proposed by the Scottish Government. These proposed reforms include:

• A separate fabric rating alongside existing metrics to draw attention to the energy efficiency of the property specifically. This supports the fabric first approach.
• A metric for the type of heating system in the property. This will support the transition to low carbon heat as it will highlight the carbon intensity of the heating system as well as the running costs. This enables informed decision making for consumers as we transition towards net zero.
• Improving the explanation of the recommendations given to the consumer to ensure they understand why measures have been suggested and what benefit they offer.

By introducing similar reforms, the Welsh Government could ensure that EPCs more effectively support Wales’ heat decarbonisation pathway by incentivising investment in low carbon heating systems and energy efficiency measures.

Along with this, it will be important for government schemes to target the worst performing or hardest to treat homes first as they may incur the highest cost to the homeowner and be the most dangerous to live in. The effects of exposure to cold homes include poor mental and physical health due to inadequate indoor air temperatures (too cold or too hot), high humidity levels which can lead to mould, high noise and poor air quality. It is estimated that the NHS spend over £540 million each year treating people affected by living in the worst performing properties in England. However, this is a solvable problem, the BRE Group in its’ 2023 report on the Cost of Poor Housing in England by Tenure estimated that of the homes in the PRS experiencing excess cold the average cost to mitigate this is £6,835, which if the MEES reforms were actioned would be under the maximum spend for landlords of £10,000. There are similar average mitigation costs for excess cold across owner occupiers (£6,690) and social homes £3,800). The NIA believe that the worst performing homes need to be supported to improve across all housing tenures and no household should suffer with the effects of poorly performing homes.

Yes, a holistic approach to fuel poverty which simultaneously supports both energy efficiency improvements and the transition to low carbon heat is crucial. This should revolve around a whole-house, fabric-first approach to heat decarbonisation.

When upgrading or decarbonising a property’s heating system, it is important to assess and upgrade (where necessary) the property’s energy efficiency. As discussed in our response to Question 8, improving a property’s fabric performance will facilitate the installation of a more efficient and cost-effective heating system, thus making the transition to low-carbon heat smoother and more affordable for residents.

A holistic, fabric-first approach is particularly important when it comes to those in fuel poverty, as it ensures that the transition to low carbon heat is affordable. Taking a whole house approach that installs insulation improvements in conjunction with a low carbon heating system will make sure that those in fuel poverty will not see any increase in their heating costs when they transition to a low carbon heating system. As such, a holistic fabric first approach to heat decarbonisation is the best way to ensure that the transition does not place a cost burden on fuel poor households.

Yes, we would welcome demonstration projects for historic and traditional building retrofit. These buildings are often avoided as they are perceived as too difficult to retrofit, however this means that they are excluded from the benefits of energy efficiency measures. There is also a significant skills and knowledge gap when it comes to retrofitting traditional and historic buildings. The Retrofit Academy have recently released a new qualification targeted at historic and traditional buildings which is a good step towards addressing this skills gap. The introduction of demonstration projects would be another very useful step as they would encourage new, innovative approaches and the sharing of best practice around hard to treat buildings.

It can be very difficult to get planning permission for retrofit projects on historic and traditional buildings. Thus, it is important that the Welsh Government adopts a joined up approach to retrofitting them which involves Local Authority planning departments in the process. This should help to streamline the process for retrofitting historic and traditional buildings and also make sure that retrofits are compliant with all the requisite planning requirements.

Yes, we agree that this is a sensible approach.

Energy Performance Certificate reform consultation – Scottish Government consultations – Citizen Space Closing Date: 16 October 2023

Response submitted by: National Insulation Association
For more information, please contact: info@nia-uk.org

About the National Insulation Association
The National Insulation Association (NIA) represents the insulation industry in Scotland and across the UK with a member base comprised of installers, system certificate holders, and manufacturers who provide a wide range of insulation solutions for homes and buildings. The NIA and its members are fully committed to maintaining and raising standards within the insulation industry.

The NIA agrees with the set of metrics that the Scottish Government proposes to display on the reformed EPC.

