News

As promised, the Department for Business, Energy and Industrial Strategy (BEIS) has released guidance for the Social Housing Decarbonisation Fund Wave 2.

The £800m two year scheme aims to install energy performance measures in social homes in England. It was developed as part of the 2021 Spending Review Settlement and will look to tackle fuel poverty, reduce carbon emissions, improve comfort in the home whilst also developing the retrofit sector and supporting the green economy.

What does the guidance say?

The guidance provides an overview of the key headlines of Social Housing Decarbonisation, outlines the differences between Phase one and Phase two, talks about the funding available, and also gives additional considerations and an indicative timescale.

The next key date to be aware of is early August, when BEIS intends to release Application forms, further FAQs, Grant Funding Agreements, Grant Offer Letters and Data Sharing Agreements. The competition is then set to launch at the end of August, closing 8 weeks after it launches.

To read the guidance, please click here.

What are the performance and delivery considerations?

• Homes must reach EPC rating C (with exceptions for F/G rated homes that cannot reach this level
• Installers must be TrustMark accredited
• PAS2035 must be used to ensure quality and safety

Feedback to the NIA’s response on Welsh Housing Quality Standard 2023

Thank you to those who have provided their feedback on the draft consultation response for the Welsh Housing Quality Standard 2023. The deadline for those who have yet to respond is 27th July 2022. Your feedback helps to shape and influence industry, and your input is much appreciated.

If you haven’t received this but would like to, please email Fiona.chestnutt@gemserv.com to be added to the policy mailing list. Any questions please let me know.

Updated Approved Document F1 – Ventilation 

Building Regulation Approved Document F (AD F) has been updated for England and Wales. It concerns ventilation to maintain indoor air quality and is specific to ‘Existing Dwellings’ only. It came into effect in England on 15^th June 2022, and will later come into effect in Wales on 23^rd November 2022.

The equivalent areas for background ventilation in specific locations  in an ‘Existing Dwellings’ has increased. These are as follows:

Notes

• Approved Document F: Volume 1 applies to dwellings
• Approved Document F: Volume 2 applies to buildings other than dwellings

Ofgem draft ECO4 guidance

Ofgem has published draft guidance; Draft Energy Company Obligation (ECO4) Guidance: New Measures and Products (NMAP) V0.1 | Ofgem for stakeholders who want to know about applying for and delivering new measures and products under ECO4. The document is shared on a comment basis alongside its ECO4 Administration Consultation Part 2.

It seek views on their proposed format and administration of the NMAP routes on ECO4. Please see the Ofgem ECO4 Administration Consultation Part 2 for further information on the type of feedback Ofgem are seeking, and on how to respond to the consultation.

If you have any questions, please contact Andy Morrall, Senior Technical Policy Manager Email: ECO@ofgem.gov.uk

For more information click here.

Ofgem’s Engagement Event

Ofgem are keen to hear from industry about their proposed administration for the Energy Company Obligation (ECO) 4 scheme as set out in their consultation which closes on 18th July 2022.

ECO4 intends to launch in summer 2022, to continue its support of low-income households to make their homes more energy efficient. ECO4 is intended to launch in summer 2022.

The event will provide an overview of Ofgem’s proposals as set out in the consultation. The event will be held on:
12^th July 9:30am – 11:30am

For more information click here.

Energy Security Bill

With so much going on in Parliament this week it has been a challenge to keep up. However, on 6th June, the Energy Security Bill was introduced to Parliament. It aims to deliver a more affordable, cleaner and secure energy system.

The date to consult on the powers is expected later on this year, and we will keep you up-to-date. For more information please see the below factsheet:

Energy Security Bill factsheet: Power to review the energy performance of buildings regulations energy certificates (publishing.service.gov.uk)

NIA members looking to play a part in the drafting of consultation responses are invited to subscribe to our policy mailing list.

Subscribe by emailing fiona.chestnutt@gemserv.com

From 1st April 2022 until 31st March 2027, a zero rate VAT applies to the installation of certain specified energy-saving materials.

The new rules, effective from 1st April 2022 in Great Britain, remove both the social conditions test and the 60% test for all installations of qualifying energy-saving materials in England, Scotland and Wales.

What Does This Mean?

Heat pumps and the installation of certain specified energy-saving materials with ancillary supplies are zero-rated in Great Britain. For example, installing loft insulation but having to cut a new loft hatch in the ceiling and making good to access the loft. The cutting of the loft hatch and making good is, in itself, a simple construction supply, but as the services have been carried out solely in support of the loft insulation, they become ancillary.

However, if you replace your existing roof with a new insulated one, the insulation clearly is a better way of enjoying the new roof and so the insulation is ancillary to the new roof. As the supply of the roof is standard-rated, this applies to the whole supply, including the insulation.

Click Here to Find Out More: https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086

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

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

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.

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