Great Deals & Green Deals Andrew David Director. Content Who are we? Energy Company Obligation - ECO...
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Transcript of Great Deals & Green Deals Andrew David Director. Content Who are we? Energy Company Obligation - ECO...
Andrew DavidDirector
ContentContent
Who are we? Energy Company Obligation - ECO Green Deal Green Deal Cash-Back NEST Arbed Renewable Heat Premium Payment
Who Are We?Who Are We?An independent charity established in 1995Aims are to combat climate change and fuel povertyBased in Newport, but strong links with MonmouthshireLast year we spent £3.5M treating 1,543 homesReduced carbon emissions by 79,733 tonnesReduced energy bills by £287,000 a year, or £7M over
the lifetime of the measures.
Energy Company Obligation - ECO Energy Company Obligation - ECO £1.3bn a year to March 2015 across three Obligations
Carbon Emission Reduction Obligation – CERO – Not fully funded Anyone, anywhere, but restricted to solid wall and Hard to Treat cavity
wall insulation, plus some other secondary insulation. Likely to top-up Green Deal Finance to meet “Golden Rule” Better funding for Off-Gas properties.
Carbon Saving Community Obligation – CSCO – Not fully funded Anyone in the most deprived 15% of LSOAs, plus target for small rural
settlementsHome Heating Cost Reduction Obligation – HHCRO – Fully funded
Restricted to low income households on eligible income based benefits Includes all insulation plus new boilers or repairs and all renewables
(but unlikely due to cost effectiveness)
ECO – The DangersECO – The DangersTo manage it’s far more complex than previous CERT and CESP
schemesOfgem have introduced very tight claim requirements with
regard to:Promotion of the schemeRecommended measures – GDA or CSRInstaller competence – PAS2030Guarantees providedCarbon scores – EPR/RdSAPTiming of reporting
This rules out retrospective claims and exposes scheme managers to significant risk
Affordable Warmth EligibilityAffordable Warmth EligibilityPension CreditChild Tax Credit (and your income is £15,860 or less)Working Tax Credit (and your income is £15,860 or less) - plus one of the
extra conditions below Income Support - plus one of the extra conditions below income-based Jobseeker’s Allowance - plus one of the extra conditions below income-related Employment and Support Allowance – plus the support or
work related element, or one of the extra conditions below Extra conditions you’re responsible for a child under 16 (or under 20 if they’re in education or training) you get Disabled Child Premium you get Disability Premium you get Pensioner Premium you’re 60 or over (only if you get Working Tax Credit)
Green Deal and ECO Working TogetherGreen Deal and ECO Working TogetherInteraction between Green Deal Finance and ECO Subsidy“Golden Rule” Savings must be less that Repayments
Green Deal Finance
Measure fully meeting the “Golden Rule”
Full ECO Funding
Measures requiring subsidy to meet “Golden Rule”
ECO Subsidy
Measures providing Affordable Warmth for the vulnerable
Green Deal Green Deal Government’s flagship scheme to improve
26m homes by 2030.It’s not a grant, but a loan at commercial rates of interest Delivered by Green Deal Providers (the middle men who will
add their mark-up to the cost) Energy saving measures installed with no up front costs if
they meet the Golden Rule. Golden Rule states that the savings (theoretical, not actual)
are equal or greater than the repayments Costs paid back with interest @ 7% through electricity bill The loan stays with the propertyIf property is sold the new bill payer must take over the loanLoans can take up to 25 years to repay.
Green Deal MeasuresGreen Deal MeasuresThere are 45 measures or areas of home improvement
approved to receive funding under the Green Deal covering:insulationheating and hot waterglazing microgeneration (generating your own energy).For the non-domestic sector lighting, mechanical ventilation
and heat recovery measures can also be covered. More may be added as technology develops.
Green Deal MeasuresGreen Deal Measures Heating Controls Condensing Boilers Under-floor Heating Heat Recovery Systems Mechanical Ventilation (non-
domestic) Flue-gas Recovery Devices Loft Insulation Cavity Wall Insulation Flat Roof Insulation External Wall Insulation Internal Wall Insulation Draught Proofing
• Floor Insulation
• Heating System Insulation (cylinder, pipes)
• Energy Efficient Glazing and Doors
• Lighting Fittings
• Lighting Controls
• Innovative Hot Water Systems
• Water Efficient Taps and Showers
• Ground and Air Source Heat Pumps
• Solar Thermal
• Solar PV
• Biomass Boilers
• Micro CHP
Green Deal Cash BackGreen Deal Cash Back
Qualifying Energy Saving Measure (most common) Cash-back
Loft insulation £100
Cavity wall insulation £250
Solid wall insulation £650
Condensing oil boiler (from non-condensing) £310
Condensing gas boiler (from non condensing) £270
New or replacement storage heaters £150
Double glazing from single to A rated £20/m2 (up to £320)
• To secure the cash-back you must go through a Green Deal Provider and have a Green Deal Assessment.