The new set of metrics support the need to reduce direct heating emissions, the need to lower residents’ energy bills and tackle fuel poverty, and the need to ensure that the building fabric is as efficient as possible. The proposals provide consumers with a more detailed information breakdown on the performance of different aspects of their home, which will help them to make informed decisions about the best route to improving the energy efficiency of their homes.

It is encouraging to see a separate fabric rating included as one of the headline metrics. A fabric first approach is industry best practice when it comes to whole-house retrofit. It also helps to make the transition to low carbon heat as affordable as possible for consumers. Therefore, it is critically important that the fabric efficiency of homes is clearly displayed on EPCs. This will give consumers a clear of idea of their property’s current fabric performance and how this can be improved, as well as highlighting the importance of adequate insulation to residents. The inclusion and adding weighting given to fabric efficiency on EPCs should help to facilitate muchneeded insulation upgrades to Scottish homes.

The inclusion of a metric for heating system type is also welcome. This means EPCs will more effectively support the transition to low carbon heat. There is very little incentive to install low carbon heating systems within the current EPC framework. Since the EER on current EPCs is based on modelled running costs, cheaper heating systems receive a better rating, regardless of their carbon emissions. Hence, changing EPCs to better incentivise low carbon heating measures, such as heat pumps, is vital if they are to be fit for a net zero future.

No, we agree with the metrics included.

No, the NIA does not think that the Fabric Rating should include hot water heat demand. This risks making the metric more complex and potentially confusing for consumers. It could also dilute the focus on fabric measures.

The rationale for including a fabric rating metric is to give residents a clear idea of how well insulated their home is and to drive insulation improvements. By including hot water heat demand (a non-fabric factor), this could detract from the metric’s primary goal – to improve fabric efficiency. While we recognise the importance of limiting heat loss from hot water systems through measures such as insulating the hot water cylinder, it is vital that the fabric rating is not influenced by nonfabric elements, such as type of hot water system. This would detract from the overall efficacy of the fabric rating.

As current policy commitments and targets are based upon EER bands (in particular Band C), the new fabric rating scale should be aligned with the current EER rating system. This is important to allow for continuity and consistency between different versions of EPCs. It will minimise any confusion that might be caused for businesses and consumers by changes to the EPC framework.

Yes, we agree with this proposal. Including unambiguous information about the dwelling’s specific energy efficiency features should give residents much-needed clarity. This should help them understand the current fabric performance of their home and allow them to make informed decisions about which measures to take in order to upgrade the property’s energy efficiency.

No, we believe that non-domestic EPCs should also include fabric rating as an additional headline metric, as is being proposed for domestic EPCs.

A fabric first approach is the most effective method to carry out whole-building retrofit. This is true regardless of the building’s use. A high level of thermal efficiency is equally important for non-domestic buildings as it is for domestic ones. Adequate insulation could save businesses a significant amount of money on their overhead costs, especially with energy bills at their current high level. Therefore, fabric rating should be clearly displayed on non-domestic EPCs so that building owners are fully aware of their building’s fabric efficiency and what steps they can take to improve it.

The fabric efficiency of non-domestic buildings is also important to ensure that they have a correctly sized heating system. This is particularly important when buildings are installing a new low carbon heating system. For instance, If a heat pump is installed followed by insulation, the building’s heating system output may not be proportionate with its reduced space heating demand and therefore have capital and running costs that are unnecessarily high. The installation of fabric efficiency measures prior to, or alongside, the installation of a low carbon heating system means a smaller, cheaper system can be installed. This is especially important in non-domestic buildings, which often have a significantly larger space heating demand and floor area than domestic dwellings.

In their 2023 Annual Progress Report to Parliament, the Climate Change Committee (CCC) highlighted non-residential buildings as an area of concern, nothing that, “There is a large and increasingly concerning policy gap relating to non-residential buildings.” Hence, it is crucial that the Scottish Government gives the same attention to the fabric efficiency of non-domestic buildings as it does for domestic ones. The best way to reduce the energy use and carbon emissions of non-domestic buildings is to make sure that they are adequately insulated. Thus, a fabric rating should be included on non-domestic EPCs, so that businesses as well as residents are incentivised to improve the fabric efficiency of their buildings.

As set out in our response to Question 6, we believe that non-domestic EPCs should include fabric rating as an additional headline metric.

