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Industry Calls on Government to Do More to Prevent Homes From Falling into Fuel Poverty

Industry Calls on Government to Do More to Prevent Homes From Falling into Fuel Poverty

Following the lack of focus on Energy Efficiency in the Government’s Energy Security Strategy yesterday, the National Insulation Association has signed a cross-industry letter sent to HM Treasury today. Issued by the Sustainable Energy Association, the letter calls on the Government to expand the eligibility of the Energy Company Obligation scheme to prevent homes from falling into Fuel Poverty.

View letter: https://www.sustainableenergyassociation.com/resources/eco-letter-from-the-sea/

The Government has provided support for energy efficiency measures since 2013 under the Energy Company Obligation (ECO), which has since seen over 3 million energy efficiency measures installed in more than 2 million homes. However, while the tried and tested scheme targets vulnerable households, support for homes that fall outside this definition are not eligible.

Two million more UK households could in fact be plunged into fuel poverty due to the price cap increase this April according to National Energy Action (NEA), with the cost of living crisis expected to worsen in Autumn.

Backed by leaders across the energy efficiency industry, including the NIA, the letter calls on the Government to strengthen its Energy Security Strategy by expanding the eligibility criteria for ECO.

The proposed solution is an ECO + Scheme, which would run adjacent but separate to ECO to ensure the key support the scheme brings to vulnerable households is not impacted, whilst helping those who will soon be at risk.

It is proposed that the ‘ECO+ Scheme’ would build upon the success of the current ECO scheme, bringing its benefits to the ‘able-to-pay’. It would run adjacent, but separate to, the current iteration of ECO to ensure the key support ECO brings to vulnerable households is not impacted.

A key difference is that whilst energy bill payers fund the current ECO scheme to support action to benefit vulnerable householders, ECO+ would have to be funded utilising taxpayer funding as additional costs could not be placed on energy bill payers at the current time.

British Energy Security Strategy

British Energy Security Strategy

British Energy Security Strategy

The Government has published its Energy Security Strategy today as part of its plans to boost Britain’s energy security following rising global energy prices and volatility in international markets.

Whilst key announcements focus more on additional supply, there are also key aspects that cover energy efficiency and demand reduction. However, the vast majority of the announcement, summarised below, is old news.

Energy Efficiency in Products and Buildings

  • Better labelling and product standards to be introduced so consumers can purchase more energy efficient products within heating, lighting, washing, and cooking.
  • The installation of household’s energy saving measures to be VAT free for the next 5 years. This is estimated to reduce the cost to consumers of insulation, double glazing, installing solar panels and heat pumps saving families £200 off the cost of installation.
  • A dedicated energy advice offering for smaller businesses to be established. This service is to deliver trusted advice on improving energy efficiency and decarbonisation.
  • Clearer energy performance standards across all buildings to be introduced phased in over the long term. This is likely to be linked to the EPC Action Plan.
  • Smart meters in new buildings to be deployed at a more accelerated rate.
  • Doubling of funding available to develop and pilot new green finance products for consumers from £10 million to £20 million.
  • Introduction of scheme under which lenders will work to improve the energy performance of properties.

Heat in Buildings

  • Heat pump manufacturing to be expanded supported by a Heat Pump Investment Accelerator Competition in 2022. This is estimated to be worth up to £30 million to make British heat pumps, which reduce demand for gas.
  • The UK hydrogen ambition to double up to 10GW of low carbon hydrogen production capacity by 2030. While this is to be used for cleaner power and transport, there is potential for fuelling heat.
  • The UK’s current 14GW solar capacity to grow up to five times by 2035. There will be consultation on the rule of solar projects on domestic and commercial rooftops.
  • Low-cost finance from retail lenders to be facilitated to drive rooftop deployment and energy efficiency measures.
  • Performance standards to be designed to make installation of renewables, including solar PV, the presumption in new homes and buildings.
  • From the industry, Neptune energy will invest to support the priorities through increasing production from Duva field in Norway to heat an additional 350,000 homes in the country.
  • £450 million Boiler Upgrade Scheme.
  • Commitment to ‘rebalancing’ the costs placed on energy bills away from electricity to incentivise electrification across the economy and accelerate consumers. This will also ensure heat pumps are comparatively cheap to run over time. BEIS will publish proposals on how to do so in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers

Government Response to ECO Consultation

Government Response to ECO Consultation

At the beginning of April 2022, after receiving a total of 144 responses, the UK Government published its response to the latest Energy Company Obligation consultation. In this article, we summarise some of the key points.

