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The Golden Rule
The ‘Golden Rule’ of the Green Deal is the principle that the charge collected through the electricity bill should be no greater than the expected energy bill savings estimated during the assessment process. This principle has underpinned the design of the Green Deal from the start, and is an important protection for both customers and investors.
How can we make the Golden Rule a reality in practice?
The Golden Rule is not a guarantee that the charge will never exceed energy bill savings, nor that bills will never rise. People change their heating and energy consumption habits, and energy prices may well rise and increase the overall bill. But right from before a customer even makes contact with a Green Deal Provider, the stepping stones are in place to ensure the charge collected through the bill is as likely as possible to be offset by the expected savings, for the initial and future occupants.Firstly, work is ongoing at the moment to ensure the data on the amount of energy that different improvements save is as up to date and accurate as possible. A team within DECC is leading this work and taking advice from scientists and experts on how much energy different measures are likely to save.
Secondly, we are making some important changes to the assessment methodology used to estimate energy consumption in a dwelling, RdSAP, to ensure the estimated savings are as accurate as possible. One example is that the estimated savings will now take into account regional weather variations. Importantly, the assessment will take into account the amount of energy that would typically be used in the type of property, and what price would typically be paid for that energy, in estimating the likely savings. The assessor will also provide additional advice on the household’s actual energy use, and, if applicable, how they might reduce their energy consumption.
Thirdly, we propose to require Green Deal Providers to limit the Green Deal charge in the first year to the year 1 savings estimate provided by the assessment. For subsequent years of the Deal, we propose to place restrictions on how much the charge can then vary; we are consulting on what the right options are, but the aim is to minimise the risk that the charge might exceed the expected savings during the lifetime of the Deal.
Misconceptions
Green Deal finance is not restricted only to products which fully pay for themselves through savings; partial finance via a Green Deal is an option to fund measures which save at least some energy, and are modelled in the assessment tool.The Golden Rule ‘cap’ applies only to the amount that can be collected via the electricity bill at the property, but there is no cap to what customers may pay via other means. A customer may choose to pay for a measure in part upfront, or may be eligible for a subsidy to part-fund a measure, bringing the charge on the bill down to below the Golden Rule.
And meeting the Golden Rule is not in itself sufficient to fulfil the affordability assessment required under the Consumer Credit Act; Green Deal Providers will have to meet the Golden Rule but will also need to take account of other relevant information when determining a payment schedule that is affordable for a customer. So while the charge in the first year will be capped at the savings for a typical energy user, an individual’s energy usage will also be considered before finalising a Deal.
Liz Devine, Green Deal Legislation & Finance team
43 Responses to “The Golden Rule”
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I believe there are two types of people out there – people who ARE interested in the problems of climate change and those who genuinely couldn’t care less.
The concept of paying those in the first group a subsidy is absolutely sound – eg on solar panels, which are ultimately paid for through the green levy on utility bills.
Sometimes, the only way to make people change their ways is to hit them where it hurts – right in the pocket. Scrap the Golden Rule – increase the green levy to whatever percentage is required and you’ll soon have millions of green converts looking for ways to reduce their fuel bills !
I concur with most of the comments above. The finance mechanism is not the best – 7.5% when a small amount added to a mortgage would do it for much less.
But I have one specific question that desperately needs a conclusive answer. B&Bs – are they eligible for domestic GD or non-domestic GD? Before you answer please bear in mind that proprietors selling or leasing B&Bs use EPC not SBEM.
A B&B is a dwelling in every sense – the owners live in the dwelling and rents out rooms which are themselves a dwelling as prescribed in the English dictionary -i.e. a place to ‘dwell in’. There is no prescription of how long people ‘dwell’ – merely that they do ‘dwell in a place of residence’. A dwelling is defined in the the 2001 Census as a self-contained unit of accommodation.
The key aim of the Green Deal is to encourage people to improve the energy performance of buildings – domestic properties, however they are used are still domestic properties used only for domestic purposes – eating, sleeping and washing.