A fabric first approach is the most effective method to carry out whole-building retrofit. This is true regardless of the building’s use. A high level of thermal efficiency is equally important for non-domestic buildings as it is for domestic ones. Adequate insulation could save businesses a significant amount of money on their overhead costs, especially with energy bills at their current high level. Therefore, fabric rating should be clearly displayed on non-domestic EPCs so that building owners are fully aware of their building’s fabric efficiency and what steps they can take to improve it.

The fabric efficiency of non-domestic buildings is also important to ensure that they have a correctly sized heating system. This is particularly important when buildings are installing a new low carbon heating system. For instance, If a heat pump is installed followed by insulation, the building’s heating system output may not be proportionate with its reduced space heating demand and therefore have capital and running costs that are unnecessarily high. The installation of fabric efficiency measures prior to, or alongside, the installation of a low carbon heating system means a smaller, cheaper system can be installed. This is especially important in non-domestic buildings, which often have a significantly larger space heating demand and floor area than domestic dwellings.

In their 2023 Annual Progress Report to Parliament, the Climate Change Committee (CCC) highlighted non-residential buildings as an area of concern, nothing that, “There is a large and increasingly concerning policy gap relating to non-residential buildings.” Hence, it is crucial that the Scottish Government gives the same attention to the fabric efficiency of non-domestic buildings as it does for domestic ones. The best way to reduce the energy use and carbon emissions of non-domestic buildings is to make sure that they are adequately insulated. Therefore, a fabric rating should be included on non-domestic EPCs, so that businesses as well as residents are incentivised to improve the fabric efficiency of their buildings.

Yes, we agree.

Yes, we agree with this in principle. The energy efficiency landscape is constantly changing as new policies and targets are introduced to drive the transition. The Scottish Government has set a target for all homes to reach EPC C by 2033.1 With the current validity period of 10 years, this means that an EPC carried out today would be still valid in 2033, even though the energy efficiency landscape will look drastically different by then.

Reducing the validity period to 5 years would allow a more up-to-date and greater coverage of EPC data across the housing stock. It would also provide a more accurate picture of the UK housing stock and its energy performance for policymakers, businesses and consumers. The Government.

However, if the Scottish Government is to proceed with this proposal, it must support industry to train new energy assessors and upskill existing workers, as it will be necessary to increase the number of skilled energy assessors to meet the increased demand for EPC assessments. This would also improve the accuracy of EPCs and thereby increase consumer confidence in the reliability of the EPC framework.

This represents a significant challenge for industry and government. Therefore, the NIA would like to see the Scottish Government work with retrofit employers and training providers to widen the provision of retrofit training across the country. The Home Decarbonisation Skills Training Competition has been very successful in England and is now in its second phase.2 When we signposted members towards this latest pot of skills funding, we had interest from Scottish members who enquired about whether Home Decarbonisation Skills Competition funding was available in Scotland (which unfortunately it is not).

There is clearly a demand and need for more subsidised skills funding in Scotland. Therefore, we would urge the Scottish Government to consider introducing a similar scheme to the Home Decarbonisation Skills Training Competition in Scotland, which would enable Scottish retrofit businesses to access subsidised training courses to train existing and new employees, and ultimately grow their businesses. Without more investment in training, we have concerns that there will be severe shortages in energy assessors and other roles key to the decarbonisation of homes. This could limit the practical viability of reducing the validity of EPCs to 5 years, and potentially hinder Scotland from reaching its wider energy efficiency targets.

Based on feedback from our membership, the requirement for installers to be Green Deal certified can represent a barrier to businesses and consumers. There are several reasons why an installer may not be Green Deal certified. For instance, some installers cannot use pre-existing “systems” because they a lot of their business is either architect-specified or needs bespoke solutions for installers. For these installers, it often doesn’t make sense to be Green Deal certified.

However, these businesses often miss out on business unfairly because of difficulty with customers accessing HES funding. Hence, we believe customers accessing HES funding should be allowed to use a Green Deal, Trustmark or NIA registered installer. This would give customers more options as well as ensuring better value for money for homeowners and taxpayers.

