There’s a major catastrophe under way and, as far as I can see, with a very few honourable exceptions, no-one’s reporting on it, but it’s a catastrophe nevertheless. The hon. exceptions are the estimable Inside Housing and the Guardian (only they seem to have moved on).
The catastrophe I’m talking about is that the whole programme of solid wall insulation as we know it, which is supposed to be advancing via the Energy Companies Obligation, has almost completely disappeared before our eyes. And it’s a catastrophe for the simple reason that Britain has some of the least energy efficient housing in Europe. So much so that if we do not seriously get to grips with our collective home energy efficiency now, then we severely lessen any chance we might have to reduce overall carbon emissions to anything like acceptable target levels by the 2030s. And of course it isn’t just me saying that; the Committee on Climate Change is clear that to meet the terms of the third carbon budget (early 2020s) we need to have externally clad (or otherwise insulated) something like 2.2 million homes. By the fourth budget (assuming the government doesn’t abrogate its commitment to it) some 3.5 million homes will need to have been treated. Last year, as DECC records, about 16000 such homes were clad, making it only a matter of …ooh…230 years or so before the 2020s target is reached.
And over the past few weeks it’s become apparent that any hopes that we might have had of some progress, any progress, being made in that fundamental task are being dashed. This is because energy companies are pulling out of what could have been the white hope of ECO; the local area-based schemes that had been developed in good faith by local housing associations and local authorities across the Country.
Because ECO placed an obligation with a challenging level of carbon reduction on energy companies up to 2015, some solid –looking partnerships had developed between social landlords, local authorities, energy companies and others. The aim of such partnerships was to discharge parts of those obligations through the treatment of thousands of solid wall and hard to treat properties using an area based approach. In Southampton a deal to begin such a programme was at an advanced stage; deals had been struck, partners agreed, programmes designed at no little cost to the local authority, and residents had been informed that cladding and a potential considerable reduction in their bills was soon to arrive.
But now as a result of the lengthening of the ECO’s ‘commitment’ and the emptying of the CERO part of the scheme to fund easier to achieve treatments, e.g. loft and cavity foam measures (which should have been the province of the Green Deal), virtually no area based schemes, as far as I can see, are now standing. The energy companies, being no longer obliged to work at the speed or to the extent that they previously were, are simply pulling the plug on their contributions. Technically, the ECO extension until 2017 means that companies will now be obliged to only insulate around 100,000 homes by 2017, instead of the target of about 180,000 by 2015. Because of the way the ECO obligation is calculated, energy companies can now plump for cheaper measures in order to discharge their obligation. Bearing this in mind, I would be most surprised now if anything like that number of properties are actually insulated.
It might be worth reminding ourselves of what was put forward as a real prospectus for ECO less than two years ago. Then the government said:
One of the major challenges for the ECO and Green Deal is the changing nature of the types of measures that need to be delivered. CERT, by focusing on delivering low-cost measures, has been very successful at installing simple loft and cavity wall insulation. From 2012 Green Deal finance will offer a route to deliver the remaining low cost loft and cavity wall opportunities at no upfront cost and without need for subsidy. However to meet our carbon budgets cost effectively, we will need to go far beyond just lofts and cavity walls, and move towards the next most cost effective measures.
However, some 7 million of the most difficult to treat homes require some form of solid wall insulation. The Committee on Climate Change recommended in their 2009 Report, ‘Meeting Carbon Budgets – the need for a step change’1that 2.3million solid wall homes will need to have taken up solid wall insulation by 2022 in order for the UK to be on track to achieve carbon budgets. ECO support for these properties will help drive this market, and the supply chain to fulfil it, enabling us to unlock the resulting carbon savings more cost effectively.
Now the Green Deal is on life support and ECO is in ruins. Quite a catastrophe really.