Common sense should prevail here. A B&B or small guesthouse is unlikely to want to do SBEM because it is more expensive than EPC and not appropriate for their domestic uses. And, because the scheme s entirely voluntary many thousands of B&Bs across the UK will not be contributing to the UK’s carbon budget commitments. And, because these ‘dwelling’s consume far more energy than the average household that omission would be a significant loss to the mandatory carbon reduction commitments.
i think that the golden role is so important for goverment to make sure this is meet before any works take place as otherwise it will lead to many unhappy clients
we are seeing a great deal of high electricity usage applications who are looking at renewables under the Green Deal which should meet the golden rule. There has been a bit of negative feedback on renewables under the Green Deal but for some specific applications it should work very effectively, smaller domestic may be more difficult.
looks like this thread has died a death, but some interesting points remain unanswered and Frances Hunt makes a very valid point regarding integration of measures. is there an update on the golden rule and how it will work, many measures will fail to meet it and will require cash injection by the consumer which flies in the face of the ‘no up front cost’ ethos and key principal. be interested to hear current thinking on this key issue
bravo Andy. Any measure should qualify, assistance should be given and the more negative comments the less the take-up.
Question for DECC How is reduced gas usage taken account of?
Where are the simple examples called for and maybe promised?
It IS possible to Energy-Envelope to reduce substantially suction leakage and super-insulate in one step, preferably with solar-thermal-SEAMLESS heat-gathering with PV mostly in summer with heat storage. we have worked out how to do this . It is comprehensive and involves recladding walls.
Finally
i think the accreditation procedure might be too prescriptive.
The government needs to act fast to fix this
I think any help offered to the end consumer to make their property more energy efficient and less reliant on fossil fuels should be encouraged.
[...] support the Golden Rule (to find out what this means go to http://blog.decc.gov.uk/2011/12/22/the-golden-rule/) but stress that it must be adhered to throughout the duration of each agreement and that the [...]
Whatever happened to ‘keeping it simple’?
All this complex machinery, requiring admin / calculations / loans! Is this system designed to soak up all the civil servants you will lay off in the next 2 years?
Why not simply have a ‘Polluter Pays’ system where the polluter pays through the nose: a simple multiplier whereby CO2 producing activities are taxed to hell by increasing the multiplier disproportionately and punitively as people pollute more.
You then take the excess tax and spend it on subsidising those polluting far less ( as with tax discs on cars now ).
You then incentivise the rich to reduce their carbon footprint, pay the subsidies to people to insulate and light their homes better ( they get no choice as the measures are free ) and you reduce hugely the numbers of people in fuel poverty. simples!
Several of the other posters have touched on this – under this scheme, where is the incentive to have insulation installed? Your bills won’t be any less (until the Green Deal loan is paid off, which could be up to 25 years). You might find it more difficult to sell your house, if it has a debt attached to it.
How much research has been done on the likely uptake of the basic Green Deal offering (ie. without any further incentives)? A straw poll of my friends and family makes it clear that people would NOT take it up (unless they were eligible for ECO subsidy). Their response was ‘why?’ In the short and medium term they would be no better off financially.
However, if domestic energy efficiency was linked to Council tax, that’s a different matter. Paying less tax would be a big incentive to get the work done and would also be a positive selling point (and an incentive for tennants too). Has this been considered and if not why not?
Hmmm, you didn’t answer me on the need for design input & management. Is it really that when you talk about Golden Rule packages you are talking about limited simple appliance and window fitting direct from Providers? So the Green Deal is not going to be about fundamental upgrades: insulation, airtightness and ventilation recovery? Even the best contribution: solar thermal water heating, will be too complex as it needs integration into the existing household services & fabric and therefore difficult in the absence of project management. The new Building Regs are a good step towards low carbon, but the Green Deal is not going to adapt to cover that additional workload by the sounds of it.
I’m interested about the assumptions made with regard to future energy costs; this is clearly vital to which measures meet the golden rule. The consultation doc seemed to suggest only rises in line with inflation could be assumed? However, having green deal measures done and reducing your energy need is a form of insurance against high energy prices. If the energy price rise assumptions are too conservative then those with capital/in settled circumstances can pay the top up and get the insurance but those without, such as low paid/renters will be the ones left exposed to high prices or left in the cold. Could we assume above inflation energy rises but socialise the ‘insurance’ element – the money coming from/going to a nationalised fund that could tolerate higher risk/default rates, rather than commercial lenders?
I believe there are two types of people out there – people who ARE interested in the problems of climate change and those who don’t give a toss.
The concept of paying those in the first group a subsidy is absolutely sound – eg on solar panels, which are ultimately paid for through the green levy on utility bills.
Sometimes, the only way to make people change their ways is to hit them where it hurts – right in the pocket. Scrap the Golden Rule – increase the green levy to whatever percentage is required and you’ll soon have millions of green converts looking for ways to reduce their fuel bills !