 

ECO3 Interim Delivery

Between 1st April and 30th June 2022, measures can be installed to ECO3 rules. Early delivery of ECO4 measures during any gap between ECO regulations is permitted.

 

Carry-under from the current obligation period is not permitted, but up to 10% of ECO3 delivery may be carried over to ECO4.

Solid Wall Alternative Measures can be carried over but they will not contribute towards the ECO4 Solid Wall Minimum Requirement. Measures delivered into E, F, and G-rated homes can be carried over but will not contribute towards the ECO4 EFG Minimum.

Where dual measures are delivered (insulation and heating), there is the option for the heating measure alone to be elected as carry-over. Replacement of efficient broken electric storage heating (ESH) and boilers carried over will count towards the ECO4 Broken Heating Replacement Cap.

Replacement of inefficient ESH and boiler upgrades (including those broken) can be carried over and fall outside of the ECO4 Broken Heating Replacement Cap. Inefficient heating systems can be replaced with First-Time Central Heating (FTCH) uncapped as all FTCH will also fall outside of the ECO4 Broken Heating Replacement Cap.

These are all subject to the overall 10% carry-over maximum. Carry-under has been deemed unnecessary.

 

Continuing a Fabric First Approach

The Solid Wall Minimum Requirement will be retained, and this option will be removed from Solid Wall Alternative Measures.

Whilst the consultation discussed SWMR set at 22,000 solid wall insulation measures per year for ECO4, based on updated modelling, the Government has decided to increase SWMR to be set at an equivalent of 90,000 measures for ECO4. This will be alongside the private-tenure EFG minimum equivalent of 150,000 homes.

Unless all eligible fabric measures are already installed to meet the current Building Regulation standards; the home holds a listed status; or is in a conservation area and unable to have insulation installed, then minimum insulation preconditions for all homes receiving any heating measure (including heating controls) will be enforced:

  • All band D homes receiving any heating measure other than First Time Central Heating (FTCH) must have at least one primary insulation measure installed (flat roof, pitched roof, room-in-roof, cavity or solid wall, park homes and floor insulation)
  • All E, F and G-banded homes receiving any heating measure, and band D homes receiving FTCH, must have all exterior facing cavity walls and loft (including rafters) or roof (including flat, pitched and room-in-roof) insulated.

 

ECO4 Flexible Eligibility

Up to 50% of the obligation can be met under ECO4 Flex delivery (LA and Supplier Flex). Participation will continue to be voluntary for suppliers, local authorities and the devolved administrations.

 

Eligible Households

There will be a pool of eligible households that BEIS estimates to be at least 3.5 million.

 

Minimum Requirements

A minimum equivalent upgrade of 150,000 private-tenure band EFG homes will be introduced. There will be minimum requirements for works with all eligible owner-occupier homes having an efficiency rating of D-G. Private rental homes and social housing will need to be E-G.

 

Partial Project Scores

The Government has decided to implement its proposal to use deflated partial project scores where a project is found to be non-compliant with the minimum requirement (MR) at the point of notification. Those projects will not have met the MR in practice and therefore all the remaining measures in the package will receive partial project scores, while rejected measures receive no score.

Click here to read the Government’s full response document.

NIA Parliamentary Day – 06 June 2022

On Monday 6th June, the NIA will host three exclusive events in London.

The first, beginning at 15:30, will be our AGM, which will be an exclusive, members-only session. This will be followed immediately at 16:00 by an informal industry policy briefing, which will be open to members and to a list of special invitees. Here, attendees will be able to interact and engage with NIA members and BEIS officials.

 

Both sessions will take place at the same afternoon venue:

Broadway House, Tothill Street, London, SW1H 9NQ.

Then, between 18:30 and 21:30, we will host a Parliamentary Reception in the prestigious

surroundings of the House of Commons Terrace. Here, attendees will be able meet with NIA members, BEIS officials, industry stakeholders and policy-makers. They will also hear from several speakers, including our key speaker Lord Callanan, Parliamentary Under Secretary of State (Minister for Business, Energy and Corporate Responsibility). He will share his thoughts on the Government’s priorities for energy efficiency and the role that insulation can play in the journey to net zero.

