Thursday 1 May 2014: Response by Steven Heath Director – Public Affairs and Strategy for Knauf Insulation Northern Europe to the Department of Energy & Climate Change’s (DECC) announcement of extra money offered to homeowners for green home makeovers.
“Today’s announcement by DECC that more money will be available to householders in England and Wales from June who install energy-saving measures, such as insulation and new boilers under Green Deal, will be a much needed boost to the flagging scheme. Stronger incentives have always been required to drive take-up; this scheme offers a level of simplicity that will be attractive to installers and homeowners, whilst the money for new home movers recognises the need to take advantage of key renovation trigger points early on – so all very positive.
“However, there is a very notable absentee from the list of approved measures: loft insulation. Whether as a top up or complete install, loft insulation is one of the few simple and effective measures that meets the golden rule of Green Deal. To not include this in the measures means we are likely to continue to see boilers installed without cost effective loft insulation offered to the householder. As a matter of fact, the installation of boilers without addressing insulation was seen as one of several key failures in both the Energy Company Obligation (ECO) and the existing cash back schemes!
“Indeed, if we look at the information published to date, it seems Solid Wall Insulation (SWI) can now receive a £6,000 subsidy without a requirement or cash back incentive to install loft insulation if it is recommended. So once again, we see a Government scheme incentivising an expensive measure at the individual property level but ignoring a cost effective one.
“Additionally, by requiring a second measure to be installed alongside low-cost Cavity Wall Insulation (CWI), but leaving the even lower cost loft insulation (top up) off the list, will leave take up of CWI aligned with the more expensive measures listed, like a new boiler.
“The main question is where incentive packages are offered, will they encourage installers to offer, and homeowners to agree to, a sensible fabric-first multi-measure approach to renovation? The latest scheme on offer unfortunately falls short by creating perverse incentives that mean cash back offers to homeowners may not reflect what is best for them and their property in the long term.
“It must also be remembered that this ‘new’ money on offer is not additional, but rather an attempt to make up for the devastating cuts to the ECO sister scheme announced last Christmas. Government desperately needs to consider the size of the challenge more seriously, recognise the problem is a long term one and start designing policy interventions that match the scope of that task: which ultimately boils down to driving a higher value for energy efficient homes in the minds of those that live in them.
“We have long argued that a tax incentive linking the efficiency of the whole property to the amount of stamp duty paid, offers a more impactful approach than simple cash inducements. It also tackles the ‘which measure to incentivise’ issue hampering current schemes and offers what is desperately missing - a whole house view. We remain hopeful this will be reflected in the imminent manifestos of all parties.”