Best regards
Pat
The fundamental problem with the entire Green Deal concept is the cost of the borrowing. As “Rural Energy User” says unless it is fixed at 2% or less it won’t be any sort of “Deal” at all for anyone. This alone will kill the scheme stone dead from the outset.
Apart from this, consider the options for Owner Occupiers: If I was considering selling my home any time in the next few years there is no way I would want to have an additional 25 yr debt attached to it because this would be a massive disincentive to any potential buyers. Doh !
If I was looking to buy a new home,
similarly there is no way I would be considering buying anywhere that had a debt attached to it. Location, New Kitchens & Bathrooms are what sell homes – energy efficiency is way way down the list of things the vast majority of buyers care about. Also, 1st time buyers will face yet another hurdle – Mortgages must be affordable otherwise lenders simply won’t lend – adding existing debts to the cost of the monthly mortgage repayments will simply make it unaffordable for thousands of 1st time buyers already priced out of the market.
RE: Private renters – Who in their right mind is going to agree to pay to upgrade their landlords building fabric ! This is simply insane. And who is going to rent a home that comes with an existing debt either?
I would gladly rent a home which had energy saving products (Solar Thermal and/or Heat Pumps) installed. Along with loft/cavity wall insulation.
I would look forward to the reduced monthly outgoings for heating and hot water.
However, the equipment must be paid for by the landlord, and the landlord would be responsible for claiming some sort of Green Deal.
It’s clear that the government need to make things easier to understand and remove the barriers which put people off.
It’s important to remember that the reasons people don’t get involved in such schemes, are not always financial reasons.
BUT THEY OFTEN ARE! I disagree – it is MOSTLY financial hardship – or perceived hardship, in my experience, especially in a time of relative hardship it is going to take a long time to get people round to investing as THEY NEED TO DO.
What about those who need help who do not qualify for ECO?
This is a Blog reply I submitted to DECC’s International Low-Carbon Energy Plicy unit and it is still relevant today, hence submitted here>
October 28, 2011 at 7:57 pm
Chris Hulme and other Ministers talk about the War on Carbon, it being one of the greatest challenges facing Government; with Green Deal being, ”The biggest home improvement project since the second world war”. But is it all talk, little do. My initial thought and reaction was: How did we win World War2? – certainly not by this standard of action and delivery.
CEM highlights the issue of the ever-increasing population and on the news today we learn the UK population is to expand to 70 million by, was it, 2020! If so, is this fact and urgency getting embedded into the silo mind-sets of bureaucrats within government ministries?
The Green Deal is having a mountainous edifice created to deal with Energy Efficiency (E/Eff), a major plank in abating Carbon. 50 pieces of secondary legislation needed to give effect to it. But in my view it is conceptually flawed by shifting capital spending on a property from the property owner to the property occupier (the bill payer). This is negatively pertinent to the Private Rented Sector where owner and occupier are not one of the same, where it is muted prospective tenants will be happy to pay twice, once in higher rent for a more E/Eff property and again for the Finance charge on bills. I don’t think so!!
Also, for all bill payers, having had these e-efficiency works carried out, where is the noticeable cut in energy bills each quarter for the next 10,15, 20yrs or so when a Finance Charge is stuck on the bill. Where is the incentive to have such works done or rent a property with such charge on the bill seemingly forever. And this F/Charge will be really noticed on spring/summer and summer/autumn bills when these quarter bills for consumption & energy cost are at their lowest.
Further, this F/charge acts as an increased ‘standing charge’ on the bill and thereby reduces an occupant’s ability to reduce the energy costs, if they are experiencing a period of hardship. If they cut back, consolidate space use within the building, reduce temperatures, be smarter; the f/charge becomes a structural impediment to cutting domestic or business outgoings. It becomes a disincentive to engage in these works
At the Third reading of the Energy Bill, this Green Deal was described by the Shadow Energy& CC Secretary, “as a bit of a disappointment…in parts divorced from reality as a nursery rhyme. Much is promised, but little was delivered…..it is a weak Bill… Gov is swamping CD Providers in red tape. It is a wishy-washy Bill. It has no strategy or plan for delivery”
My personal fear is that the Civil servants are so concentrating on process of implementation that they have lost sight of the needs, action and re-actions of the drivers of the process – the Household Bill-payer. With an energy-hungry expanding population and wishy-washy Carbon abatement legislation putting all our eggs in this one basket, I ask the question – how on earth are we going to win this Carbon War?