• The assessment will typically cost between £99 and £150• The Green Deal Provider will add their mark-up to the install cost• May be cheaper to go straight to a good contractor and forgo the cash-back
• Government funded initiative to Kick-Start Green Deal
Green Deal Example 1Green Deal Example 1Installing External Wall Insulation in a 3 bed gas
heated semi-detached house
Green Deal
Installed cost (loan amount) £8,000
Interest rate 8%
Repayment time (years) – maximum allowed 25
Repayment added to electricity bill/ month £62
Total amount repaid £18,600
Amount of interest paid £10,600
Estimated saving on gas bill / month £25
Net saving / month -£37
Eligible for Green Deal? NO
Green Deal Example 2Green Deal Example 2 Installing a new Gas Boiler, Heating Controls and Cavity
Wall Insulation in a semi-detached bungalow
Green Deal
Installed cost – DECC’s figures £5,000 *
Interest rate 7.9%
Repayment time 12
Estimated Saving (Not guaranteed) £778
Repayment added to electricity bill per year £660
Customer can be better off each year by £118
Customer gets cash-back of £520, so Y1 saving = £638
Nice in Y1, but try and sell a property with £660 surcharge on the annual energy bill for 12 years.
* We can do it for just £2,500 outside Green Deal, so that does government out of £400 VAT and the £2,100 for the Green Deal Provider.
Green Deal PitfallsGreen Deal PitfallsQuestion - Can customers that take out a Green Deal Plan still switch energy supplier?Answer – Yes, providing that the new supplier is participating in the Green Deal payment collection mechanism. That could rule out switching to a smaller, but cheaper supplier.Question - Are there guarantees that savings will be achieved and the Golden Rule will be met?Answer - No, so Fuel Poor could even poorer; little saved and a large loan to repay. Question – Does Green Deal offer good value for money?Answer – Probably not, just do the sums.
Green Deal Disaster So FarGreen Deal Disaster So Far4 Green Deal Plans signed since JanuaryOnly 25,999,996 plans to go!Cavity wall insulation market has crashed
April 2012 – 40,000 installsApril 2013 – 1,000 installs
5,000 jobs gone, not 24,000 createdEd Davey predicted that by 2015, more than 1m separate
pieces of home improvement would be installed under the Green Deal. Somewhat ambitious!
Why the failure?Why the failure?The principle is good, but the execution is badIt’s too bureaucratic; there are 10 or more organisations
involved in each dealIt’s too expensive; as all of the organisations between installer
and householder must add their mark-upSavings are not guaranteed; so risk is with householderFinance @ 7% + £63 set-up fee + £20/year admin chargeIt’s too troublesome; as householder needs to get all
consents; planning, building control, party wall, etc.The only people making money are the unscrupulous traders
selling surveys to the vulnerable for the “Government Scheme”. They promise everything, but deliver nothing.
The Green Deal Process
NESTNEST
Nest is the Welsh Government’s fuel poverty schemeThe energy efficiency of the property is upgraded at no
cost to the occupierA whole house assessment is available to people who are
in receipt of a means tested benefit and living in the hardest-to-heat homes, being F or G rated
Measures are predominantly heating with some standard insulation and EWI
Available to owner-occupiers and tenants in privately rented homes.
NEST – Qualifying BenefitsNEST – Qualifying BenefitsBenefits are Income Based
Child Tax Credit: where the household money coming in is below £15,910 a year
Council Tax Reduction Scheme (reductions and discounts do not qualify on their own)
Housing benefit Income-based jobseeker’s allowance Income-related employment and support allowance Income support Pension Credit - savings and guarantee Universal Credit Working Tax Credit: where the household money coming in is below £15,910 a
year
Arbed 2 – “To Save”Arbed 2 – “To Save”• Welsh Government’s strategic energy performance
investment programme• £45m of funding from the European Regional
Development Fund (ERDF) and Welsh Government• It’s area based and only local authorities can apply• Will provide energy saving improvements to 4,790
homes (minimum 50% privately owned) at no cost• Concentrate on the most deprived areas of Wales• Reduce greenhouse gas emissions • Reduce the impact of fuel poverty • To create jobs for Welsh residents and economic
opportunities for Welsh businesses.
Renewable Heat Incentive & PremiumRenewable Heat Incentive & PremiumTo encourage the take-up of renewable heating systems in the
domestic sectorAvailable for all tenures, but not new-build (except self-build) Good for oil and LPG replacement in rural areasRHPP available now, RHI proposed for Spring 2014.
Air Source Heat Pump
Ground Source Heat Pump
Biomass Solar Thermal
Renewable Heat Premium Payment
£1,300 £2,300 £2,000 £600
Renewable Heat Incentive (P/kWh)
7.3p 18.8p 12.2p 19.2p
Confused ?Confused ?Just get in touch with us
Tel: 01633 223111Email: advice @sewenergy.org.uk
Visit: Clarence House, Clarence Place, Newport, NP19 7AA
Open weekdays 9am – 5pmAdvice is free and impartial