The Green Deal and ECO

Ian Chapman

Affordable Warmth Project Manager

What is ‘The Green Deal’?

• The Coalition Government’s flagship policy for improving the energy efficiency of buildings in Great Britain

• An innovative financing mechanism which allows consumers to pay back through their energy bills for upfront energy efficiency improvements to their home

• A financial obligation which is only paid whilst the benefits are enjoyed – when the bill payer moves out, the charges stay with the property

• Based on a key principle that energy efficiency related changes to properties pay for themselves, in effect, through the resulting savings on fuel bills

The Green Deal Process

ASSESSMENT

RECOMMENDATIONS

QUOTES

INSTALLATION

BENEFITS & REPAYMENTS

What is the Energy Company Obligation

• Not every household will be able to save on their energy bills by taking up a Green Deal plan, so there will be additional help for those who need it most

• The Energy Company Obligation (ECO) will focus energy companies on improving the ability of the vulnerable and those on lower incomes to heat their homes affordably, and on improving solid wall properties, which have not benefitted much from previous schemes

• The Obligation will require energy companies to support the installation of energy efficiency improvements to homes and will be designed from the ground up to integrate with Green Deal

• Support from the ECO funding will be a significant driving force, providing market certainty; promoting innovation and investment within the supply chains; and driving down costs and ensuring that all consumers really can improve their homes and benefit from the Green Deal

The Shape of ECO and Eligible Improvements

The expected investment from suppliers to deliver on their carbon reduction targets with three obligations:

Home Heating Cost Reduction Obligation (HHCRO) Is available to private tenure housing and will primarily install insulation

and heating systems

Carbon Saving Obligation Is available to any household and is targeted at delivering solid wall

insulation (SWI), insulation to non-standard cavity walls or hard to treatproperties e.g. three storey properties

Carbon Saving Communities ObligationIs available to any household and will target the installation of solid wall

insulation, loft insulation and cavity wall insulation to more deprivedcommunities

Ashfield District Council’s Business Case

The Affordable Warmth Team developed a Business Case for improving the energy efficiency of Private Sector Housing by utilising the Green Deal and ECO Funding. The business case focused on the following options:-

• A Green Deal Provider

• A Green Deal Partner

• A Green Deal Promoter

• The “do nothing” option

The Council adopted the Green Deal Partner model which involved the becoming an accredited Green Deal Assessor Organisation (GDAO) and procuring a Green Deal Provider as a partner.

Benefits of a Green Deal Partner • The Affordable Warmth Team is able to offer truly impartial Green Deal

Advice Reports (GDAR) • The properties that have measures (loft, cavity wall or external wall

insulation, etc) highlighted on the GDAR will be offered the opportunity to work with the Councils Green Deal partners to realise the measures.

• The homeowners that are ineligible for green deal approved measures funding will be informed of the any low cost measures available and energy saving advice

• The Team have the potential to earn income from “successful” referrals to the Delivery Partners.

• The data gathered as part of the GDAR will be used to populate the Councils database to offer a real time stock condition report.

• It will be left to the Green Deal/ECO partners to source all appropriate funding for the scheme and ADC will not be making any direct financial contribution to the measures

• The offer to residents will be ADC branded and delivered via private sector delivery partners.

Our Partners Ashfield District Council have procured two delivery partners, NWS Limited and Starfish Group Limited, who we have been working with access ECO funding and very soon we will be in a position to offer Green Deal Finance

Green Deal Approved

• Ashfield are an approved Green Deal Assessor Organisation with two full time employed Green Deal Assessors and a pool of sub-contract assessors

• We have procured to delivery partners to allow the residents to realise the recommended measures produced on the Green Deal Advice Report (GDAR)

• ADC receive £105 for each GDAR we produce that is implemented if at least one of the recommended approved measures is installed

• ADC receive £50 for Energy Performance Certificate (EPC) we produce and carry these out post installation

• ADC receive £50 for each referral we make to our procured contractors that implement a measure

Insulate Ashfield

Insulate Ashfield has been operating since November 2013 and will

run until March 2014.

To date the scheme has accessed funding to replace around forty boilers,

installed External Wall Insulation (EWI) to twenty properties and provided

energy saving advice to around 100 residents.

The Autumn Statement

Reforming Green Deal

Starting from January and then over the following months DECC proposed to make changes in three broad areas:

• Making Green Deal more accessible to consumers through improved information and signposting;

• Making it easier for firms to operate in the market; and • With the Green Deal Finance Company, making sure the

Green Deal  finance offer gives customers what they need

The Autumn Statement (Cont.)Reforming the Energy Company Obligation• Reducing the Carbon Obligation (CERO) target by 33%. The 2015 Carbon Saving

Communities (CSCO) and Affordable Warmth (AW) targets will remain the same. • Extending the ECO scheme to March 2017 with new targets for CERO, CSCO and

AW at 2015 levels. • Enabling energy suppliers to carry forward any over delivery against 2015 targets to

count towards their 2017 targets. • Allowing companies which have delivered substantial early progress against their

current CERO target to benefit from an uplift in scores for the measures delivered • Extending the CSCO element of ECO from the 15% to the 25% lowest areas on the

Index of Multiple Deprivation and simplifying the qualifying criteria. • Including District Heating as an allowable primary measure under CERO. • Including loft and easy to treat cavity walls as an allowable primary measure under

CERO. • Introducing and standardising measures to prevent fraud, particularly around loft and

easy to treat cavity wall insulation. • Introducing a solid wall minima set at 100,000 measures to be delivered by 2017

across all companies and all elements of ECO.

Changes to Green Deal Cash Back

• Green Deal Cash Back has been extended to the 30th June 2014

• Cash Back for some measures have been increased:– Solid Wall Insulation up to £4000 from £650– Room in roof insulation up to £1000 from £220– Double Glazing up to £650 from £220

• Cash back can only claimed back via a Green Deal Provider

• To avoid over subsidy, Councils who have been awarded the Green Deal Communities funding will not be able to offer cash back

• From April 2014 cash back will not be available to claim if taken alongside ECO.

• Cash back details from June 2014 onwards have yet to be announced

DECC Green Deal Communities

• Ashfield District Council have been formally offered £1.1m of funding

• The Authority is one of six Councils to be offered the funding to date.

• Proposals have been judged on: – The number and total value of Green Deal Plans to be delivered– Their sustainability in the long term – Their credibility; e.g. LA’s will need to have identified the

streets/areas to target– Their creativity in offering local incentives to drive demand for

Green Deal Plans – Consistency with state aid and procurement rules

Any Questions?

Ian ChapmanAshfield District Council

Affordable Warmth Team

i.chapman@ashfield-dc.gov.uk