Roger Parker, Commercial Energy Assessor
It seems to me that the government are going round in circles like a hampster, trying anything to get gold stars by the E.U and do gooders. This bill is going to end up thrown out just like the faulse promises of the HIP pack. I am a qualified Home Inspector. Fed up with empty promises and hear say!! myself just like thousands of others, spent all our hard earned savings on becomming home Inspectors through Property professionals in Bristol. Since 2009 I have been trying to get a career going again, firstly in sales and now as a Solar PV Consultant. Thanks to you and slashing the feed in tariff in December 2011. I’m left out to hung dry again, with a lack of confidence from the public in anything to do with green energy. So Mr Huhne and your cronies. You tell me! and the mass population, given the track record..what should I do now? I want a clear concise future plan. Not a quick fix. So if I utilise my Diploma and become a Home Energy Advisor, how do I earn money..From Who? who pays..You? Plaese let us know I’m all ears..
Thankyou!
Green Deal will only be credible if the initial Assessment & advice is Independent & Professional. The Advisor must then have 2 facilitations:
- A fixed tariff for 10 years
- easy Access to energy bills- similar to Landmark register for EPCs.
Without these, a good Home Energy Advice Report and justification calcs will be impossible a the Golden Rule another well intended failure
Assessments will be carried out using a standard methodology, and will be stored and independently quality-assured. The Code of Practice for advisors will also set out requirements for assessors to give impartial advice, and sanctions will apply where this is not the case if this requirement is breached.
Green Deal Advisors will use energy bills when provided by the customer to ensure the occupancy part of the Green Deal assessment is based on actual energy consumption.
I recently spent a day with Stroma on the green deal and was astounded to hear that my work would HAVE TO BE CHECKED BY THE GDA; this was amazing because more than 50% of the delegates on the seminar were sales people chomping at the bit to get started for healthy commissions they are expecting. Apparently they know more about the pathology of buildings than professional building engineers. I was outraged because I have been a surveyor for 32 years a DEA since 2007 and a qualified SAP assessor. So my first question is how does this government expect to get this incentive off the ground with any realistic hope that the advice will be correct for the customer and more importantly will be right for the building? My next question is regarding the need for independent advice, British Gas is going to be a Green Deal Provider, and a GDAS and also employ the GDA so where is the independence there so my question is what plans are there for the inevitable miss selling claims in five years time? I can not wait for the endless unsolicited phone calls asking me to claim for my miss sold green deal advice! Remember SERPS and pension transfers all promoted by the then Government.
The training outlined on the seminar that DEAs will have to do appeared to be sales skills or soft skills as the presenter put it so is it the intention to turn building engineers in to sales people or are the Government encouraging sales people to become building professionals? If so I am disappointed that I wasted 7 years training to become a surveyor because I have already been offered an online course to become a GDA for £850 this included the building knowledge needed to check my 32 years as a surveyor and of course they will have to check that my understanding of RDSAP is correct and perhaps they will check my full SAP assessments too.
I sound negative about the Green Deal but far from it I think this has the potential to help improve our carbon emissions and help the economy in general but I can see another financial services debarcle looming, so please delay the start and rethink the way it will be operated where advisors are paid for the advice, building engineers get paid for their technical knowledge, customers have a more efficient home and the economy will get a good boost to.
I don’t expect a reply because politicians don’t like to hear the truth from a normal hard working man. But please don’t let us all waste this opportunity.
Scrap this nonsense and provide index-linked loans via a state-owned bank, as in Germany
Include heat mains in the loans, since the UK throws away 70 million kW of warm water from power stations and in towns a heat main is cheaper than a heat pump (the government is subsidising the latter and mis selling them as “renewable”).
For isolated houses, such as mine, the condensing boiler’s fuel (LPG) is twice the price of natural gas and a £30 k loan would be economic if only it was financed at the rates utilities can borrow money (e.g. National Grid, Welsh Water.)
Why the government is content for utilities to borrow money at a few percent (real) but wants to charge householders 6 or 7%, I have no idea whatever.
The Government is committed to ensuring the Green Deal is a good deal not only for energy consumers but is also a good deal for taxpayers which means that the Government is focused on providing the legal framework for the private sector to deliver the Green Deal with private sector money. However, the Government recognises that the Green Deal is a new proposition and may need Government support in the early stages. This is why in December 2011 the Department for Business Innovation and Skills (BIS) announced that the Green Deal was one of the key priorities for the Green Investment Bank (GIB) and the Government is currently considering whether short term investment into the Green Deal, to help start the market, is value for money. In addition the Government has announced that it will provide £200m of incentives for the Green Deal in its early stages to help drive demand in the market.
