Cavity wall insulation is a great way to increase the energy efficiency of your home – and increased energy efficiency means lower energy bills.
Until relatively recently, pretty much everyone was entitled to free cavity wall insulation. However in the last few months things have changed slightly.
The reason for this is that cavity wall insulation installers are paid via a scheme known as ECO. Basically installers get paid an amount per tonne of carbon saved. This sounds a bit ridiculous, but imagine your home uses a certain amount of energy for heating – once the cavity wall insulation is installed, the amount of energy the home uses should drop because there is less heat loss. This saved energy is converted to carbon tonne savings (gas produces CO2 when it burns).
Typically, bigger houses will tend to see greater energy savings when the cavity wall insulation is installed.
big house – 10% saving of 45,000kWh of gas is 4,500kWh
small house – 10% saving of 17,000kWh of gas is 1,700kWh
This means the amount of funding a larger property gets will tend to be bigger than a smaller property. The same is true when a property has a very old boiler, the savings are greater in these types of home.
ECO rates have dropped
The reason that 100% free cavity wall insulation doesn’t really happen that much any more is that despite the carbon savings being the same as they have always been, the rates the cavity wall installers are paid per tonne of carbon saved have dropped considerably.
Imagine an average cavity wall job costing £1,000 on a 3-bed end of terrace property. Previously, under ECO, the installer would have been paid £1,500 to carry out the install and hence this was 100% free for the homeowner.
Now though, the installer may only be getting £500 from ECO funding, so to cover the rest of the job they need a homeowner contribution.
Homeowner contributions for cavity wall insulation
As we have hopefully explained clearly above, it is rare now for a house to get 100% funding for free cavity wall insulation. Instead, the household will have to make some contribution to get the insulation installed. How much is entirely dependent on the energy performance certificate carried out by a qualified energy assessor – this will all be calculated by the cavity wall installer who will pay for an assessor to carry out this report.
The difficulty is that the homeowner contribution can vary from house to house; so while your next door neighbour (with a bigger property and more wall to insulate) may only pay £200, you could be given a quote for £500 or more. The key though is to find a good tradesman.
Avoid cowboy cavity wall installers!
Cavity wall insulation is a fantastic energy saving solution and is installed on millions of properties across the UK, however it is does not have a 100% success rate. There are some cavity walls that should not be filled with cavity wall insulation, regardless of whether the energy savings make it an attractive proposition. Properties that are privy to driving rain, or that are located on the coast, should not have cavity wall injected into the void between the skins of brick.
Most installers would know not to install cavity wall insulation where it is not suitable. Others, often desperate for work, will not make you aware of the potential issues that may occur further down the line. Unfortunately there are lots of unscrupulous ‘cowboy’ installers out there, so the key is to avoid them and only get good qualified tradesmen.
How to ensure you are getting good quality free cavity wall insulation
The number one thing you need to do to ensure you are getting a highly rated installer is to check whether the company offering you free cavity wall insulation has the Green Deal Quality Mark and PAS2030 processes in place.
PAS2030 is the certification that a company needs to carry out work under ECO scheme and will provide you with the guarantees and piece of mind that the work will be carried out to a high standard. For any company to achieve the PAS2030 mark of quality, they will need to have gone through rigorous testing to ensure their business practises are up to scratch, helping avoid the prospect of cowboys. Unfortunately, even PAS2030 doesn’t completely remove cowboys but it should certainly help!
If you do want to get a decent installer you may wish to ping us through your details below:
We only work with PAS2030 installers and we seek feedback on all our installers ensuring they know what they are talking about!
Interested in learning more about the funding streams within ECO? Read on to learn more!
HHCRO, CSCO and CERO
So ECO works on the energy savings from your home. However just to complicate things, there are three different streams of ECO funding – HHCRO, CSCO and CERO.
ECO is designed to address two areas: one, to help vulnerable members of society meet the rising cost of energy prices by increasing insulation and offering more efficient sources of heat; and two, to help make more expensive measures like insulating solid and hard-to-treat wall insulation more cost effective. HHCRO addresses the first area while CSCO and CERO address the second.
Postcodes and Free Cavity Wall Insulation – CSCO / CERO
Some houses in the UK fall into CSCO / CERO postcodes – these areas are eligible for cavity wall insulation grants. The properties are situated in areas of low income, vulnerable households in rural areas or the properties are identified as hard to ‘hard to treat’ (e.g. thinner cavities).
You can use the link below to see if your property falls into one of these areas:
Currently, around 25% of properties fall into the postcode area, but even if you are in those locations, you may still need to make a contribution depending on the carbon savings resulting from the install of cavity wall insulation.
Qualifying for Free Cavity Insulation through Income – HHCRO
There is another avenue of ECO grant funding based on your circumstances; this is called the ‘Home Heating Cost Reduction Obligation’ (HHCRO), or Affordable Warmth. If the householder is on income support (with related top-ups), receives pension credit or tax credits, you could be eligible for free insulation. In this instance, all that is required is an Energy Performance Certificate (EPC) on the property, and you will also need to provide proof of your entitlements.
Paying for Cavity Wall Insulation
If you know for a fact that you don’t qualify for insulation through any of the means mentioned above, you can still get it installed; and after loft insulation, it offers one of the fastest returns on investment.
