Energy efficiency: previous failures help new initiatives

Staying power

18 January 2015

Abdul Choudhury discusses how the failures of previous energy efficiency policies can help to inform new initiatives

By ceasing funding of the Green Deal Finance Company, the UK government essentially scrapped the previous administration’s ambitious flagship energy-efficiency programme (see Building Surveying Journal October/November).

However, the second energy-efficiency policy, the Energy Company Obligation (ECO) scheme, will continue to provide support to low-income and vulnerable households, having delivered 97% of home improvements over the past two years. A replacement for the Green Deal will likely draw on experience from both policies.

Carbon cut targets

The Green Deal was designed to deliver legally binding carbon reduction targets and tackle issues such as fuel poverty, rising prices, pressure on resources, energy security and economic growth. The scope of its ambition was summed up by Greg Barker, the former Minister of State for Climate Change, who hoped that it would reach 14 million homes within the decade.

However, in terms of performance, from its start in 2013 to March 2014 the total number of Green Deal plans was just 2,000 and Green Deal Assessments 188,234, making it very unlikely that the ambitious target can be reached. Although well intentioned, the policy was not that ‘green’ or really a ‘deal’, as high interest rates for the loans and issues with delivery of energy and cost savings has demonstrated.

As of April 2018 the government will make it unlawful to rent out a house or business premises with less than an E energy efficiency rating

The link to related policies such as Minimum Energy Efficiency Standards (MEES) was tenuous, and the change also put this initiative under threat. Introduced in the Energy Act 2011, as of April 2018 the government will make it unlawful to rent out a house or business premises with less than an E energy efficiency rating, meaning that at least 682,000 properties will have to be improved. This was also to be underpinned by the Green Deal, which serves as a backstop mechanism for improvements and is now possibly under threat.

Furthermore, as of April 2016, landlords would not have been able to refuse reasonable requests from tenants or local authorities acting on their behalf to improve their property up to Green Deal standards. Without these duties, there are no policy incentives or mechanisms in place to support the private rented sector in improving its energy performance.

The independent review

The government is working up an alternative to the Green Deal for domestic properties and has commissioned an independent review led by Peter Bonfield, Chief Executive of BRE Group, to look at standards, consumer protection and enforcement of energy-efficiency schemes.

At a recent review workshop, clear concerns emerged around skills and quality control. This suggests a replacement scheme may attempt to address earlier shortcomings.

On the skills front, assessment and advice on home improvement measures was felt to be inadequate. This led to the installation of inappropriate measures that did not deliver the level of savings necessary to pay for themselves.

Moreover, there was a lack of understanding on the impact of different alterations and how they interact. In a sense, the assessment amounted to a simple exercise in data capture.

This, in turn, had a direct impact on the quality of measures installed, again impacting on performance and savings. Reflecting the need for continued quality assessment throughout the installation process and beyond, the upfront costs are likely to be higher.

Skilled professionals

There are, of course, professionals with the skills and experience to carry out such work effectively and ensure quality, but not nearly enough.

The government’s recent announcements on funding for apprenticeships present a real opportunity for industry to grow and meet the challenges ahead. However, given the uncertain nature of energy policy over the past few years, commitment is hard to guarantee.

The need to improve energy efficiency in the UK’s housing stock is of vital importance if the country is to meet its carbon and energy reduction targets. To maintain the existing stock of poorly performing buildings, ways must be found to make them fit for purpose.

Currently, the crux of the issue is the lack of conviction and clarity in policy. Amid this level of uncertainty, industry cannot take the necessary steps to prepare for the future or to grow the energy-efficiency sector and the skilled professionals that go with it.

Abdul Choudhury is RICS London Policy Officer

Further information