As the Green Deal is designed to be a private sector programme, it is up to the market to determine what the cost of finance will be, rather than the Government. The cost of finance is determined by the credit rating of finance which is largely a result of the certainty of repayment. As the Green Deal is a new concept we are working with finance institutions and investors such as The Green Deal Finance Company to highlight the reasons why the Green Deal will have strong demand, strong cash-flow and a good accreditation and regulation regime, which will all increase the certainty of repayment and thereby lower the interest rate available to consumers.
Who are the ‘investors’ and ‘institutions’ involved in the Green Deal Finance Company?
Reply to rural energy user’s Why – rip off Britain perhaps? Supporting the power industry rather than those needing investment help at 2 or 3 % interest – created money the gov could actually get a payback from! by stimulating work in the local economy. See reply to Ken Neal for contact detail to assist in super-insulating your building.
Even with a Golden Rule in place, my experience of dealing with members of the public tells me that unless there is something real and tangible “in it for them” then you will struggle with uptake of the whole GD concept. Take out an improvement loan for the house, funded by profit making private equity companies, but you won’t see a reduction in the money you pay for electricity? Good luck with it!
Thank you for your comment. In order to protect consumers from the risk of higher energy bills, we are limiting the charge to the expected savings, but Green Deal Providers are free to charge less than the savings and ensure customers do see a real reduction in their bills from the start.
Ive logged on trying to get an explanation EXACTLY how the green deal works but to no avail
Thank you for your response. There is information available on the Green Deal webpages of the DECC website (www.decc.gov.uk/greendeal) which provides a summary on what the Green Deal means for customers (domestic and non-domestic) and different industry sectors.
In particular, the Green Deal and ECO Consultation goes into a lot of detail on how the Green Deal will work.
Energy costs in the future are likely to rise continuously as China and India, a third of the world’s population, continue their economic growth. The only circumstances in which fuel prices are likely to reduce is if there is a world recession, in which case no one in the UK will have the money to heat their houses anyway. On the basis of continually increasing fuel costs, the Golden Rule will be out of date for an individual property the moment the work is carried out. Properties will be inadequately insulated and will require repeat visits.
In view of the scale of the work required – an average of 624,000 houses per year for 40 years or, given a standard distribution curve, a peak of 2 to 3 million houses a year put against a maximum new build rate in recent years of 250,000 per year – we will be hard put do that amount of visits once only let alone multiple times. We need to do once only visits to any one house. In view of the scale of the work it needs to be done on a contract basis for a number of houses at a time in order to get economies of scale.
The work needs to be done to a set standard of insulation and that standard needs to be set by the Climate Change Act requirement for an 80% saving in fossil fuel use. All insulation work done now should be to a 2016 zero carbon Building Regs standard of insulation.
The Climate Change Act and the Kyoto Agreement requirements are based on an environmental necessity not on an economic aspiration. If the Green Deal is to be successful it must be based on the environmental requirements not economic aspirations.
Anyone who has designed the work required to achieve an 80% saving, and I am one, knows that there is one hell of a lot of detailed design required to achieve that saving. A couple or three contractors turning up at different times and doing their own little bit will result in a bodged job that will leak energy, waste resources, money and time and will never achieve the savings necessary. A good job needs to be designed, detailed and carried out as a single integrated contract.
Nowhere in any of the Green Deal literature have I seen anything about an overall design of the installation.
The Green Deal is a good idea which is let down by an ignorance of the extent of the work entailed.
The work should be properly designed by people with proven experience in the design of highly insulated structures.
The work should be carried out to a high technical standard not to an “economic” standard which will be out of date before the work is started.
The work should be carried out on a one hit per house basis preferably in a contract on a number of adjacent houses.
The job of the economist should be to devise a way to fund the necessary work to the necessary standard not to set the standard.
If the Bank of England can print hundreds of billions of pounds in an attempt to bale out banks, surely it can find a way to print a few tens of billions of pounds per year to fund a national insulation scheme which will flood through the economy and give it a temporary boost to keep the flagging monetary system going for a few more years.
The Green Deal Provider is ultimately responsible for agreeing with customers what measures they want to install, but the assessment tool will be able to model savings based on packages of measures, and it will therefore be possible to model the most effective package for a household.
