It’s a Government initiative to insulate eight million of the boxes that some of us live in, but for those willing to play, is there any money in the other box…?
Just in case you haven’t noticed, in October 2012 the Government will launch its much vaunted Green Deal initiative. DECC, the government department driving Green Deal openly describes it as a building programme, and there is no doubt that if Green Deal happens in the way the Government intends, it could be the miracle that this sector is desperately looking for, bringing work that has been on prison rations for almost four years.
The UK Government is committed to reducing the carbon footprint of the UK and a significant chunk of the UK¡¦s current energy consumption is used to keep old houses as warm as we now expect them to be (so we can eat Sunday lunch in a t-shirt rather than having to dress up like Heathcliff in a force ten on Ilkley Moor..).
Previous initiatives such as CERT and CESP haven’t had the impact needed and will end in December 2012. CERT and CESP failed to catch on because the improvements had to be paid for up front and, with the benefits being long term, householders were reluctant to take on the burden despite in some instances the full cost being available through a grant.
Green Deal is a framework that allows home insulation to be done at no up-front cost, essentially by a mortgage type system whereby around £1.3 billion per annum (for at least three years) of funding is made available from energy companies as part of the Energy Company Obligation (ECO) into Green Deal
Providers. These providers will then act as the bank for all those wanting to install approved insulation measures to their house. Consumers will pay back the cost
of such improvements through the resulting savings in their energy bills¡¨ If the house gets sold, the debt stays with the house.
Where Green Deal starts to get really interesting is that 60 per cent of ECO funding (the Carbon Saving Target, worth around £0.8billion per year) is for insulating Hard To Treat houses (HTTs), primarily older houses with solid walls and unsuitable for cavity wall insulation. The approved measures for insulating HTTs are External Wall
Insulation (EWI) and Internal Wall insulation (IWI). To us, that means either insulated render systems for EWI or Insulated drylining systems for IWI, both of which are skills that go to the heart of the plastering and drylining industry.
In theory, EWI is preferable but simply not practical on all houses and hybrid combinations of both EWI and IWI will be needed. In practice, the EWI and IWI systems
that will be used are the same systems that this industry uses in new build projects, day in, day out; it is only the context of their use, in refurbishment, that will change.
The current installation rate for solid wall insulation is around 20,000 per year; Green Deal will require a tenfold increase to around 200,000 per year by 2015. The Energy Company Obligations (ECO) are exactly that ¡V the energy supply companies are obliged to reach their project targets or they will be heavily fined, and so the pressure is on to deliver. A quarter of the worst energy perfuming buildings (with an EPA rating of G) are in the private rented sector, but in April 2018 it will become unlawful to rent out a house or business premises that do not meet a minimum EPA rating of E, and from April 2016 a landlord cannot refuse a reasonable
request to upgrade from a tenant – upgrading work will be unavoidable.
The manufacturing and distribution companies have got wise to the potential market and are organising training and Green Deal seminars. But there is a significant
absence of companies lining up to be authorised installers!
Part of that would appear to be because to Government has been led a bit up the garden path into thinking that there are insulation installers who will just retrain to
deliver Green Deal. But the guys who do cavity wall insulation wouldn’t have a clue if they were asked to fit an insulated render to a house, even less if they had to fit an
insulated plasterboard system and make sure there was no thermal bridging. This is bread and butter work for our sector and here is a huge opportunity for those installers that are prepared to adapt their skills to work in the refurb environment.
There are different business models available for those that want to get involved, from basic approved sub-contracting as local installers, chosen by the householder, or
recommended by a big Green Deal Provider such as B&Q. For the more entrepreneurial there’s the opportunity to take control of a bigger chunk of the process and
build a significant niche business, possibly securing some of the larger rented sector contracts from councils or housing associations.
Construction doesn’t stand still. Survival isn¡¦t about the strongest, it’s about those most able to adapt to new climates and Green Deal is a serious building programme, albeit in disguise. With eight million properties needing work and energy companies obliged to spend £1.3 billion to do something about
it, what exactly are we waiting for?