Green Deal Home Improvement Fund GDHIF
May 1, 2014
UPDATE: As of 30 March 2016, the government has stopped funding and the Green Deal Home Improvement Fund is closed to new applications. You can read about it here.
GDHIF is relaunching on the 10th December 2014 at 9am
The original GDHIF scheme was so popular, the funding lasted just 6 weeks, however the great news is that GHDIF is set to return!
What is the Green Deal Home Improvement Fund?
At the end of June 2014, the existing Green Deal Cashback scheme was replaced with the new Green Deal Home Improvement Fund (GDHIF). The GDHIF launched at the beginning of June 2014, meaning there was a little overlap between the two schemes. Unfortunately, due to the generous nature of the funding, it lasted a mere 6 weeks, allowing only very few people to take advantage of the scheme.
Good news though, it has now been announced that the Green Deal Home Improvement Fund is due to reopen from 10th December 2014 at 9am.
Under the revised scheme, there is one headline change that has been made – the amount available for the installation of solid wall insulation has dropped from £6,000 to £4,000 so not quite as good, but still definitely worth considering. Also under the old scheme it would cover up to 75% of the job, now it will only cover 67% of the job.
The maximum grant therefore available to households in the new version of the scheme is £5,600.
The details of the revised GDHIF scheme can be seen below.
Eligibility Criteria for the GDHIF Scheme
To be eligible for the Green Deal Home Improvement Fund, the customer must:
Be a householder living in either England or Wales (it is open to both homeowners and landlords (private and social)
Have a Green Deal Assessment carried out within the last 24 months, and therefore in possession of the Green Deal Report (there is a £100 rebate for Green Deal Reports).
The Green Deal Report must include the recommendations that the household wants to install.
The application for the cashback must take place prior to any works being installed.
Not receive any ECO or other Government Funding (although you can take out Green Deal finance with the GDHIF).
When applying for the cashback, you must have received a quote from a Registered Participant for the Installation Work which includes name, address, the installation company as well the cost of the works.
What type of energy efficiency measures will the Green Deal Home Improvement Fund cover?
Nothing is new in this respect if you are already well informed about the Green Deal – as you will know it will allow you to pay for things like energy efficient boilers, heating controls, solid wall insulation and double glazing. The surprising exclusion from the list of measures included in the GDHIF is loft insulation.
How much cashback can I claim under the Green Deal Home Improvement Fund?
There are two core offers under the relaunched GDHIF incentive scheme which are detailed below, but you can take out both core offers together and therefore potentially you may be eligible for £5,600 in total.
GDHIF Core Offer 1:
Customers installing solid wall insulation (internal or external) are eligible to claim up to 67% of the installation cost up to a maximum of £4,000. For example if the works cost £3,000 in total – they would be eligible for £2,000 cashback and have to fund the other £1,000 out of their own pocket or via Green Deal finance. If the works cost £6,000 then they can claim the full £4,000 cashback and therefore will just need to fund £2,000.
In order to claim the cashback on GDHIF Core offer 1, the home must have at least 50% of the external heat loss walls insulated (i.e. there is not heat loss between terraced houses, so only the front and back need insulation) – 50% of this would need to be down to get the cashback.
GDHIF Core Offer 2
Core offer 2 is focused on the more traditional energy efficient measures but requires at least 2 measures to be installed from the list below. Customers can claim up to 75% of the combined installation costs up to a maximum of £1,000.
Energy Efficient Measures Included:
Condensing mains gas boiler (one only)
Cavity Wall Insulation (at least 50% of the external wall)
Secondary glazing (at least 50% of the glazing)
Double / Triple glazing (when replacing single glazing – and at least 50% of the glazing)
Flat roof insulation (total area of all flat roof)
Replacement warm-air unit
Fan-assisted storage heaters (at least three)
Energy Efficient replacement doors (at least two)
Floor insulation (at least 50% of the ground floor)
Room-in roof insulation (100% of roof area)
Waste water heat recovery
Remember you need to take 2 of these measures to claim back any cashback!
Bonus GDHIF Offers
There are also two bonus offers provided you either take core offer 1 or core offer 2.
1. GDHIF Home Buyers bonus – £500
If you have purchased your home in the last 12 months you are entitled to an additional £500 cashback as a one off bonus.
2. GDHIF GDAR Bonus
The Government are keen to encourage homeowners to take out full Green Deal Assessments, therefore customers can claim up to £100 towards the cost of the Green Deal Assessment.
How do I apply for the Green Deal Home Improvement Fund?
Well, the best thing to do is to have a Green Deal Assessment – because having this on your property will mean a qualified surveyor can tell you all about the additional measures and funding streams that you can access via the Green Deal, such as Green Deal Finance.
A Green Deal Advice Report will also provide you with the necessary paperwork to submit your Renewable Heat Incentive (RHI) application. So if you are installing Solar Thermal, an Air Source Heat Pump or Biomass boiler this report is needed
More good news! Although an Green Deal Assessor Organisation like ours would charge £132 (including VAT) for this assessment you can actually claim back £100 off that cost if you go through with the scheme and get measures installed resulting in a cost to you of just £32!