Yes, the NIA support this proposal as it will encourage EPCs to be used more and therefore will support its intended use as a guidance document for investment in home retrofit. The proposed changes will improve the accessibility of the document for readers. Enabling residents to view their EPC on a mobile device will allow EPCs to be viewed by a wider group of people. It will also enable people to view EPCs when they are on-the-go or away from their laptop. It will also allow for a more efficient system of updating the documents as the webpage can be updated with new data more frequently than pdf formats. As stated in the consultation, a webpage format will also reduce additional verification steps making the document more useable for those trying to access information about the properties they live in. The NIA support this proposal as it contributes to making EPCs more accessible and user-friendly.

As well as the format being easier to access, having the EPC on web page format will allow for additional links to be included helping readers to understand the content of the EPCs in greater detail. This is currently a barrier for consumers as the information on EPCs can be hard to follow without additional knowledge. In their letter to Lee Rowley MP, Parliamentary Under Secretary of State for the Department of Levelling up, Housing and Communities, ‘Reform of domestic EPC rating metrics to support delivery of Net Zero’ , the Climate Change Committee (CCC) list several factors that contribute to EPCs being unfit for purpose including the 1-100 rating scale, which does not provide useful information on what steps the consumer should take to improve the efficiency of their home.3 If EPCs were moved to webpage format as proposed, the advice provided can be accompanied by additional links enabling the reader to access supporting information to help them understand the content.

However, these businesses often miss out on business unfairly because of difficulty with customers accessing HES funding. Hence, we believe customers accessing HES funding should be allowed to use a Green Deal, Trustmark or NIA registered installer. This would give customers more options as well as ensuring better value for money for homeowners and taxpayers.

Yes. As mentioned above, being able to link readers to external information will support informed decision making on how they should invest in their homes. By directing readers towards existing support, such as existing energy efficiency and retrofit schemes in Scotland, they can see whether they are eligible for financial support, which according to the Energy Saving Trust (EST) is amongst the most common barriers for investing in home retrofit, alongside access to advice and information.4 The NIA support this proposal as this will add an extra layer of support provided through EPCs and will encourage engagement with existing schemes, helping to support the Scottish Government’s target of reducing emissions in homes by 68% from 2020 levels by 2030. Rather than the EPC being a standalone document, it can be used to link readers to information and existing support to help them to realise the retrofit work they are interested in, benefit from the results of an improved EPC rating and contribute to the decarbonisation of the housing sector.

However, it is important that readers understand that whilst EPCs offer advice, they should still get a full survey and retrofit assessment from a reputable installer before getting any work done to their home. This will ensure that they are choosing the right measure for their property and that they understand what is involved including time and cost.

To this end, we would recommend that, as well as linking to EST and HES, EPCs should also signpost customers to where they can find reputable, Trustmark-registered local installers. This is important as for many residents, the next step after having an EPC done is to install retrofit measures. It can be challenging for consumers to know where to start and sometimes speaking to local installers can clarify what work is available and at what cost. Consumers should be encouraged through the advice on their EPC to receive multiple quotations on the cost of the work where possible. By signposting to a trusted site this can help to simplify the retrofit process for consumers and help them take the next step to upgrading their home.

By directing consumers to a site where they can find high-quality, local installers, it would also reduce some of the burden on advice services, thus reducing the risk that a bottleneck could be created through massed calls to EST and HES, for example. For customers looking to install energy efficiency measures of the back of an EPC, it might be helpful to direct them directly towards businesses who can install the measures they want.

Yes, the NIA support this proposal as it will allow new homeowners to view and understand previous EPC ratings allocated to the property and any historical retrofit works that have taken place at the property to get to the current EPC. This proposal will also help local authorities to understand the common issues and solutions in housing in their local area. The effective use of data is vital to give local authorities an in-depth and detailed picture of their housing stock. This will allow them to plan more effectively for council-led retrofit programmes and create local decarbonisation strategies that are tailored to the local housing stock.

This data may also be useful for understanding local skills gaps through the identification of the most common work needed in homes in the area and the availability of local installation companies. The NIA works closely with contractors, suppliers and installers to identify ways to address the UK wide green skills gap with localised solutions being at the forefront of overcoming this issue in order to reach Net Zero.

