As part of the Energy Bills announcements earlier this week, the government outlined proposed changes to ECO, and announced that £540 million will be made available over the next three years to boost energy efficiency. £450 million of the £540 million will be aimed at households and private landlords. Alongside this, the Green Deal is also being improved to make it more attractive for consumers and to remove unnecessary cost for companies.
Reforming Green Deal
In establishing Green Deal, we set the conditions to grow Britain’s energy efficiency market. It is still early days but activity so far shows a growing number of participants are keen to take advantage of this new market and consumers are being inspired to make their homes more efficient. Over 100,000 assessments have been undertaken since January, with our research suggesting they are being well received and action taken: over 80% of those households assessed have already improved or are taking active steps to improve their home’s energy efficiency. That’s an encouraging start. But new markets take time to establish and Green Deal is no different.
In these formative months for this new market we have worked closely with industry and listened to consumer groups and individual consumers. We have heard the many voices telling us the Green Deal needs to be simpler and more accessible to business and consumers alike.
So among this week’s announcements are several proposals to streamline and improve Green Deal: we want to make it easier for businesses to enter this developing market and for consumers to act to make energy saving improvements to their properties. And we want to work with you to make that happen.
New support for energy efficiency
The proposed new incentives and support we outlined earlier this week will boost take up of energy efficiency measures both for households and for the public sector too. Worth £150m each year for the three years from 2014-15, they will be designed to reward new rather than replacement energy efficiency improvements, dovetailing with the Green Deal to leverage private finance. Importantly, they will ensure that the impact of the changes proposed to ECO as a result of the Green Taxes review is carbon neutral.
This package will include:
Together with additional, further savings expected to be made from the transport sector, with details to be announced in the Autumn Statement, these schemes will, in total, be designed to deliver total carbon savings of around 0.6Mt per year to maintain progress towards meeting our legally-binding carbon budgets to 2020 and beyond.
We will work with Green Deal providers, industry and consumer groups to design these new schemes to start from April.
We recognise the importance of giving certainty to industry at this time so we are making some immediate changes that will give a real boost to the supply chain while we design the new schemes and ahead of consulting on our proposed changes to ECO.
There has already been high demand for funds under DECC’s Green Deal Communities competition so a quadrupling of the money available to English local authorities this year to £80m to promote Green Deal on a street by street basis will be a great opportunity for the industry and for the energy efficiency of those communities.
Alongside the Green Deal cash back scheme, which stays open, it will incentivise the delivery of hard to treat cavity and solid wall insulation.
And we will work actively with obligated energy companies to promote stronger integration of ECO and Green Deal finance so more households can improve their homes
Energy Company Obligation
The changes to ECO, to be consulted on, include:
Streamlining and improving the Green Deal: making things simpler
Alongside this package of support for Green Deal, we have also published this week a set of improvements to the Green Deal – to make it simpler and quicker for householders to improve their homes as well as stripping out time and cost for industry, while ensuring that consumers remain properly protected and can rely on work done under the Green Deal Quality Mark.
Starting from January and then over the following months we will make changes in three broad areas:
The market is already seeing simpler documentation available from the Green Deal Finance Company, for example. By speeding up the processes through which Green Deal Providers are approved then giving those companies more support once they are approved, we will help them to become active quickly, giving consumers more choice in future.
I hope you will welcome these proposals as an important step.
The Green Deal will need to adapt as the energy services market develops, and as consumer attitudes to energy efficiency change. We will continue to talk with you, across the industry, about your early experiences over the last ten months, and to research how consumers are finding the Green Deal. We want to hear your views.
The Government is resolutely committed to the Green Deal. We will continue to work with you to make the Green Deal a success.