The other way is simply to use an EPC, however it needs to be less than two years old – the issue is that the EPC software automatically calculates the recommendations on the report. With a Green Deal Report, your assessor can select the measures you want installed – so for example if you need a new boiler, but it relatively new so there is little efficiency gain, an EPC would not recommend this, but a Green Deal Report can over rule the recommendations and recommend it regardless.
What happens next with the cashback process?
You will need to have your property assessed and any recommendations that come up on the Green Deal Assessment report or the EPC can be used to claim the cashback (subject to the conditions listed above).
You can then contact a Green Deal Provider or an Installer to facilitate the installation and registration process. Please note the Provider or the Installer have to be Green Deal Registered companies, so you cannot claim cashback from an installer down the road, unless they are PAS2030 certified. You can however claim cashback from any registered Green Deal Provider.
Our view is that it is probably still best to deal with a Green Deal Provider, in particular if you are looking to combine the energy efficiency improvements, because the Providers will have access to a wide network of trained installers, so will not only deliver you a boiler, but loft and solid wall insulation as well.
Also an Provider can give you additional funding via Green Deal Finance, which will mean that you will need to pay less out in upfront cost towards the cost of the job.
Is the Green Deal Home Improvement Plan a game changer?
We think that increasing the amount of funding available to home to get energy efficiency measures installed is a fantastic thing. The Green Deal, as it was set up, should be delivering insulation as well as upgrades to heating and renewable systems simultaneously as this is proven to be the most effective may of improving a property.
The key thing here is to make sure that as a nation we insulate and bring the heat demand of our homes down, whilst operating highly efficient heating systems. Combining the energy efficiency improvements in a multi-measure approach is the key to keep costs down and keep it simple for the customer, and the additional cashback now available should help to facilitate this.
Think we missed something? Do you have a different opinion?
Comment below to get your voice heard…
Can I still get a grant for a free boiler?
April 16, 2014
UPDATE: As of 30 March 2016, the government has stopped funding and the Green Deal Home Improvement Fund is closed to new applications. You can read about it here.
Can I get a grant for a boiler replacement?
Can I still get a grant for a free boiler?
For many years, the Warm Front scheme helped disadvantaged and vulnerable members of society get a new boiler and up to that point it was free. The scheme worked really well, but because it was funded directly by the government, it was deemed not to be cost effective and was subsequently scrapped in favour of ECO and the Green Deal over a year ago.
So have we seen the death of completely free boilers under ECO?
When companies are offering a ‘free’ deal, is the boiler really free?
Are companies offering grants for boilers and asking for a contribution actually con artists?
We answer these questions below, and show you how you could benefit from the new ECO / Green Deal scheme.
Is ECO the new Warm Front?
The Energy Company Obligation, or ECO as it is more commonly known, is a legal obligation placed on the larger energy suppliers (British Gas, Npower, E.ON, SSE, etc.) to deliver energy efficiency measures to domestic energy users. To you and me this means they are obliged to pay money that will help provide grants towards boilers and loft and cavity wall insulation.
One stream of the ECO funding is known as HHCRO (Home Heating Cost Reduction Obligation) and is specifically set aside to help vulnerable people get their old boilers replaced.
When the scheme launched in early 2013, there was sufficient funding to cover the entire cost of the boiler install for the majority of homes, hence companies were offering ‘free boiler installs under ECO’.
Since the beginning of 2014, the market has changed and installers are getting less and less per installation, which means that in most cases they don’t have enough funding to help pay for the boiler outright and therefore customers are being asked to contribute towards the cost of installation.
How do they calculate the grant funding for new boilers under ECO?
To explain further, the grant money an installer receives is based on the energy savings made as a result of getting a new boiler installed. This not only depends on how old the boiler is that is due to be replaced, but the size of the property and the build type.
For example, installing a new boiler in a large 4 bedroom property will result in far higher energy savings than a small 1 bedroom flat. This means there is a preference to install boilers in larger properties because the installers will get more funding and therefore they don’t have to deal with the difficult situation of asking the customer to contribute.
This is why we have seen some customers who live in smaller properties having their ‘free boiler’ installation date announced then cancelled, without any explanation of why they are no longer getting it – the installers have simply moved onto the more profitable jobs.
People don’t understand why they get the installation refused whereas a friend or neighbour in another part of town has had the installation absolutely free.
This has made a lot of people angry and disappointed and we have certainly spoken to people who have concluded that the ECO free boiler scheme is nothing more than a scam!
Do we think the process has been unfair up to now? Absolutely!
Do we think installers and companies promising free ECO boilers should be more upfront with customers how this process works? Absolutely right!
The good news is that the government has extended (Dec 2013 announcement) the bit of ECO that guarantees a grant for boilers for the most vulnerable members of society right through until 2017.
The bad news is that the grant in most cases will not cover the full install cost of the boiler; it will however make a significant dent in the amount you need to pay.
Perhaps more worryingly, vulnerable customers will still be attached to the whims of the energy companies and these rather complex delivery targets that too few understand.
There are certain target figures they need to achieve, and when these targets are reached, the funding will cease or rapidly reduce. Where will this leave the millions of vulnerable customers this scheme is there to help?