Yes, the NIA support the proposal to include the EPC register in an Application Programme Interface (API) to allow for key stakeholders to access historical EPC data throughout the year. These key stakeholders could include homeowners, local authorities, industry representatives, research organisations and policymakers. The NIA believe this kind of data transparency can support key stakeholders in understanding how to improve the EPC rating of homes through access to information, which will ultimately support the transition to Net Zero.

Having accurate EPCs is fundamental to the decarbonisation of the housing sector as they are often the starting point from which consumers make decisions on what retrofit works to carry out on their properties. On principle the NIA agree with the proposed changes to the auditing process as smart auditing would allow for automatic triggers for EPCs meeting certain criteria, thereby enabling homes to be highlighted where urgent improvements are needed. This would be particularly useful for identifying the hardest to treat and worst performing homes. However, there are some questions on how this would work in practice in terms of informing homeowners and arranging assessors to visit the properties in question if this is to be part of the process.

The NIA believe prioritising energy efficiency improvements to the building fabric are the most effective ways of increasing thermal comfort, reducing energy loss from properties and reducing energy consumption as properties require less energy for space heating. Therefore, EPCs should advise households to invest first in insulation measures before moving to heating system upgrades according to a fabric-first approach. More widely, following the fabric-first approach has the highest benefits for decarbonisation of the housing sector as insulation measures help to reduce energy consumption and enable an affordable switch to using low-carbon heating systems such as heat pumps.

The NIA agree with the timeline proposed as it allows a grace period for stakeholders and homeowners to become familiar with the changes. The time period aligns with the introduction of other regulations in Scotland including the Energy Performance of Buildings Regulations. However, there is also an urgency to the introduction of policy changes that will serve to encourage investment in the decarbonisation of the housing sector, which these changes are likely to do, therefore we encourage the Scottish government to implement the reforms as quickly as possible.

Proposed amendments to the Boiler Upgrade Scheme Regulations – GOV.UK (www.gov.uk)

Closing Date: 12 October 2023
Response submitted by: National Insulation Association
For more information, please contact: info@nia-uk.org

About the National Insulation Association The National Insulation Association (NIA) represents the insulation industry in the UK with a member base comprised of installers, system certificate holders, and manufacturers who provide a wide range of insulation solutions for homes and buildings. The NIA and its members are fully committed to maintaining and raising standards within the insulation industry.

Yes, the current requirement for a valid EPC with no outstanding recommendations for loft or cavity wall insulation should be maintained. These minimum insulation requirements are vital to make sure that properties are ready for the transition to low-carbon heat. Removing these requirements would create a number of risks, particularly for consumers who may see increased costs and worse outcomes as a result.

Firstly, if heat pumps are installed in properties with inadequate insulation, there is a risk that those heat pumps will have overly expensive running costs, as heat pumps are most effective in properties with a high thermal efficiency. Making sure that a home has adequate insulation prior to installing a heat pump is essential to safeguard consumers from potential energy bill increases. The current level of the energy price cap means that the unit price for electricity is almost 4 times higher than that for gas.1 Therefore, to ensure that consumers do not see higher prices, insulation minimum requirements are absolutely vital to provide the right internal conditions for heat pumps to run as efficiently and as affordably as possible. In this way, insulation has a crucial role to play to ensure that the transition to low carbon heat is a just one which does not result in increased costs for consumers. This is particularly relevant within the context of the current cost of living crisis.

Secondly, if a heat pump is installed followed by insulation, consumers may be left with a heating system that is not proportionate with the property’s reduced space heating demand and therefore has capital and running costs that are unnecessarily high. The installation of fabric efficiency measures prior to, or alongside, heat pump installation means a smaller, cheaper heat pump can be installed which will then operate at higher efficiencies over its system lifetime. For these reasons, a fabric-first approach has been incorporated into government policy and accepted as industry best practice for a number of years.

According to the Energy Saving Trust, if a home has an uninsulated loft and cavity walls, it could be losing over half of its heat through those two building elements.2 3 Hence, it is crucial that the current requirement for a valid EPC with no outstanding recommendations for loft or cavity wall insulation is maintained. Now is not the time to abandon the importance of a fabric first approach, which is the best way to reduce consumers’ bills and make sure that the transition to low carbon heat is affordable for all. Removing insulation minimum requirements in the middle of a cost of living crisis could have damaging impacts on consumers.