 

Evening venue:

Terrace Pavilion, House of Commons, London, SW1 0AA.

The events are sponsored by NIA members STO and Sustainable Building Services and further details can be found on the event flyer:

https://www.nia-uk.org/wp-content/uploads/2022/03/nia-parliament-digital-flyer-social.pdf

 

If you have not received your invitation or would like further information on the sponsorship opportunities please email info@nia-uk.org

Opportunities for NIA Members

Further to a wider collaboration between the NIA and the Greater South East Energy Hub, we are delighted to be able to signpost members to some fantastic opportunities to work with the Hub on schemes such as LAD2/3 and HUG.  This is the first step in an exciting collaboration between two organisations that we are sure will have fantastic benefits for both parties. 

The Greater South East Energy Hub* operates in the south east and east of England and has been building a supply chain of installers ready to provide energy-efficient measures, renewable energy, and low carbon heating for Government-funded retrofit projects. They are keen to see more insulation installers benefit from this opportunity, particularly with the emphasis on ‘fabric first’.

These domestic retrofit schemes include:

  • The current Local Authority Delivery (LAD2)
  • Future Sustainable Warmth programmes (LAD3/Home Upgrade Grant)

Funded by the Department for Business, Energy and Industrial Strategy (BEIS) and delivered via local authorities, the schemes will mean tens of thousands more households nationally will be able to be more energy efficient as a result of energy-saving upgrades and low carbon heating.

A monthly opportunity – join the regional supply chain

An opportunity opens every month for installers that are PAS 2030:2019 and Trustmark registered to register on the Dynamic Purchasing System (DPS). This is the procurement process being used by local authorities and social housing providers in the region to buy retrofit works. Installers that meet the registration criteria are added to the System.

Local authorities can then invite suppliers on the System to bid for a specific contract that is relevant to their area of work.

To find out more, click here.

*The Greater South East Energy Hub is one of five local Energy Hubs in England. The other four Hubs are also operating similar schemes and more information can be found by visiting their respective webpages below. 

North East | North West | Midlands | South West

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558. 

SWIGA AGM Invitation – Birmingham – 31st March 2022

NIA members are invited to the Solid Wall Insulation Guarantee Agency’s (SWIGA) latest event on 31st March 2022 at the Westmead Hotel, Birmingham.

The NIA and SWIGA have recently been collaborating together with BEIS on several topical solutions, such as PAS 2035 (regarding the below damp proof course, DPC, and potential verge trim solutions), potential finance issues of retrofitted properties such as insurance and mortgage issues. We have also joined up to provide BEIS with input on the design and implementation of LAD, HUG, SHDF, and ECO4.

It would be fantastic to see you all at this event in person and help grow our collaborative efforts with SWIGA.

Please email info@swiga.co.uk by 21st March to make sure you are allocated a space.

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558. 

Government Response to Public Account Committee’s Damning Report on the Green Homes Grant

In December 2021, the Public Accounts Committee published a report on the Green Homes Grant, detailing how it had ‘underperformed badly”, upgrading only about 47,500 homes out of the 600,000 originally envisaged and delivering a small fraction of the expected jobs.

The NIA is pleased to see that the Government has this week published its response to the report, acknowledging its shortfalls and detailing its plans for improving the design and delivery of future schemes. It is particularly promising to see that the Department for Business, Energy and Industrial Strategy has recognised the need for greater liaison with industry and consumers in future programme design.

The NIA remains committed to working closely and collaboratively with BEIS and will continue to share the views and considerable experience of members in supporting the design and implementation of future schemes.