If you look at the graph below from OFGEM (the industry regulator), you will see that in November 2013, 73% of the funding for boilers had been used up, and by February 2014, it was extremely difficult for a new customer to get a boiler under the scheme, simply because the money available was, for all intents and purposes, gone.
Bear in mind that the winter just gone was one of mildest winters in a long time – if we have a really cold winter next year, there could be some serious repercussions for those unable to afford a new boiler.
How does ECO boiler grant funding work today?
We are now seeing the environment for these grants changing on a weekly basis.
For instance, some installers are able to get something called a ‘fixed rate’, whereby they receive the same funding for any type of property (no matter the size) as long as the average savings they submit for a group of properties adds up to a certain target figure.
This will mean that each householder will get the same amount of grant money, with some contribution perhaps having to be made depending on the cost of the specific job.
Other installers (as before) allocate the grant based on the saving made by each property. This means that some properties will get completely free boilers, while others will have to contribute a lot of money or be refused the job.
The first method can be very complicated and in the end it may still exclude some people. For example, if the job is complicated (i.e. the boiler needs to be moved) then the costs will add-up and the grant will simply not cover the installation costs.
The second method as mentioned before is unfair and many with smaller properties lose out because they will receive very little funding.
The future of ECO – combining with the Green Deal?
[Update: the Green Deal scheme has now finished.]
The Green Deal, which is the Government’s flagship energy efficiency scheme and available to all, is designed to reduce the up-front cost of measures like new boilers by providing finance at competitive rates that can be paid back through the electricity bill with the savings you make from the measure.
It was actually always intended to work with standalone or side-by-side the ECO grant scheme (to those that are eligible), however recent evidence suggests a lot more work needs to still be done here.
For example, in a scenario where the customer who can get the boiler grant is being asked to pay £1,000 up front towards their new boiler because their ECO grant does not cover the cost, it may be very attractive.
The cost of the job is £2,200 for a boiler install where ECO will pay for a hypothetical £1,200 as a grant. The customer cannot afford £1,000, but because the savings made will be substantial, the Green Deal could pay for the difference – assuming the customer is ok to take out the Green Deal Finance loan, paying it back through their electricity bills.
In this ideal scenario the customer can get a relatively low cost boiler install that they would not have been able to afford using just one of the schemes.
Company websites offering free boilers – is this a scam?
In a landscape where the funding tends to be stretched with more and more middlemen in the market distributing the funding, it suggests the customer will get less and less at the end of it. Our view is that the days of grants covering the cost of completely free boilers are probably gone.
The customer needs to be very careful as there are companies out there that ask for money upfront and promise the earth and don’t respond to calls after this has happened.
To avoid this, ask the operative some more information. For example the customer will need to be assessed first by a qualified Energy Assessor. They will walk around the property taking various measurements and produce an Energy Performance Certificate (EPC).
The assessor will take photographs of the property’s walls, the boiler, windows, loft insulation to work out how much cost the property could save with a new boiler. They will also ask for proof of tenure and take copies of the qualifying benefits. Don’t worry – this is quite normal.
An assessor may ask for a call out charge, which should be the cost of producing an EPC but no more. This is only to cover their time to make sure you qualify. But this should be no more than £50 – £60. Not £100s, as some companies have been found charging!
The installer of the boilers will have to be a PAS2030 qualified Green Deal Installer – licenced to carry out installations on behalf of this Government backed scheme. Make sure you always ask to see the ID of any of these people before inviting them into your property.
UPDATE: As of 30 March 2016, the government has stopped funding and the Green Deal Home Improvement Fund is closed to new applications. You can read about it here.
When the Green Deal launched in early 2013, it had set the ambition of being the biggest retrofit buildings programme since World War Two; however the recently released Green Deal take-up figures from the Government have shown that thus far, this is definitely not the case!
Will then, the Green Deal be a bit of a damp squib and be confined to the dustpan of legislation programmes or is the sluggish start just like a longish runway before eventual take-off?
In this blog we explore some of the most typical questions that consumers are interested in when it comes to this programme and we provide our own view of how we have seen the programme roll-out over the last year or so.
Is the Green Deal Free?
One of the criticisms of the Green Deal is the initial cost of getting an assessment. Unfortunately, getting independent advice from a company not aligned with a Provider is going to cost you money. There is no government money towards getting a free or cheaper assessment.
Some customers who fall into certain benefit groups and those in certain postcodes, who have clear need of ECO funding towards a measure such as cavity or loft insulation, or a new boiler, could get a free assessment as part of this process, but it does not apply to everyone. You can give us a call or an email if you think you may qualify for a free assessment in this way.
So is the Green Deal worth it?
Having said that there is a cost involved, we think the cost of the assessment should be seen as more of an investment. Chances are you will find out about measures you can install or little things you could do that will save you many times the assessment cost in the long run. We find that customers who approach the assessment as a learning and fact finding experience get more out of their assessment. Just make sure you ask lots of questions when you meet your assessor. If they don’t know the answer, they will find out for you.
Is the Green Deal Interest Free?
No. There is a fixed interest rate attached of around 7-8% APR. This means that if you can afford to pay for the work up front, it will be cheaper for you in the long run. If you can’t however, the Green Deal is a one way of securing the funding before getting the work completed.