Consumer confidence is a crucial element of the transition to low carbon heat. The Government has set ambitious targets for the decarbonisation of heat, including to install 600,000 heat pumps per year by 2028, rising to 1.9 million per year by 2035.4 For these targets to be met, consumers must be on board. If residents find that their heat pump is overly expensive or incorrectly sized as a result of inadequate insulation, then this may have damaging effects on consumer confidence, which could hinder the uptake of heat pumps. Thus, the importance of a fabric first approach cannot be ignored, as insulation will be key to ensuring that the transition to low-carbon heat is as smooth and cost-effective as possible for consumers.

The NIA does not consider insulation requirements on EPCs to be a barrier to uptake.

As outlined in our response to Question 3, a fabric first approach to home decarbonisation is vital to ensure that the transition to low carbon heat is as smooth and cost-effective as possible for consumers. Therefore, we believe that the requirement for a valid EPC with no outstanding recommendations for loft and cavity wall insulation should be maintained.

The main issue preventing uptake of heat pumps via the Boiler Upgrade Scheme (BUS) is the level of grant funding being offered. This has been the main barrier to the success of the scheme thus far, not minimum insulation requirements on EPCs, We are pleased to see that the Government is taking steps to address this, as evidenced by the Prime Minister’s announcement last month that the grant funding level will be rising to £7,500 from 23 October 2023.

The findings of the Lords Environment and Climate Change Committee’s inquiry into BUS, published in February 2023, found that the low level of grant funding was one of the main factors holding back the uptake of heat pumps via the scheme. 6 On average, the £5,000 grant offered by the scheme for an Air Source Heat Pump only represents approximately half of the installation cost. 7 Therefore, even with the BUS grant, households still face substantial remaining costs, which has deterred many from applying for the scheme. As a result, the Committee recommended raising the grant level to address low uptake8 , which the Prime Minister has now implemented in a move that has been welcomed across the home decarbonisation industry.

Since the Government is already removing the main barrier holding back the success of the scheme, there is no need to also remove minimum insulation requirements, particularly due to the risks associated with such a move. As mentioned in our answer to Question 2, the removal of insulation requirements would create substantial risks, including raising energy costs for residents and damaging consumer confidence in the transition to low carbon heating.

The main issue preventing uptake of heat pumps via the Boiler Upgrade Scheme (BUS) is the level of grant funding being offered. This has been the main barrier to the success of the scheme thus far, not minimum insulation requirements on EPCs, We are pleased to see that the Government is taking steps to address this, as evidenced by the Prime Minister’s announcement last month that the grant funding level will be rising to £7,500 from 23 October 2023.

The findings of the Lords Environment and Climate Change Committee’s inquiry into BUS, published in February 2023, found that the low level of grant funding was one of the main factors holding back the uptake of heat pumps via the scheme. 6 On average, the £5,000 grant offered by the scheme for an Air Source Heat Pump only represents approximately half of the installation cost. 7 Therefore, even with the BUS grant, households still face substantial remaining costs, which has deterred many from applying for the scheme. As a result, the Committee recommended raising the grant level to address low uptake8 , which the Prime Minister has now implemented in a move that has been welcomed across the home decarbonisation industry.

Since the Government is already removing the main barrier holding back the success of the scheme, there is no need to also remove minimum insulation requirements, particularly due to the risks associated with such a move. As mentioned in our answer to Question 2, the removal of insulation requirements would create substantial risks, including raising energy costs for residents and damaging consumer confidence in the transition to low carbon heating.

Energy Company Obligation schemes: Standard Assessment Procedure (SAP) and Reduced Data SAP (RdSAP) amendments – GOV.UK (www.gov.uk)

Closing Date: 11 September 2023
Response submitted by: National Insulation Association
For more information, please contact: info@nia-uk.org

About the National Insulation Association
The National Insulation Association (NIA) represents the insulation industry in the UK with a member base comprised of installers, system certificate holders, and manufacturers who provide a wide range of insulation solutions for homes and buildings. The NIA and its members are fully committed to maintaining and raising standards within the insulation industry.

