The government today set out secondary legislation that will give industry the green light to bring the Green Deal energy efficiency market into operation, alongside measures to strengthen consumer protection, reduce industry burdens, and implement the Energy Company Obligation (ECO).
More and more families are being hit by the rising cost of gas and electricity, but inefficient homes are using a lot more than they need to. Millions of homes do not have full double-glazing. More than half do not have enough insulation or an efficient condensing boiler. Most do not even have proper heating controls. Overall leaky buildings account for 43% of the UK’s total greenhouse gas emissions.
The government-backed Green Deal programme is aimed to help bill payers make energy-saving improvements to keep their homes warm and cosy. With the Green Deal people will be able to pay for some or all of the work done with the savings expected to be made on energy bills. ECO, a subsidy from energy suppliers, will provide extra help for those most in need and for properties that are harder to treat.
These policies will boost the burgeoning low carbon economy by supporting up to 60,000 jobs in the insulation sector alone by 2015, up from around 26,000 today. They will empower consumers by giving them new ways of funding home improvements and empower businesses by enabling them to compete for energy efficiency opportunities in new and innovative ways.
In addition to setting out the parts of the framework that are already in place, today’s announcements give clarity to the market by detailing next steps to getting Green Deal and ECO rules set by October, including, in legislation to be laid later this week, ensuring support worth around £1.3bn a year to deliver energy efficiency and heating measures across Great Britain to help tackle fuel poverty and climate change. An increased focus on poorer areas should see an extra 100,000 households in low income areas benefitting each year, compared to our original proposals, bringing the total number of low income households and those in low income areas assisted to around 230,000 a year.
Energy secretary and climate change secretary Edward Davey said: “Today I have published the government’s detailed plans along with legislation that will allow the industry to bring the Green Deal into existence. The Green Deal will play a huge role in improving the energy efficiency of our homes and businesses, with ECO making sure that the most vulnerable homes benefit too.
“We have listened very carefully to what industry, consumer groups, and other organisations have told us. Broad support for a managed, tested and careful introduction of the Green Deal fits exactly with our objective to provide an excellent customer experience from day one and a market where a range of new players can readily participate.
“I am determined to make sure that, in addition to creating huge opportunities for Green Deal providers and businesses along with thousands of new jobs, this new market in energy efficiency will deliver the very best deal for consumers.”
Following consideration of more than 600 responses to the government’s November consultation on the Green Deal and ECO, full details of the final policy are set out in the response document published today.
This includes ensuring that robust consumer standards are met, creating a market that balances consumer protection and burdens on businesses. Changes include improved consumer protections such as restrictions on ‘cold calling’, and new rules requiring Green Deal Assessors to declare any commission they might be receiving for carrying out an assessment and any ties to Green Deal Providers. A change to the warranties proposal eases requirements on businesses to hold warranties for the length of a Green Deal Plan while maintaining robust minimum standards of protection for consumers, including 25 year warranties in the case of wall insulation. Improvements for behind the scenes operations make it easier for energy companies administering the Green Deal charging to deliver a smoother customer experience.
Changes have also been made to the ECO to include allow more hard-to-treat cavity walls to qualify for support, and to provide specific support for low income and rural areas. These changes will help the insulation industry, which has been supported by current schemes, transition successfully to take advantage of the new market opportunities created by Green Deal and ECO. An estimated technical potential of around 2.8million hard to treat cavity wall properties will now be eligible under the ECO.
The government has also confirmed it will introduce the Green Deal through supporting a responsible and controlled approach with full national systems testing. This is to ensure the market has the opportunity to build over the next eighteen months, meeting Government ambitions for a national energy efficiency retrofit across the next decade and beyond.
The Green Deal framework will be built on sound foundations, starting with assessors, installers and Green Deal Providers to ensure they are ready to start work in October. From August this year accredited certification bodies can submit applications to register with the Green Deal Registration and Oversight Body, and will then be able to register assessors and installers as ‘Green Deal Approved’. Similarly, potential Green Deal Providers will be also able to apply for approval. At the same time, new systems introduced by energy suppliers for the collection of the Green Deal charge will be robustly tested. This will ensure that preparations can be made ready for the next step: the signing of the first Green Deal plans in January 2013, from where the market for the Green Deal will continue to grow.
Today’s publications also include a final impact assessment and associated research, and confirm the appointment of Ofgem to be the ECO Administrator. Also today, guidance for industry sets out which measures will qualify for Green Deal finance and the ECO – 45 in all – providing clarity on which sectors fall within scope and underlining the opportunities for innovation enabled by the Green Deal.
The government will shortly announce the contract awards for the Green Deal Registration and Oversight Body and the Green Deal Ombudsman and Investigation Service function.