Where can I find Providers?
We are obligated to direct you to the Green Deal Orb, which has a list of all accredited providers, installers and assessing organisations. Unfortunately, the way the scheme works means that many companies claim to be nationwide, or say they can install any measure, because it allows them to generate leads that they can sell on.
This means that the providers that really do offer what you need can be tricky to find. We recommend that you ask your assessor for several local Green Deal Providers you can contact – as this can really expedite the process and ensure that the companies you are contacting really do offer the service they claim they do.
Why can’t I Find a Company that does the energy efficiency measure that I want on the Green Deal?
Many Green Deal Providers tend to focus on a few key measures that they can deliver, like wall insulation, or boilers. That is why it is worth ringing around to find a Provider that can help you. Unfortunately, there are some areas of the country and some measures which are as yet not covered by the Green Deal – it is really worth asking your assessor what measures are currently covered in your area and what you may have to get done privately.
If you are after something specific, it is really worth trying to find a provider that will do the work before you go for your assessment.
The Green Deal Favours certain Technologies
The Green Deal is great for more cost effective measures (for example loft insulation), since it has a low initial install cost and creates big yearly energy savings.
When we get customers ringing who are looking for something like double glazing that is not really cost effective (savings are minimal and the cost of installation is high), we will normally advise them the Green Deal may not be for them – since the amount of finance they will have access to will be negligible.
A good Green Deal Advisor Organisation (and we include ourselves here) should give you an honest appraisal over the phone – if they promise you the earth, it is often to good to be true!
Is it true that Green Deal cashback is set to finish in early 2014?
The Green Deal cashback scheme is not finished yet! The government recently announced that the cashback scheme would accept applications for cashback until at least June 2014, so there is still plenty of time to take advantage.
Be aware however, some providers are not setup to do Green Deal Cashback. It is really worth finding a Provider that does, because you can get paid up to £1,000 for installing some measures.
The Government also announced the amount of cashback available under the Green Deal has increased – you can find more out on this here.
Any other questions about the Green Deal?
If you have any questions about the Green Deal, Energy Efficiency or Self Generation, please do get in touch on 0208 144 0897 or email@example.com.
Changes to the Energy Company Obligation
December 6, 2013
What is the Energy Company Obligation?
The Government has announced this week that it is to change one of its key components of domestic energy policy, the Energy Company Obligation (ECO). This change comes only a year after the scheme was launched and is the result of aggressive lobbying from the energy companies.
In May 2010 the Coalition pledged to become the ‘greenest government ever’, and since then it has tried to live up this pledge by implementing schemes such as the Renewable Heat Incentive (RHI) for both commercial and domestic properties and the Green Deal & ECO. However, the Government has already been accused of watering down these fledgling ‘green’ policies.
To those reading this who are unaware of what the Green Deal and ECO are; put simply they are the two schemes (that can be used in conjunction with one another) that are charged with making homes more energy efficient. They allow households to improve the energy efficiency of their homes without have to make any big up-front investment and in some cases measures can be installed completed free of charge.
The Green Deal part is for those homes that want to increase their energy efficiency but don’t have the funds to necessarily do this straight away. The Green Deal allows homeowners to take out a fixed loan that they repay back through the savings they make on their electricity bills; whereas ECO is the grant component funded by the energy companies that fully or partially pays for energy efficiency measures. It can work standalone to help pay for insulation and new boilers for vulnerable members of society or partially subsidise Green Deal measures like solid wall insulation, which would otherwise be too cost prohibitive in the free market.
Where ECO gets a bit more complicated is that it actually has 3 components: Home Heating Cost Reduction Obligation (HHCRO), Carbon Saving Community Obligation (CSCO) and the Carbon Emission Reduction Obligation (CERO) – this year the Government committed to £1.3bn of home improvement funding and the energy companies were obligated to pay for these improvements.
In the following sections we look at the changes the Government are making to the ECO scheme.
Changes to ECO – impact analysis
Home Heating Cost Reduction Obligation (HHCRO)
This part of ECO is designed to help the most vulnerable members of society get insulation and cost saving heating measures to be installed. So for example if you are on pension credit you may be eligible for a free boiler replacement as well as loft and cavity wall insulation – this is subject to a detailed eligibility assessment.
Impact of policy change: the Government has committed to maintaining the funding levels for this particular obligation and has even gone as far as extending the funding at the same level for a further two years (until 2017).
Although on the face of it, there is no change to this element of ECO, we are awaiting news on whether the funding will move from an obligation on the energy companies to general taxation.
Carbon Saving Community Obligation (CSCO)
This particular obligation was set-up to assist with insulation measures for some of the most deprived areas of the country as defined by the ECO order. So in practice if your postcode is in one of these LSOAs (sub-division of a district), then your home may be eligible for free insulation such as loft, cavity and solid wall.
Impact of policy change: Like the HHCRO funding, the Government has promised that the amount available will not be cut but in fact they are going to maintain the same level of funding for an additional 2 years (till 2017).
The combined investment of the HHCRO and CSCO is worth around £540million per year and the Government is saying this will remain while they may act in the future by taking other elements of the ‘social and environmental’ subsidy off your current energy bills to general taxation. We will let you know as soon as we know more!