The NIA agrees with the proposal to update legislation so that only SAP10.2 should be used, subject to the appropriate transition period.

An update to the SAP2012 framework is long overdue. SAP10.2 is more accurate than the existing SAP2012 framework, and is based on more up-to-date and reliable information. This is especially important given recent large fluctuations in energy prices. Therefore, SAP10.2 will result in more reliable energy performance data, which is beneficial for residents and retrofit businesses.

SAP10.2 will also better support the decarbonisation of homes. By providing a reduced value for the carbon emissions of electricity, it provides a greater incentive to install low carbon, electrical systems. This is an important update, which should help to facilitate and accelerate the transition to net zero homes.1 Since SAP10.2 is already in use across England, Scotland and Wales, industry should be capable of adapting to its use within ECO4 and Great British Insulation Scheme (GBIS) retrofits, especially given the proposed six month transition period.

Yes, we agree with the proposed six-month transition period. As this is the completion timeline for ECO4 projects that include a district heating element, this is an appropriate length for the transition.

3.1) The NIA’s top preference is Option 2. This option minimises the transitional impact associated with updating from RdSAP2012 to RdSAP10.2 and it also avoids the administrative issues associated with operating two versions of RdSAP concurrently. We disagree with Option 3 because it risks a significant number of properties becoming ineligible for ECO4 funding, which in turn would result in lost business for the industry. It would also mean that fewer households can benefit from vital energy efficiency upgrades. This is an outcome that must be avoided. Modelling carried out by an NIA member, based on 5 different property archetypes with differing retrofit scopes, shows that RdSAP10.2 lowers both properties’ pre- and post-retrofit scores when compared to RdSAP2012. This decrease is particularly significant in projects that include renewables. Under Option 3, many retrofits will need to be evidenced using RdSAP10.2. There is a substantial risk that some of these retrofits will no longer meet the ECO4 Minimum Requirement (MR), particularly those that would have achieved a post-retrofit SAP band of mid to low C. Furthermore, the hard stop in Option 3 is too risky for installers, as a transition period is essential to effectively adjust to the changes to RdSAP. In practice, installers would avoid carrying out work on properties where their modelling shows that the post-retrofit SAP band will be close to the MR, as there is a risk that the project will not meet the MR when converted to RdSAP10.2. This will mean that many households miss out on energy efficiency measures because of the uncertainty involved in Option 3. Changing the goalposts for eligibility and evidencing overnight without any transition period would be disastrous. This would make a lot of projects ineligible and create dangerous confusion among installers. This would have a significant detrimental impact on scheme delivery. The NIA also has concerns about the workability of Option 1. Under this option, two versions of RdSAP would be running concurrently, which would place a large administrative burden on TrustMark and Ofgem as scheme providers. The software is not designed to support two versions of RdSAP running at the same time. Therefore, we have concerns that under Option 1, inadequate infrastructure and extra administrative complexity may delay projects and create bottlenecks within schemes. This will have damaging effects on both residents and installers. There is also a risk that having two versions of RdSAP running concurrently will create unnecessary confusion among installers.

3.2) The NIA does not have a second preference, as we believe that Option 2 is the only viable option. Neither Option 1 or Option 3 are practical or workable solutions for the reasons outlined in our response to Question 3.1.

Yes, we agree that 3 months is a sufficient period to allow the completion of retrofits following the introduction of RdSAP10.2. Within ECO4, the majority of projects are shorter than 3 months. There may need to be some flexibility within this, as some complicated, multi-measure retrofits, particularly ones that may include a change of heating system, may have longer lead times. However, for most retrofits carried out under ECO4, 3 months is an appropriate timeframe. As GBIS is primarily a single-measure scheme, we do not foresee any issues with completing retrofits in 3 months under this scheme.

If RdSAP10.2 is introduced into other schemes, such as SHDF, which include large scale retrofit projects, then the transition period may need to be longer than 3 months. This is something the Government will need to consider when it introduces RdSAP updates into other schemes. However, considering most ECO4 installations are small retrofit projects, a 3 month period to allow completion should be achievable

While we agree that Option 2 is the only viable option, we recognise the risk that some ECO4 retrofits may not achieve the MR once converted to RdSAP10.2, which will normally result in a lower SAP rating. It is vital that this risk is mitigated as much as possible, so that vulnerable households do not miss out much-needed energy efficiency upgrades and installers do not lose out on business.

