The Green Deal & ECO 8 Months In

Transcription

1 The Green Deal & ECO 8 Months In Presentation to Yorkshire Energy Services Event Richard Mellish, DECC 2 October 2013

2 Green Deal energy savings help pay for home improvements Green Deal helps people and businesses pay for energy efficiency improvements through savings on their energy bills. Green Deal is a new approach to retrofitting domestic and nondomestic buildings in Great Britain one of the Coalition Government s priorities An affordable way to improve and renovate millions of energy inefficient homes and businesses making them more comfortable and cheaper to run Innovative new finance mechanism, supported by a legislative framework that ensures quality work Here for the long term - decades, not years

3 Why are we doing this? With increasing world energy prices, market volatility and rising imports: energy efficiency never more important The cheapest energy is that we don t use: save money, make our homes more comfortable and cheaper to run; address fuel poverty; reduce overall demand for power UK must reduce carbon emissions. Our old and draughty buildings account for over 38% of them. The easy jobs are all but done success through bill-payer subsidy such as CERT. A step jump in scale and sophistication is needed for the remaining challenge In tough economic times, any subsidy must be better directed, to where it is most effective and most needed.

4 What s in it for customers? New way of approaching energy efficiency: whole house retrofit 45 improvements in total possible under Green Deal Cavity wall insulation Loft insulation Creating energy Windows Tackles two key barriers to energy efficiency action: - Who can I trust to do the work? - How can I finance it? Heating Solid wall insulation External doors Real choice. Customer in control. Many access points. Protection against future energy price rises Energy Company Obligation supports Green Deal

5 Simple customer journey 5 steps Assessment Recommendations Assessor gives impartial recommendations on what customers need Quotes Provider arranges quotes to customer, provides finance and arranges for installation Installation Installer installs improvements Benefits Customer enjoys benefits and pays provider over time through savings

6 Extra support: ECO Support for Solid wall insulation Hard-to-treat cavity wall insulation Easy cavity wall insulation Loft insulation Heating improvements Available to Anyone People living in low income areas (lowest 15%) People on certain income-related benefits in private housing People on certain income-related benefits in private housing Don t need to apply separately should be included when Providers make quotes Different Providers will have different offers customers should shop around Worth around 1.3 billion a year; comes from energy companies ( Energy Company Obligation )

7 Key Feature 1: Trust Assessors, Providers, Installers must be accredited Quality Mark to prove it Comprehensive advice so consumers consider all options not pressure selling of one measure Standardised advice to make it easier shop around Cooling off periods, protection against cold calling etc Insurance-backed guarantees in case of faulty advice or installation Single point of redress: the Provider Ombudsman to handle unresolved complaints

8 Key Feature 2: Finance The property owner can pay for some or all of the cost through a Green Deal Plan, collected as an integral part of the electricity bill Costs will vary from provider to provider shop around Maximum amount that can be borrowed, including interest, is determined by expected energy saving. Once plan is agreed, payments are fixed. Not a mortgage or a personal loan. If the homeowner moves out they stop paying. Green Deal Finance Company a private sector mutual offering finance at 6.96% (+ fixed admin fees) to providers. 15 investors including DECC and GIB. Customers can still change their electricity supplier

9 What s in it for industry? Beyond the major energy suppliers: market opening empowering new businesses, particularly small firms in the supply chain, to enter and to innovate Expected 10bn private sector investment in the next decade Green Deal anticipates a doubling of jobs in insulation alone to 60,000 by 2015 Many entry points to the market. Different business models emerging - Fully integrated one stop shop - National Brand with subcontracted delivery - Merchant or trade body with local SME delivery - Local brand (LA) with subcontractor delivery

10 Scope of DECC s Role Demand and Marketing 23m Financial support to 8 Core Cities 39 LA Consortia 125m Green Deal Cashback 2.9m Green Deal With It Campaign Legislation Green Deal and ECO Framework Managing and Supporting the Framework Oversight Body OFGEM ECO administration GD Ombudsman CD Central Charge Database Testing and assurance ECO Brokerage GD Providers and Finance GDAA in force GDFC operationally live 244m stakeholder fund DECC, GIB, EIB investment Testing systems Setting Standards for Participants Training for assessors and installers Code of Practice & Quality Mark Standards and Assessment Tools Advice ESAS National Energy Saving Advice Service

11 Early days; encouraging progress Supply Chain is Growing. As of end August: 101 Green Deal Providers approved 1,662 Installer organisations registered 269 Assessor organisations registered, employing 2,332 assessors Market is Building 71,210 Green Deal Assessments 173,496 homes supported by ECO to end July 205m of contracts traded on ECO brokerage Bilateral deals between energy companies and delivery partners for ECO 677 Green Deal Plans between quote accepted and installation

12 Our research on assessments Are assessments valuable? 78% said assessments highly useful 82% had confidence in the recommendations 72% said they would recommend to a friend Are people taking action following assessments?

13 What s happening now? Green Deal is a long term programme. We expect to help it develop. It is about installation of measures through the best funding route for consumers We want all the systems and processes to be as efficient and effective as possible for industry and consumers We are adapting our signposting for consumers (search tool and ESAS) We want more blending of Green Deal and ECO We may do more marketing and want to help more Providers get active We are looking at the customer journey and assessments