Carbon Emission Reduction Obligation (CERO)
The CERO part of the obligation was designed to help insulate some of the most energy inefficient solid wall and ‘hard-to-treat’ cavity wall properties, which is integral to the delivery of the Green Deal. Insulating these homes would have the biggest impact on reducing heating costs and tackling carbon emissions, but they are also more costly to target.
Currently the Government have set aside about £760million per year for investing in this area, however the recent changes in policy are going to hit this quite hard.
Impact of the policy change: A 33% cut will translate to a cut in funding from £760million to around £507million per year. This has been translated to a cut in the target of 80,000 to 25,000 (or 100,000 by the end of 2017) properties being insulated under this part of the scheme.
Also the priorities have slightly changed – so cavity wall and loft insulation will also be offered under this obligation as they are cheaper measures, so the theory is that ‘more’ could be done with less resources.
While this part of the obligation will still be funded by the energy companies, time will tell whether more pressure at some point in the future will force further cuts to these programmes.
Other changes proposed to domestic energy efficiency programmes
With the current reform of ECO, the Government has also had a chance to reform the current Green Deal. The main changes proposed here are further ‘cash giveaways’ to the tune of £540million, helping new home buyers invest in energy efficiency and increasing the funds available for the roll-out of this scheme on a street-by-street / community basis.
Find out whether the changes to ECO are justified – visit page 2
An Energy Performance Certificate is a document which details the energy rating of your property (much like the rating system for appliances). This includes a breakdown of current efficiencies of certain aspects of the home, like the heating system, the walls, the windows as well as identifying ways to improve the efficiency of the home.
The EPC rates your house between 0 and 100, with a lettering scale of A to G associated with it. The average home in the UK is a 60, or D rating, but there is considerable variation depending on the type of property and the efficiency measures that have been carried out.
Does my home have an existing EPC?
There is an online register (www.epcregister.com) where you can find any EPC produced. If your property has an existing EPC, it will be found here.
If you are buying a property, or looking to become a tenant, the owner or estate agent should be able to provide you with the EPC for the prospective property.
Once you get your hands on the actual EPC report, you can see the date that it was completed – if it was more than 2 years ago it is quite likely now that it will be inaccurate, however an EPC in theory is good for 10 years from the lodgement date.
What do I need an EPC for and where do I get one?
Since 2007 it has been a prerequisite if you are selling, renting or building a property. If you are renting out a property for more than four months a year, you will need an EPC. Remember, you need to get this done before you market your property, otherwise you could face a fine.
Most estate agents can arrange for an EPC to be completed on your property however they usually charge a lot more than an independent company sometime charging in excess of £120. TheGreenAge will carry out an EPC across Greater London from just £50 (+ VAT).
New EPC Regulations
It is also worth noting that from 2018 you will not be able to rent your property if it has an EPC rating of 38 or less (band F & G). Therefore it makes sense now to start making the changes to your home to ensure it adheres to the new legislation.
Is an EPC useful?
The EPC can be really useful as it gives you an idea of the things to target to lower your energy bills, however since most people get an EPC just to sell their homes, they are often seen as an extra expense – a box ticking exercise. If you take the time to look, it can reveal a lot about your property, and what you should be looking to do to improve its energy efficiency.
People often have a somewhat distorted view of what constitutes a worthwhile efficiency improvement for their home. People get fixated on a new boiler or double-glazing when simple draught proofing or loft insulation is far cheaper and will do much more to reduce their bills. An EPC gives you the information required to see which measures you should target first.
On the EPC you will see a section with approximate savings for each proposed measure, along with the increase in energy rating associated with this improvement. Comparing the savings you will make to the cost of the measure is a really useful way to work out the best next steps for your home.
Drawbacks of EPC’s
Unfortunately, because EPC’s don’t take into account how you actually use energy in the home (e.g. how many people live there, how warm you like your rooms, how much hot water you use), they aren’t the most accurate tool for seeing how much you will save from certain measures.
For example, a house with 6 occupants and an average thermostat setting of 24 will use a lot more energy than a single occupant living in the same home who has the thermostat set to 18 degrees, even though an EPC would cite the same savings for both.
ECO Funding with Green Deal Finance – Worked Example
The following scenario shows how you can utilise ECO funding (a grant) to help pay for solid wall insulation, which otherwise wouldn’t meet the “golden rule” if paid for outside the Green Deal mechanism.
Note: the numbers have been adopted from an example provided on the Department of Energy and Climate Change website. The ECO assumption is based on £77 per tonne of carbon saving, which is consistent with the Green Deal Final Impact Assessment.
Internal Wall Insulation with ECO funding
This example is based on the assumption that figures were based on a small semi-detached house or an end of terrace property.
Insulating internal solid wall estimated to save each year
Golden Rule says max repayment on electricity bill in year 1 should be
Assume cost of work unsubsidised (needs Green Deal Finance)
Assume support from “ECO”
Cost that householder pays (i.e. cost quoted)
Assume 25 year Green Deal finance loan @interest rate
After taking interest plus cost of job over 25 years:
Annual repayment added to electricity bill
Customer better off with the savings
Customer also receives cashback for the measure installed
Total customer benefits in year 1 (bill saving + cashback)
The customer here has received £2,724 or 51% of grant money, that they won’t have to pay back. The balance is paid for by Green Deal Finance, which means there is no upfront cost borne by the customer.
