May 28, 2017 Last Updated 9:00 AM, May 26, 2017

ECO: lost in translation

Published in Talking Point
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Barrie Stanley, Energy Efficiency Manager for Wetherby Building Systems, argues that the government has lost its way with improving domestic energy efficiency and a complete overhaul is needed.

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DECC’s answer to improving domestic energy efficiency in the UK has become the subject of a political and media storm in recent weeks, with its latest announcements sparking justified criticism from media, MPs and the construction industry. The government needs to act quickly to restore confidence, but most importantly think back to its original aim and put in place an energy efficiency programme that provides help to those who need it most.

In 2009, the government launched two new energy efficiency schemes; Community Energy Saving Programme (CESP) and Carbon Emissions Reduction Target (CERT). These initiatives were designed to help cut the UK’s carbon emissions and improve the energy efficiency of low income households to reduce energy bills and help the increasing number of families living in fuel poverty. However, these aims seem to have been forgotten with the current schemes – Energy Company Obligation (ECO) and Green Deal – the government needs to take a step back and remember why these programmes are needed.

CESP focussed on providing energy saving measures to the lowest 10% of Lower Super Output Areas, with almost all measures delivered through partnerships with social housing providers and targeting private households located in these social housing areas. The scheme successfully installed energy saving measures in 1954 eligible low income areas, helping to bring a significant number of families out of fuel poverty.

Solid commitment

With it widely acknowledged that 50% of those living in fuel poverty live in solid wall properties, solid wall insulation (SWI) was a major focus for the CESP scheme. SWI was the most installed measure under the programme, with some 75,255 properties being applied with SWI during the funding period.

A total of 154,364 vulnerable households now benefit from warmer homes and cheaper energy bills as a result of the CESP scheme. These families, who live in cold, draughty properties and struggle to pay their energy bills are the families that funding should be helping, but this is no longer the case with the current programmes.

Following the achievements of CESP and CERT, instead of building on these successes and improving the schemes, the government took a step backwards with the launch of ECO and Green Deal. Fraught with issues from the very beginning, the initiatives have struggled to gain any momentum and confused the industry and consumers alike. However, the noticeable difference is that the majority of funding has been available to any consumers, so many families, who could arguably afford to fund some of the work themselves, have been receiving funding to carry out energy efficiency measures and benefit from the savings on their energy bills.

Disappointing uptake

The ECO scheme was supposed to work alongside the Green Deal and focus on vulnerable consumer groups, yet the Carbon Saving Community Obligation (CSCO) element of the programme, which obligates energy companies to focus on the provision of measures to low income areas, is only a minor part of the funding stream. The uptake of SWI, in particular, has been extremely disappointing, with just 771 SWI installations under CSCO approved by Ofgem up to June 2014.

This uptake is not likely to improve, with DECC confirming within its ECO Consultation Response that focus will move away from SWI in the next phase of funding. The combination of setting the minimum target of SWI installation levels based on carbon savings, along with allowing loft and cavity wall insulation to be included as primary measures, will see energy companies opting to cherry pick schemes to fit with cheaper, easier measures that provide the greatest carbon savings. This will mean millions of fuel poor households, that could greatly benefit from SWI, will be ignored.

Put simply, the government is discriminating against those living in solid wall properties; fuel poverty residents living in cavity wall properties will receive funding to have insulation installed, however those living in solid wall properties will get little help to insulate their homes.

There are still some seven million solid wall properties in need of insulation in the UK and half of all households in fuel poverty living in solid wall properties, so the benefit of SWI is not something that can be ignored. If the government is taking the focus away from SWI with the next phase of ECO then a separate solid wall insulation programme is needed to ensure that the potential carbon savings from SWI installations are realised.

The government continues to try and salvage something from its failing energy efficiency schemes, with the Green Deal Home Improvement Fund (GDHIF) the latest initiative to try and encourage uptake of the struggling Green Deal. While it was initially hailed as a positive move, the GDHIF’s sudden closure after just six weeks is again testament to a scheme not fully thought out by the government. It is also another example of incentivising the mass consumer market to install energy saving measures, which they could likely afford to fund themselves, rather than concentrate funding on those who are in desperate need of energy efficiency measures.

Increasing numbers of industry associations, construction companies, charities, energy groups, and manufacturers are calling for the government to make a significant investment in improving domestic energy efficiency. The latest publication: “A Housing Stock Fit for the Future: Making Home Energy Efficiency a National Infrastructure Priority” was launched by a coalition of more than 20 organisations in June. The report seeks to demonstrate to the government why retrofitting the UK’s aging housing stock to high energy efficiency levels is the only solution to the government’s aims of controlling energy bills, reducing carbon emissions and tackling fuel poverty.

Reassess government strategy

How long is the government going to ignore these pleas? There are currently 2.5m households in England classed as being in fuel poverty, with this figure expected to rise to 2.9m in 2016. The only way to bring these households out of fuel poverty is to ensure their energy bills are permanently reduced through a more energy efficient home.

Instead of looking for ways to improve its current schemes, which will not even make a dent in addressing the fuel poverty crisis in the UK, the government needs to start again with a new approach. As a matter of urgency, DECC needs to re-think its strategy and invest significantly in a scheme that focuses on vulnerable households, working with local authorities and housing associations to improve the energy efficiency of the country’s aging housing stock.

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