News from Rethinking Refurbishment

published: 15/6/2012

Green Deal response: a summary

This week the government released a 106-page response to its Green Deal consultation. The consultation document, published in November 2011 received over 636 written responses, with 551 responding on behalf of one or more organisations.

The National Refurbishment Centre was one of these respondents, sending its feedback following a round table meeting between its partners and a representative of the Department of Environment and Climate Change.
Here we have summarised some key points from the government’s response.

Some highlights:

  • Golden Rule can be broken by lower-than-average energy users, provided that the consumer understands that the rule is likely to be broken.
  • Green Deal Providers must apply ‘in-use factors’ to their savings estimates for qualifying measures to reflect gaps between theoretical and actual savings. 
  • Domestic interest rates on Green Deal plans to be fixed but can be increased by 2% per annum. 
  • Green Deal Providers will offer guarantees for a minimum of five years, with an extended 10 year guarantee to cover consequential damage resulting from measures.
  • Hard-to-treat cavity walls will now qualify for the Energy Company Obligation (ECO) for protection, while low income and rural households will receive specific support; estimated 2.8million hard-to-treat dwellings will now be eligible under the ECO.
  • DECC appear interested in using the £200 million capital for ‘street-by-street’ interventions/incentives. 

Summary of the government response

CHAPTER 1

Question 1: Period of indemnity for Green Deal Assessors shorted from 25 years to six years.

Question 2 & 3: Assessor Certification – a sample of assessors will be evaluated through witnessed assessments. Details available in Specification for Certifying Bodies.

Question 5: Only EPCs produced since April 12 may be used as part of GD assessment.

Question 6: SBEM to be used as basis for non-domestic refurbishment but with some variables unlocked.

Question 7: Appendix Q will continue to be used as the route to add new eligible measures.  There is a plan to set up‘Integrity Group’ of commercially independent members to protect the scientific integrity of Appendix Q.  DECC supports the cost of an initial meeting between UKCAS approved SAP contractors.

CHAPTER 2

Question 10: Consumers will be allowed to take out more than one Green Deal in order to take advantage of ‘trigger points’, as well as seeking to maintain a fabric first and integrated approach.

Question 11: ECO measures will include solid wall insulation and non-standard cavity wall insulation.

Question 13: Carrying out SWI or HTT cavity treatments allows ECO to support other measures, such as glazing, loft insulation and draught proofing.

Question 16: Affordable Warmth obligation – all measures to be eligible in any order and including boiler repair (with caveats related to a ‘compliance cap’ and minimum level of energy efficiency)

Question 18: Product certification and testing – existing standards will be used, however system testing (integration of a series of components) will be required by UKCAS accredited facility for external wall insulation systems; internal wall insulation systems and cavity wall systems).

Code of Practice will require Green Deal Providers to confirm with suppliers that the products to be installed can (or are designed to) to deliver the level of fuel bill saving estimated for the measure in the assessment. 

Question 18: Enhanced Performance – DECC will procure a body to independently verify the enhanced performance of products. Enhancements might be about durability, lifetime, better than generic savings and reductions in the ‘in use factor’ to be used.

CHAPTER 3

Question 19: Requirement for a surety bond is removed. Now the organisation who takes the payments takes on the responsibilities of the Green Deal Provider.

Question 21: There will be no additional charges for late payment of Green Deal loan.  Existing energy payment mechanisms such as the use of prepayment meters to collect Green Deal alongside energy will be used.

Question 22: Warranties – minimum of five years for all Green Deal measures; 25 year for Solid and Cavity Wall insulation.  In addition, minimum of 10 years cover for consequential damage.

Question 23: Early Repayment – fees to be levied only if Green Deal is longer than 15 years.

CHAPTER 4

Question 25: In use factors will be included for each measure to be applied.  Three quotes will be required for Green Deal packages in excess of £10,000.

Question 26: Low energy users (domestic) will be required to acknowledge that their savings may not meet the golden rule.

Questions 27 & 28: Variation in interest rates – domestic deals to be fixed-interest rate only, with a maximum 2% per year increase in line with the Bank of England inflation rate target.

Question 29: Cash Incentives – 5% or £150 whichever is the lower, cash back incentive limit to be retained.

Question 30: The Golden Rule is retained with RdSAP improved; room-by-room factors to be built in; occupancy factors to be included; in-use factors to be used; key terms guidance to be created; “feed-back loop” (evidence to be used as part of the evaluation process)

CHAPTER 5

Questions 31 & 33: Eco Affordable Warmth to target private households meeting means tested criteria.  Three elements: 

  • Affordable Warmth obligation is £350 million for low income households in vulnerable private tenure for central heating, loft and cavity wall insulation. 
  • Carbon Saving Obligation is £750 million for Hard-to-Treat focus on solid wall and non-standard cavity. 
  • Carbon Saving Communities obligation is £190 million for low income areas for loft and cavity and wider insulation measures (not specified). It seeks to ensure rural issues are addressed.

Question 32: ECO referrals – SLA to be put in place about how affordable warmth referrals will be handled.  Individuals and third party organisations will be able to apply to be referred to an energy company by the advice service.

CHAPTER 6

Question 36: Property Professionals’ role – no regulation planned.  Watching brief to be maintained.

Question 38: The time period to dispute disclosure of Green Deal will be increased from 30 to 90 days.

Question 39: Green Deal Providers will not be able to force full early repayment; instead, they must offer a choice to either, voluntarily repayment in full, repayment in part, or maintain the status quo.  This is to address issues such as change of use, demolition or the early removal of Green Deal measures. 

CHAPTER 7

Question 40: Only certification bodies approved under Gas Safe and MCS will be free from further UKAS accreditation.  Accredited certification bodies will no longer be required to provide an annual statement of certified members annually; instead registration notification will be required followed by notification of changes.

Question 41: Accreditation will be led by PAS2030 standard and UKAS approval.  Green Deal installation will still be by accredited organisations only.

CHAPTER 8

Question 42: Thresholds for revealing electricity debts to Green Deal Provider are maintained at £200 (domestic) and £400 (non-domestic).

Question 43: Electricity suppliers cannot prevent customers in debt from taking out a Green Deal.  If limits are exceeded, the Green Deal Provider can take out further credit checks.

Question 50: Green Deal customers and non-Green Deal customers must be treated the same as far as regulations on prepayment meters are concerned.

CHAPTER 9

Question 51-54: DECC will put a brokerage mechanism in place for when the Green Deal framework comes into operation. They propose to hold a further consultation over the summer to call for further evidence of market failure and the need for any further regulatory intervention about brokerage.

CHAPTER 10

Question 55: Consumer Protection – DECC will now procure a separate Green Deal Ombudsman and Investigation Service.  Announcement to follow

CHAPTER 11

Questions 56 & 57: Target Metrics – responses led to introduction of ‘third leg’ of the ECO/Carbon Saving Communities Obligation.  New ECO targets will be:

  • Carbon Saving Obligation – lifetime saving 20.9Mt CO2
  • Carbon Saving Communities Obligation - -6.8Mt
  • Affordable Warm Obligation - £4.2Bn notional lifetime space and water heating costs

Question 58-60:  An improved SAP to be basis of calculation of ECO scores, with calculations to be based on the lifetime of the measures rather than annual calculations.

CHAPTER 12

Question 61: DECC looking at data sharing with Green Deal ‘participants’, with EPC address level information available in bulk to “authorised users”. Energy suppliers will be required to report monthly to DECC on the scheme and include data on cost and delivery.

Question 62: OfGem will administer ECO until March 2015 at least.

Download DECC's full Green Deal consultation response document.