Total 25 Year Benefit to Customer
£3,974 – £2,724 ECO grant, £24 per annum net bill saving plus £650 cashback
From Year 26, the customer will make the full £273 estimated bill saving (today’s prices), once the Green Deal has been paid off.
The Green Deal and tackling fuel poverty
June 20, 2013
Research by the Debt Advisory Centre has revealed some startling facts about fuel poverty in Britain and the extent to which people are struggling to pay their fuel bills
What is Fuel Poverty and how big is the problem?
Put simply, fuel poverty is widely recognised as being where more than 10% of a household’s income is used to pay for fuel (usually gas and electricity). The figures released by the Data Advisory Centre are quite shocking and reveal the extent of the problem facing the government.
Around 4 million adults in the UK are in gas, electric or water bill arrears, and even more startling, 13 million have avoided paying a utility bill in the past because they couldn’t afford it, and a significant portion of these are more than 3 months behind on their bills.
It is quite a difficult task to reduce these figures. Gas and electricity prices are rising above inflation, and well above average incomes, and this problem does not seem to be going away, with high unemployment and social security cuts also exacerbating the issue. Broadly speaking, with incomes unlikely to rise very quickly in the coming years, and further pressure on public expenditure, the best way to tackle this issue is to build and retrofit more energy efficient homes.
The Hills Report
All this information comes on the back of the Hills Report last year, that states 200,000 more people are set to be in fuel poverty in the next four years and millions of families could be pushed into even deeper fuel poverty.
The report also highlights some important questions on the measurement of fuel poverty. For example, it expresses the belief that fuel poverty is currently measured in a very unhelpful way and that the number of people affected, and how deeply they are affected, should be split into two statistics:
It suggests the definition of fuel poor household should be one that has required fuel costs that are above a pre-determined median level and;
Were they to spend that amount, they would be left with a residual income below the official poverty line.
Perhaps this statistic is slightly more difficult to measure, but it is likely to be much more useful than the current 10% of income definition. However the government has been consulting on a change towards this measure since the report was published.
What can be done?
To mitigate homes getting into fuel poverty the EPC SAP rating of property should ideally reach a target of 80 points out of 100. The current UK average is SAP 60, so clearly many of the most vulnerable are overpaying on fuel bills in their grossly inefficient properties.
Around 23% of those in fuel poverty are living in social housing, and one of the key provisions from the report is the push for the Energy Company Obligation (ECO) to include social housing. This is now the case and along with the Green Deal, will help improve the situation for thousands of fuel poor people.
Is the Green Deal and ECO enough to tackle fuel poverty?
There is a limit to the amount of ECO money available (£1.3bn per year), and all the regions of the UK are pressing to get as large a slice of the pie as possible. With ECO in its infancy, there is money available, so it is an ideal time to get your property improved for energy efficiency before the masses get involved.
It is quite clear that creating more efficient properties is a much more cost effective and long term solution than trying to regulate energy companies to drop prices when clearly the only way is ‘up’ going forward.
The Green Deal and ECO should ensure that a significant number of fuel poor households will be able to better afford their winter fuel bills and have a lasting solution to mitigate them from the effects of energy poverty. However more could be done. For example a study by Cambridge Econometrics said: if the Government invested a larger slice of public expenditure into a more extensive energy efficiency retrofit programme it would bring about a greater economic stimulus compared to other infrastructure spend.
What else can be done if you are in fuel poverty?
Apart from getting yourself a Green Deal and ECO assessment, there are a few things you can do to help yourselves:
Make sure you keep paying your bills if you are in arrears. The worst thing to do is to ‘give up’, as this will just grow your debt, and could force the energy companies to install a pre-payment meter at your cost.
Speak to the utility provider and see if you can get help from one of their charities.
Prepayment meters are an option if you have tried all other means. They can be more expensive, but they do prevent the utility company from harassing you, and often you can pay off your debt on the meter as well.
Get professional debt advice from organisations like the debt advisory centre.
Visit your local citizens advice bureau
Give us a ring and we will advise about cheap and easy ways to help lower your energy bills.
Despite the fact it’s summer, don’t wait to take action!
It might seem an odd time of year to start talking about fuel poverty: The sun is trying to break through, the room heaters are going away for the summer, windows are left open to cool the bedroom at night. Yet it is the ideal time to do something about it.
It does take some time to get insulation fitted, or get a new boiler installed. Getting from Green Deal Assessment through to installation can take a few months, so get yourselves sorted out now, before the cold weather makes a return and you get caught.
Having done a number of Green Deal assessments to date, it has been interesting to get the customer feedback on how they potentially see the scheme helping them increase the energy efficiency of their home and also go over some of the concerns that they have raised about it so far.
Typically, it seems that most customers seem to have a positive view of the Green Deal and what it is trying to achieve, however they are surprised some of the measures on their ‘wishlist’ are not immediately recommended when the Green Deal reports are finalised.
