Green Deal and ECO Hilary Tanner LGA Insert

Green Deal and ECO Hilary Tanner, LGA Insert date www. local. gov. uk

Headlines from LGA survey of local authorities • 132 councils responded to survey on Green Deal & FITs • 87% of respondees had started to develop plans, 47% of those just started • 59% decided on a delivery partner, most likely to be green deal partner with 8% deciding to be providers • Lead department most likely to be housing with responsibility shared with environment & regulatory services and planning

Survey feedback on benefits of the Green Deal and common concerns Benefits: • Reduction in carbon emissions • Reducing fuel poverty • Potential to increase employment Concerns: • Lack of take-up • 3 rd parties mis-representing the Green Deal • Not suitable for low income residents

The Energy Company Obligation Carbon Reduction: Hard-to-treat properties only (solid wall insulation) £ 760 million available until 2015 All householders eligible 58% of the ECO Carbon Saving Communities: Affordable Warmth: Area- based schemes Reducing overall heating bills Aimed at social housing All measures £ 190 million available until 2015 Areas of high deprivation (lowest 15%) and rural with benefits 15% of the ECO Householders on multiple benefits – social housing not eligible ‘Fuel Poor’ £ 350 million available until 2015 27% of the ECO

Where ECO meets the Green Deal MEASURES Funded primarily by GD Finance e. g. basic insulation Funded primarily by ECO e. g. central heating Unsuitable for finance e. g. • Fuel poor or low income; • Low energy user; • Hard to treat housing Green Deal Finance Energy Company Obligation CONSUMERS Suitable for full finance e. g. • On higher incomes; • High energy user; • Low cost

Opportunities for rural authorities • Rural authorities more expensive under previous schemes because of transport cost and low density of buildings – will this change under the Green Deal? • Carbon Saving Communities (CSCo) with rural target – 15% of the target (to reduce carbon) must be met in rural areas – Recipients must be in receipt of one or more benefits

Considerations for councils • Brokerage – There are plans for the ECO to be siphoned through a brokerage system. This is to help organisations that are not energy suppliers to have access to this supporting finance. – Rumours that councils and social housing providers will not be able to directly trade within the brokerage, but will have to procure a green deal provider to do so – unless they become one themselves • Council reputation – Financial package that we will be selling to our householders – trusted by our householders

Considerations for councils • Protection of vulnerable householders – No guarantee over savings, or that cost of works will be less than savings – don’t want low income groups having to spend more – No solution for pre-payment meters (proportion taken off for charge) – Debt considered as Energy debt and householders can be disconnected for not paying the Green Deal charge

Considerations for councils in funding the Green Deal • Availability of Finance – Not clear how the Green Deal will be financed – Some councils prudentially borrowing to generate local schemes – Green Deal Finance Company seeking to pool funding (including that from local authorities) to bring the interest rates down. • Will people want to take this out? Should councils be encouraging them to do so? • Complicated product • Can sell other products in the home

Context • Climate local – support for council action on carbon reduction and climate resilience • Green deal as part of a range of options for households – to be aligned with RHI and FITs • Links with health and housing • Revised statutory duty under HECA

Next steps • Consultation on ECO Brokerage in Autumn • LGA supporting documents for councils – including help to navigate the ECO and partnerships with energy suppliers • LGA Green Deal Conference 16 November in London • Transition from existing schemes to ECO end of 2012 calendar year • Enforcement role for councils within the privaterented sector when minimum standards come into force in 2018 (EPC E)