Green Heat Ltd and NIBE comment on the 2015 Spending Review and Autumn Statement

Green Heat Ltd

Peter Thom, managing director of Cambridge-based energy efficiency company Green Heat Ltd, fears more householders will be left out in the cold following Chancellor George Osborne’s announcements in yesterday’s Autumn Spending Review.

As part of a host of green policy measures, the Chancellor announced the Energy Company Obligation (ECO) scheme – which enables energy companies to fund energy efficiency improvements for households in fuel poverty – will be replaced with a “cheaper domestic energy efficiency scheme” intended to save 24 million households an average of £30 a year on their energy bills. The Renewable Heat Incentive (RHI) scheme is also to be reformed.

Peter Thom commented:

“Following Energy Secretary, Amber Rudd’s much anticipated ‘Energy Reset’ speech, George Osborne’s announcements do little to inspire confidence that our targets to reduce carbon emissions and tackle fuel poverty will be achieved.”

“Plans to deliver measures to improve the energy efficiency of one million homes by the end of this Parliament is all well and good, but this is a marked reduction in the number of households that received support during the last Parliament, leaving millions of people still struggling to pay unnecessarily high energy bills in an attempt to heat inefficient homes.

“I would welcome any consistent policy on energy supply and energy efficiency, but despite promises to prioritise affordable energy as part of ‘rebuilding Britain’, there is still no clear-cut commitment from Government that sets out a workable course of action.

“We know that gas is by far the cleanest fossil fuel and is connected to a very high percentage of homes and businesses in the UK. Significant carbon and cost reductions can be made by replacing older boilers and heating controls with the latest high efficiency ‘A’ rated boilers and smart controls, achieving system efficiencies close to 100 per cent. Consistent policy will help persuade people to do this.

“With a reduction in overall funding for energy efficiency schemes and no mention of the Green Deal, I can only assume – as I suspected – it will not be replaced, so I’m very keen to understand how householders will be helped to achieve these targets.”

Peter’s frustrations with the now defunct Green Deal have been well-documented:

“Since it was scrapped, we’ve actually been able to get on with the work we do – providing SAP ratings, EPCs and other related energy assessments – without being sidetracked by Government meddling and start-stop policy making.

“I was one of the scheme’s greatest supporters and tried very hard to make it work, but despite regularly raising our concerns with Government so improvements could be made, misleading qualification criteria and changing certification requirements continued to leave consumers frustrated and installers out of pocket. Less than 2 per cent of all installers bothered gaining accreditation as a Green Deal Installer and over 20 per cent of those who did left the scheme early as it was unworkable. The reality was the scheme diverted smaller installers like us away from delivering the improvements our customers want – and can benefit from.

“We have had too much stop/start inconsistent policy from Government which just confuses consumers and frustrates businesses. There are some important lessons to be learned from previous initiatives. We would urge any change of course takes into consideration the particular needs of smaller businesses, enabling them to fully engage with meeting the challenges of energy demands and carbon emission reduction.

“With the recent closure of so many green schemes leading to significant job losses, I think installation companies should look on the next one that comes along with caution. My advice is: participation in a Government scheme may seriously damage your wealth and your business.”

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Phil Hurley, managing director, NIBE comments:

During yesterday’s spending review, the Chancellor announced plans to reform the Renewable Heat Incentive (RHI) and deliver a £700 million saving. Despite this, Phil Hurley, managing director at NIBE, sees the outcome of the review as positive for the heat pump industry – hailing it as an opportunity to ignite future market growth.

Phil comments:

“The spending review has provided all-important clarity on two points: firstly, that the RHI will continue for the remainder of this parliament, and secondly, that the budget for it will be a significant £1.15 billion. While there’s no denying that a £700 million reduction in support for the scheme is a substantial cutback, all is certainly not lost for renewable heat in the UK. At NIBE, we take the review as reassurance that the government not only believes in the capability of the scheme to drive widespread investment in renewable heat, but also remains committed to meeting its 2020 carbon reduction targets.

“Although we don’t know at this stage exactly what the reforms will look like, or how they will affect RHI tariffs for heat pumps, we’re optimistic that this injection of confidence will have a positive impact on market growth. For installers, it provides the necessary ammunition to continue communicating the benefits of the technologies – and the financial incentives that back them – to their customers. For consumers, it reinforces the message that renewables are here to stay and that now is the right time to invest. And for manufacturers and other industry stakeholders, it presents a fresh opportunity to work alongside policymakers to ensure that heat pumps and other renewable heating solutions remain an integral part of the UK’s future energy mix.

“As part of future reforms, at NIBE we would like to see the MCS process simplified and made more cost-effective. Removing some of the red tape around accreditation is the most effective way to make the renewables opportunity more attractive and accessible for installers – which is a vital ingredient to the successful rollout of renewable heat on a national scale.”