How the Green Deal recommendations work
The RdSAP software (reduced SAP) works by targeting the improvements that will best improve the energy efficiency of the home. Normally, the measures suggested will target the envelope of the home first; so the roof, walls and floors. It is the roof and the walls combined that account for over 50% of potential heat loss of property. Improving these areas by increasing insulation or draught proofing is the most common recommendation; and except in very few circumstances these will be recommended ahead of having a new boiler installed or fitting double glazed windows. So if you have an old boiler that you feel may be coming to the end of its useful life, the Green Deal won’t necessarily fund a new one, if other measures would make a more significant impact on your home.
The Green ticks vs. Orange ticks
There is a difference between what the Green Deal will finance under its framework and what it will not. A lot of customers have asked the question on the differences between the ‘green’ and ‘orange’ ticks. Well the green tick means there is no upfront cost for the customer as the measure is forecasted to pay for its self with the projected savings. On the other hand an orange tick means the customer will have to make a contribution to the Green Deal plan, whether that is in part or in full.
An orange tick also means the projected savings are not big enough to pay off in a sensible period of time, so financing energy efficiency improvements via the Green Deal isn’t the best of way of doing it.
Energy Company Obligation (ECO)
A lot of customers have asked whether they can some ECO financing towards their Green Deal Plan. First of all what is ECO? It is an amount of money (precisely £1.3billion) that the energy companies have to set aside to assist helping improve the energy efficiency of properties where the occupants are in fuel poverty, vulnerable or disabled.
Within ECO there is also a tranche, called the Carbon Saving Obligation and this is meant to help finance some of the hard to treat walls. For example if you have an un-insulated solid wall or a narrow cavity you may qualify for some ECO money if the Green Deal Report recommends solid wall insulation. If you see a green tick for solid wall insulation make sure you speak to your Green Deal Provider and find out how much of the total Green Deal Plan would be part financed by this grant.
Just to manage expectations, the ECO may not actually finance all of the cost of solid wall insulation but it should certainly help cover some of it.
Green Deal cashback mechanism
This is the biggest unknown that I have found so far when summarising to customers what they could do next. The Government have actually put aside £40million for early adopters of the scheme. So if you actually have Green Deal measures installed in the property you could qualify up to £1,000 of cashback. The amount will vary by measure.
The Green Deal and financing home improvements
Finally, there are a lot of scare stories about what you would do if you wanted to sell the property and having the Green Deal on the electricity meter would put off potential buyers. This view is wrong. By having the Green Deal quality sticker on the property will demonstrate that the property has improved energy efficiency and therefore in the long run also have lower bills – surely this makes it a more attractive proposition.
Author: Nicholas Miles (Green Deal Advisor)
First Day of the Green Deal – Truths and Untruths
January 28, 2013
The Green Deal, which is the government’s flagship initiative to improve energy efficiency in existing UK homes, has had its official launch this morning. Registration for the Green Deal has been available since October 2012, but homeowners, landlords and tenants have not been able to sign up for financing with a Green Deal Provider until today.
Greg Barker MP, the Minister overseeing this launch has unsurprisingly been very enthusiastic about the new initiative, having been interviewing for both Sky News and the BBC earlier this morning. However, in my opinion, many of the reports released this morning by media agencies on the Green Deal seemed to miss many of the key elements of the scheme.
For example in most of the reports there was no mention of ECO (Energy Company Obligation), which is essentially a grant to assist to the poorest and most vulnerable to energy poverty within our society or where the Green Deal principles of providing ‘savings the will help pay for measures’ doesn’t work.
Surely on the back of two weeks where we endured regular sub zero temperatures, we should be highlighting measures out there that can help make our homes warmer and help to reduce our energy costs, rather than nitpick on some of the small teething issues that people feel the scheme may initially suffer from.
Today’s Sky News report talked about £10,000 worth of solid wall insulation and how customers would see poor returns, but failed to mention if the payback calculated at the start of the plan didn’t add up then that measure should not made available by the Green Deal Assessor. The report also didn’t mention that in many of these cases, where solid wall insulation was one of the improvement measures suggested, homes could also qualify for an ECO grant. The government is keen to push for solid wall insulation and use the ECO mechanism to do so, because a high proportion of housing in the Britain is quite old and many of these homes have a poor energy rating.
Scare stories that some of these measures will take decades to pay off are also unfounded. Most of the measures that will get installed will pay back within 10 years, so having to get finance on measures that will be several decades is ridiculous! The stories also speculated that installing measures via the Green Deal has the potential to heap £1000’s extra on top of their existing bills – but the whole point of the Green Deal is that only the measures that can produce returns large enough to pay for the installation in the first place will be open to green deal funding.
There are 45 measures that qualify for Green Deal finance, and some of them are really simple and cheap like draught proofing to the more expensive walls and floor insulation. This scheme will really make a difference on people’s bills when they decide to have the measures that are right for them put in place. The ECO on the other hand will be targeted to the most vulnerable and help reduce energy poverty.
Here at TheGreenAge we want the consumers to be informed and have a full understanding of how the Green Deal and ECO work. This is why every week we will be publish a set of short bitesized videos that will hopefully help with answering some of the questions and concerns. Make sure you stay tuned!
We hope the Green Deal is a success and that it can be of benefit to you too.
Update: have a look at some of the recent case studies that have been installed via the Green Deal.
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