Gearoid Lane, Chief Executive Officer, AgilityEco
Gearoid's guest blog for INCA, the Insulated Render and Cladding Association. This blog first appeared on INCA's website on 8 December, 2016.
AgilityEco has been proud to support INCA in championing the Solid Wall Industry’s cause with government. We recently supported INCA in formulating its response to the ECO “Help to Heat” consultation and over the course of that work we spent time with a number of BEIS officials and analysts to really understand, and question, BEIS’s assessment.
AgilityEco and INCA’s shared message has been crystal clear from the outset: solid walled homes, which house many of Britain’s poorest and most vulnerable residents MUST be prioritised in government energy efficiency policy.
As we’ve said previously, we see SWI as the key to combating fuel poverty. There are more than 8 million solid walled homes in Britain, a third of all of our housing. Nearly half of those in fuel poverty live in solid walled houses. Uninsulated solid wall properties are highly inefficient, typically leaking twice as much heat as cavity walls, resulting in extremely high fuel bills for their occupants. SWI therefore delivers huge benefits for those living in solid wall homes (average annual savings of £490 per annum compared to £140 for cavity wall insulation), benefits that have not been delivered at any scale under successive supplier obligations, despite these households contributing hugely to the cost of those schemes. Moreover, owners (particularly social landlords and private householders) have been willing to make significant contributions to the cost of SWI works, keeping the cost to all energy bill payers down. SWI results in significant job creation, delivers huge benefits to the exchequer (multiplier effect), whilst providing significant social and housing regeneration benefits.
We made our case to BEIS in September this year and in particular, we focused on two key arguments. Firstly that BEIS has overestimated the cost of delivering the obligation, and therefore the level of ambition should be significantly ramped up and secondly, ECO cannot deliver on its stated aim of tackling fuel poverty without a greater focus on solid wall insulation. Since then, our evidence, particularly in relation to cost, has gained real traction around the industry and has been echoed by other industry associations and lobby groups.
The industry is still eagerly awaiting the outcome of the consultation, which we’re hearing may be published just before Christmas, or may unfortunately slip into early January. In the meantime, we are getting some encouraging intelligence that our messages have been heard and the overall target will be increased, although the size of the increase and how much it is targeted onto solid wall insulation remain to be seen. It also seems likely that the “Affordable Warmth” part of ECO (the bit which is focused on the fuel poor), may be reduced as a proportion of the overall target on cost grounds.
We suspect that BEIS will, at best, go partway towards our request to double the ambition for solid wall insulation under ECO. However, the bigger prize lies further down the line in April 2018, when we move from the one-year ECO Transition period into the four-year Fuel Poverty Obligation period.
To win the argument for higher ambition under ECO, we need transparency on the cost of the obligation to energy suppliers. In delivering price transparency, we believe that ECO Brokerage can play a key role. Signs have been encouraging in recent weeks, with a modest increase in activity. It is worth noting that several lots have already traded for delivery during the ECO Transition period, and at prices significantly below BEIS overall cost estimates – providing further evidence in support of our case.
However, if BEIS really does want to ensure that the Fuel Poverty Obligation is as ambitious as it can be within the overall budget constraints, it should do more to encourage or mandate energy companies to use ECO Brokerage. We suggest that a message is given to energy companies that the prices at which ECO lots are traded in Brokerage will be used heavily to set the cost assumptions for the Fuel Poverty Obligation. We have no doubt that if this were done, energy suppliers would start to give ECO Brokerage the attention it deserves.