The Green Deal accreditation framework will ensure that all advice and installation work is carried out by authorised installers to robust standards, so consumers are protected from poor quality work.
In particular, the British Standards Institute (BSI) is currently developing the installer standard for the installation of energy efficiency measures (PAS 2030) with the sector, and is scheduled to be published in January 2012. PAS 2030 provides a specification for installation process, process management and service provision and covers measures that are likely to be eligible for the Green Deal financing mechanism.
We propose to implement the standard through certification bodies with a view to minimising burdens and costs by using existing structures. We intend to introduce independent third party accreditation of these certification bodies to ensure robust and consistent application of the new standard. Once accredited, certification bodies will be responsible for ensuring installers meet the Green Deal standard and comply with the Code of Practice.
Ken Neal made a point about how an ‘installation’ needs extensive design, integration, detailing and inspection on site because all upgrades will be a mixture of building processes. Your answer completely missed the point and upholds the idea that an ‘Installation’ is the equivalent of delivering a washing machine. Have any of you actually been on a building site, even a simple domestic extension, and taken in what is really involved? Your obvious lack of this basic understanding is going to lead to some disastrous failures in building fabric.
Thanks Ken for the summary of what is needed in a nutshell. I support your call for funding using QE money which should never have been put into bonds. They’ll will be valueless (?) or worth a lot less.
Please contact me ian[dot]greenwood[at]phonecoop[dot]coop to hear about Super-insulation in a simple way and also a credible Solar heat Store inter-seasonally.
What you and others have said about mopping up staff from other shrinking govt areas seems spot on, together with complicated assessors and inspectors/finance industry. Instead i can provide good bullet points and spot-on details which would help to solve the problem you describe. BRAVO to you – Ian
Improving energy efficiency is simply another home improvement. Currently, when installing for example, a new heating boiler or double glazing, there is no golden rule requirement, consumers don’t ask about payback period or energy bill saving and no property assessment, EPC or accreditation is needed.
If we are not therefore very careful, we are about to get the marketing message wrong, make the process too regulated, complex, administratively burdensome and confusing to consumers.
Before it is too late, we therefore need to review the marketing message and customer journey which to date have been inadequately considered.
Thank you for your comment. The Green Deal differs from similar financing arrangements as the obligation to pay transfers along with the property to any future occupants. This is one important reason why the protection of the Golden Rule is necessary. We welcome responses on this, and if you would like to expand on the concerns you raise here we would be interested to understand more; the link for responses is available at http://www.decc.gov.uk/greendeal.
Well that’s about as clear as mud.
It’s clear that if you did a SWOT analysis of the Green Deal as it has been proposed so far, then it would clearly not be fit for purpose.
As a representative of the double glazing industry I can see most companies will either ignore or sell against this scheme.
Thank you for your response. Further information is available on the Green Deal pages of the DECC website (www.decc.gov.uk/greendeal) which provides a summary on what the Green Deal means for customers (domestic and non-domestic) and different industry sectors.
The Green Deal and ECO Consultation also goes into detail on how the Green Deal will work. We welcome responses on this, and if you would like to expand on your concerns the link for responses is available at http://www.decc.gov.uk/greendeal.
So if I want double glazing that costs 25k and takes over 25 years to get the Retuen On Investment, I can get the Green Deal money to part finance (10k) the cost? Is that correct?
Correct and the 10,000 loan from Green Deal will be attached to the electric bill of the property with payments being less than what the double glazing will be saving you each month, if you move payment stays with property
Indications from British Gas pilots indicate <5% take up of GD offer if set at Golden-rule level. This is worrying as it looks like ECO will be required to ensure a real incentive to encourage uptake ie overall cost savings in excess of 20-30% of projected energy outlays if GD take-up is likely. Will ECO sufficient eco investment be forthcoming to allow attractive incentives to apply?
Thank you
Craig Anderson
Our modelling of the ECO includes provision for ECO to provide a subsidy which takes energy efficiency packages well inside the Golden Rule, allowing households to either see bigger bill benefits from day one or to take out a package with a shorter repayment lifetime.
Our assumptions for the levels of ECO subsidy on offer are based on our consumer research work on what is needed to make an offer attractive.
Thank you for confirmation that ECO will be used at levels to ensure consumer take up. Can you supply any worked examples yet of the ‘assessment tool’ so we can see the projected level of overall saving in Year1? Are there any links to the customer research you quote? Much obliged.Kind regards Craig