Great Deals & Green Deals Andrew David Director. Content Who are we? Energy Company Obligation - ECO Green Deal Green Deal Cash-Back NEST Arbed Renewable.

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Presentation transcript:

Great Deals & Green Deals Andrew David Director

Content Who are we? Energy Company Obligation - ECO Green Deal Green Deal Cash-Back NEST Arbed Renewable Heat Premium Payment

Who Are We? An independent charity established in 1995 Aims are to combat climate change and fuel poverty Based in Newport, but strong links with Monmouthshire Last year we spent £3.5M treating 1,543 homes Reduced carbon emissions by 79,733 tonnes Reduced energy bills by £287,000 a year, or £7M over the lifetime of the measures.

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 settlements Home 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 Dangers To manage its far more complex than previous CERT and CESP schemes Ofgem have introduced very tight claim requirements with regard to: Promotion of the scheme Recommended measures – GDA or CSR Installer competence – PAS2030 Guarantees provided Carbon scores – EPR/RdSAP Timing of reporting This rules out retrospective claims and exposes scheme managers to significant risk

Affordable Warmth Eligibility Pension Credit Child 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 Jobseekers 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 youre responsible for a child under 16 (or under 20 if theyre in education or training) you get Disabled Child Premium you get Disability Premium you get Pensioner Premium youre 60 or over (only if you get Working Tax Credit)

Green Deal and ECO Working Together Interaction 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 Governments flagship scheme to improve 26m homes by Its 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 7% through electricity bill The loan stays with the property If property is sold the new bill payer must take over the loan Loans can take up to 25 years to repay.

Green Deal Measures There are 45 measures or areas of home improvement approved to receive funding under the Green Deal covering: insulation heating and hot water glazing 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 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 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/m 2 (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 1 Installing External Wall Insulation in a 3 bed gas heated semi-detached house Green Deal Installed cost (loan amount)£8,000 Interest rate8% Repayment time (years) – maximum allowed25 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 2 Installing a new Gas Boiler, Heating Controls and Cavity Wall Insulation in a semi-detached bungalow Green Deal Installed cost – DECCs figures£5,000 * Interest rate7.9% Repayment time12 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 Pitfalls Question - 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 Far 4 Green Deal Plans signed since January Only 25,999,996 plans to go! Cavity wall insulation market has crashed April 2012 – 40,000 installs April 2013 – 1,000 installs 5,000 jobs gone, not 24,000 created Ed 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? The principle is good, but the execution is bad Its too bureaucratic; there are 10 or more organisations involved in each deal Its too expensive; as all of the organisations between installer and householder must add their mark-up Savings are not guaranteed; so risk is with householder 7% + £63 set-up fee + £20/year admin charge Its 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

NEST Nest is the Welsh Governments fuel poverty scheme The energy efficiency of the property is upgraded at no cost to the occupier A 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 Benefits Benefits 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 jobseekers 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 Welsh Governments strategic energy performance investment programme £45m of funding from the European Regional Development Fund (ERDF) and Welsh Government Its 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 & Premium To encourage the take-up of renewable heating systems in the domestic sector Available for all tenures, but not new-build (except self-build) Good for oil and LPG replacement in rural areas RHPP available now, RHI proposed for Spring Air Source Heat Pump Ground Source Heat Pump BiomassSolar Thermal Renewable Heat Premium Payment £1,300£2,300£2,000£600 Renewable Heat Incentive (P/kWh) 7.3p18.8p12.2p19.2p

Confused ? Just get in touch with us Tel: Visit: Clarence House, Clarence Place, Newport, NP19 7AA Open weekdays 9am – 5pm Advice is free and impartial