[ Focus: Energy effi ciency ]
technologies, and many electrical contractors have become accredited under the Microgeneration Certifi cation Scheme (MCS). However, with the rates off ered from Feed-In Tariff s (FITs) lower than they were, a lukewarm reception to the much-touted Green Deal, and a delay to the introduction of the Renewable Heat Incentive (RHI), it’s a good time to examine how these schemes will develop in 2014 and assess their impact on electrical contractors.
The Green Deal
Launched with much fanfare in early 2013, the Green Deal is the government’s fl agship initiative to increase the energy effi ciency of domestic and non- domestic properties. It provides upfront fi nance for a series of measures by way of a loan that is paid back via savings on energy bills. Despite high hopes for a positive impact the
response has been extremely poor. By December, only about 220 Green Deal plans were underway, and more than 99 per cent of people who had their homes assessed didn’t go ahead. The cost of the loan – which is just under eight
per cent a year – is putting off many householders. Although loans are repaid over a period of up to 25 years, the debt is attached to the home rather than the homeowner, which means that the debt is passed on to any new buyer. The process itself is also over-complicated. Those
wanting to have work carried out need to get an independent assessment of their property by an authorised Green Deal Adviser. They must then present their assessment report to a Green Deal Provider, which will then decide whether to approve the fi nance package. If approved, the technology is fi nally installed by an authorised Green Deal Installer, which is contracted by the Green Deal Provider. There is some work being undertaken – primarily in social housing – but this is under The Energy Company Obligation (ECO) scheme. Part of the Green Deal, this allows some households to benefi t from a subsidy from their energy suppliers. This is designed to help householders who cannot achieve signifi cant energy savings without additional support, such as those living in low-income households or in ‘hard to treat’ properties. For contractors that have become Green Deal
Installers, any increased business is yet to materialise and it looks as though it will be some time before it happens – if at all. The ECA believes that incentives, such as reduced stamp duty or a reduction in council tax, are the only ways to rescue the scheme.
Renewable Heat
Incentive (RHI) Launched in November 2011 to the non-domestic sector, the Renewable Heat Incentive (RHI) got off to a slow start, but has gained momentum during 2013. Administered by Ofgem, the RHI makes it more
24 ECA Today December 2013
fi nancially attractive to install low carbon heating technologies such as ground and air source heat pumps, biomass boilers and solar thermal systems. Many commercial and industrial property owners have taken advantage of the excellent incentive rates on off er, which generate income over a period of 20 years. Metering was proving problematic, though, but
the government – this time, to its credit – acted quickly, and simplifi ed heat metering rules were introduced in September 2013. In the same month, it was decided that those with an RHI accredited installation must also submit an energy performance certifi cate (EPC). After some delays to its implementation, the
domestic RHI is set to open up for applications in the spring of 2014. It will potentially be available to private landlords, owner-occupiers, third-party heating system owners, social-housing providers and self-builders.
At the sharp end
Rupert Higgin, managing director of ECA member, TGE Group, gives a contractor’s perspective on the current energy reduction schemes.
What is the current state of the renewable energy sector? This is still an exciting industry to be involved in. However, you need to react fast, as both the domestic and international markets heavily infl uence it. Being slow to react to incentive changes or supply instability can heavily impact on your profi t margin.
Have schemes such as the Green Deal, RHI, FITs and ESOS had the desired eff ect? FITs and the commercial RHI have had a major impact. We began in 2007 as a domestic solar PV installer, and are now mostly commercial, with 60 per cent renewable electricity and 40 per cent renewable heat. The Green Deal has not impacted positively on our business to
date due to the low takeup. We already conduct energy audits for customers, and it would be interesting to see what qualifi cations or training ESOS assessors will require.
Are these schemes too complex? They are incredibly complex. That said, as long as installers are able to explain and guide customers through the various processes, while providing realistic predictions for return on investment (ROI), then we will manage. However, I’m sure the public would welcome a simpler process.
What advice would you off er anyone looking move into this type of work? There are always opportunities in this sector – it moves so fast that new avenues emerge on a continual basis. However, we will not see the profi t margins of 2010-11 again, so it may be less attractive than it was, and it remains fi ercely competitive. On top of becoming NCS accredited, another key piece of advice is
to establish a good, reliable supply chain so that time is not wasted in sourcing product and designing systems.
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