Key highlights:

  • BEIS accepts the implementation time was unrealistic, and has secured HMT agreement to roll committed spend for the Home Upgrade Grant into future tax years. This is important because it allows them to smooth over peaks and troughs in demand without having to hand it’s in year cash back unspent and the end of the financial year.
  • They accept the scheme was overly complex, which they blame on being forced to roll it out so quickly (having no rollover flexibility). They also accept they need to ensure more meaningful engagement with industry and consumers in future programme design.
  • They will introduce a more rigorous assessment procedure for appointing contractors to run future schemes.
  • They agree they didn’t learn lessons from previous energy efficiency schemes, and have committed to an independent evaluation which will be published in August 2023 and shared with all relevant officials. They claim they have already involved more than 100 officials in a lessons learnt project from HMT, No 10 and elsewhere. They have also set up a new programme to increase the department’s capacity to deliver major projects.
  • BEIS also notes in its response that one of their KPIs to No 10 is the improvement in the number of EPC Cs, on which they have to report on annually. Which should put pressure on them to find ways to make a difference.

To read the response in full, click here.

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558. 

NIA supports open Letter from the ADE to cut green VAT

The National Insulation Association has supported the ADE and the wider sector in calling for a reduction in the VAT applied to energy efficiency measures from the current rate of 20% to 0%, similar to that of new build projects.

Regardless of what policies and other incentives exist for the retrofit market, with 20% VAT on all retrofit works to existing homes, there is a strong disincentive to carry out deep retrofit works. This is a particularly critical issue considering the ongoing energy price crisis – whilst energy efficiency solutions alone cannot solve the issue of soaring energy bills, they are an effective way in which the UK can work to futureproof the warmth, health and comfort of its citizens.

To find out more, click here.

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558. 

Provisions for the end of ECO3

The Department for Business, Energy and Industrial Strategy (BEIS) has provided an update on the Energy Company Obligation (ECO3) End of Scheme Eligibility Matching.

The main points to note are:

  • The Department for Work and Pensions (DWP) benefits data matching facility will close for ECO3 eligibility matching on 31st March 2022. It is unlikely that BEIS will be able to reopen until the ECO4 statutory instrument comes into force.
  • Parties participating in ECO can still check eligible households up to 31st March 2022.
  • Parties participating in ECO can still check eligibility through alternative forms of benefit evidence.
  • LA Flex eligibility does not rely on data matching, so targeting under LA Flex will not be affected.

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558. 

Social Housing Decarbonisation Fund awards £179 million

First wave of Social Housing Decarbonisation Fund allocates £179 million to 69 projects

 

With energy efficiency improvements being one of the most effective ways to reduce energy bills, the National Insulation Association welcomes news that the first wave of the Social Housing Decarbonisation Fund will improve 20,000 homes.

The Department for Business, Energy and Industrial Strategy (BEIS) has named a total of 69 projects to have been successful in bidding for funding through the scheme which will invest a total of £3.8 billion over a period of ten years. The funding follows the success of a £61 million demonstrator project, which improved the energy efficiency of 2,100 households.

Targeting social housing properties with an Energy Performance Certification (EPC) rating of D or lower, the funding will see tens of thousands of tenants across England benefit from energy efficiency upgrades including external wall insulation, roof insulation, energy efficient doors and windows, heat pumps and solar panels.

What impact will the funding have?

  • 20,000 social housing properties across England will receive energy efficiency upgrades as government announces £179 million cash boost
  • Funding for 69 projects will help cut fuel bills for social housing tenants and deliver warmer homes
  • Upgrades will support around 9,000 green energy sector jobs and deliver emissions savings equivalent to taking up to 6,000 cars off the road in any given year

Where are the projects located?

  • London, £23,708,238
  • Southwest, £5,024,842
  • Southeast, £8,608,446
  • East of England, £27,323,006
  • West Midlands, £23,208,418
  • East Midlands, £ 27,760,477
  • Northeast, £14,177,002
  • Northwest, £26,309,473
  • Yorkshire and the Humber, £22,573,272

What next?

The upgrades are expected to be completed by the end of March 2023 as part of plans to support lower income and more vulnerable households.

In the Government’s Heat and Buildings Strategy and Net Zero Strategy, a commitment was made to invest £800 million for the Social Housing Decarbonisation Fund as part of the 2021 Spending Review process across the next three years. This commitment, together with today’s announcement and the associated demonstrator project, brings the total committed funding to just over £1 billion so far.

Wave 2 of the Social Housing Decarbonisation Fund is due to launch in the next financial year, with more details expected in the coming months.

 

If you’d like to get in touch with your thoughts, or if you have any questions, please contact us at info@nia-uk.org or call us on 012171664558.