We believe that the consultation’s proposal for installers to pre-lodge a post installation EPR based on RdSAP2012 to prove that they would have met the MR is a sensible approach to minimise this risk. Installers will generally carry out their own modelling before embarking on a retrofit project to forecast expected outcomes and ensure that they will meet the MR. This should provide sufficient evidence that a project would have met the MR, as long as, once the install is completed, installers verify that they have installed the measures included in the EPR.

Lowering the MR by half a SAP band is also a viable option. Although it is not as accurate or dwelling-specific as a pre-lodged EPR, it is a fairly simple approach which would not add much administrative complexity. It would also mitigate the risk of projects failing to meet the MR.

Under Option 2, the Building Research Establishment (BRE) would need to publish its conversion methodology, which would enable installers to quickly and easily convert pre-retrofit SAP ratings from RdSAP2012 to RdSAP10.2. To ensure that the change from RdSAP2012 to RdSAP10.2 runs as smoothly as possible, it is important that the BRE publishes this conversion methodology well in advance of March 2024 (the expected changeover date). Before the RdSAP updates come in, energy efficiency businesses will need time to gather existing data points and then go through existing EPCs, converting them to RdSAP10.2. Thus, it is critical that the Government decides on an approach and the BRE publishes its conversion methodology as soon as possible so that industry has sufficient time to prepare and adapt to the changes.

Yes, we agree with this proposal, as updating scoring methodology at this stage would create extra administrative complexity, which could impact upon scheme delivery.

We have concerns that the RdSAP and SAP updates will lead to properties being excluded from schemes. While we agree that an update of RdSAP and SAP is needed, it is vital that the Government implements the changes in a way that will mitigate the number of households being excluded from schemes.

As previously discussed in our response to Question 5, there is a risk that properties which would have achieved a post-retrofit score of mid to low SAP band C under RdSAP2012 may now drop into band D under RdSAP10.2. This could lead to a significant number of previously eligible properties now missing the MR. For installers, it will be too risky to treat marginal properties that may no longer meet the MR under RdSAP10.2 In practice, this could mean lots of vulnerable households are excluded from energy efficiency upgrades.

In order to achieve the scheme’s delivery targets and the UK’s net zero targets, it is important that energy efficiency upgrades are delivered to as many homes as possible. The UK has some of the least energy efficient properties in Europe2 , with many properties in urgent need of upgrade. According to the Office for National Statistics, 704,000 properties in England are still rated E, F and G.3 It is vitally important that the RdSAP/SAP update does not result in vulnerable, lowincome households missing out on much-needed support. National Energy Action’s latest estimates show that there are currently 6.6 million households in fuel poverty.4 As a result of energy price rises over the last year, millions of households across the UK are now struggling to pay their energy bills.

Thus, the Government’s primary consideration when implementing these changes must be to mitigate their impact on vulnerable, fuel poor households. As such, it is crucial that they take steps to ensure that as few households as possible become ineligible for energy efficiency support as a result of RdSAP/SAP updates. To minimise this risk, the NIA supports the Government’s proposed mitigation options, such as enabling installers to pre-lodge a postinstallation EPR and lowering the MR by half a SAP band.

Another issue which could arise from the updates to RdSAP/SAP concerns their interaction with the Minimum Energy Efficiency Standard (MEES). Since RdSAP10.2 generally leads to lower SAP scores than RdSAP2012, there is a risk that some private rented properties, which would have previously achieved MEES under RdSAP2012 may now no longer be compliant under RdSAP10.2. For instance if a landlord has upgraded their property to a SAP band of mid to low C in order to be compliant with proposed changes to MEES, there is a chance that a new EPC carried out using the RdSAP10.2 methodology would give the property a SAP rating of D, thus meaning the property will no longer be compliant once MEES rises to EPC C. While the NIA is supportive of MEES and efforts to raise levels of energy efficiency levels in the private rented sector, we would urge the Government to consider the interaction between RdSAP changes and MEES. This includes offering support where necessary to landlords and tenants to ensure that as many as properties as possible remain compliant with MEES.