The October launch of the Green Deal came and went without so much as a press statement from DECC, leaving industry vociferously airing its concerns over the uncertainty that surrounds the scheme. With little sign of this changing, it’s time for industry to focus on what is certain, writes SIG Insulations head of business development Andrew Orriss.
‘Soft launch’, ‘phased introduction’, ‘delayed’ – no matter how you phrase it, there is no escaping the fact that uncertainty still surrounds the Green Deal, even after its long-awaited October launch. The official line is that while consumers can arrange a Green Deal assessment from October, the Green Deal proper will not be ‘open for business’ until late January 2013 – although for obvious reasons, there are some who are beginning to question whether even this is likely.
For industry, there is nothing more frustrating, prohibitive and damaging to growth than uncertainty. It is important, therefore, that we focus on what we know is a certainty; and that, at the moment, is the Energy Company Obligation (ECO).
Unlike the Green Deal, ECO is not solely dependent on consumer interest and uptake. Funded by energy companies through a levy on energy bills, ECO will focus on improving the homes of vulnerable tenants and owners. Like the Carbon Emissions Reduction Target (CERT) and Community Energy Saving Programme (CESP) schemes, ECO will set specific targets for installation of efficiency measures that energy companies will be obliged to meet. As a result, we can predict with more confidence what it will mean in terms of output and activity, and what we as businesses will need to do to service its requirements.
Ultimately, ECO will lead to a significant reduction in loft insulation top ups and blown cavity walls, and a large increase in solid wall measures – both internal wall insulation (IWI) and external wall insulation (EWI). It will also see a boost in boiler replacements and, to a lesser degree, installation of photovoltaics, draught proofing and floor insulation.
Whilst ECO is not without its challenges for installers of traditional energy efficiency measures, it does create opportunity for both established providers and new businesses to move into new, higher value applications. If plasterers and drylining contractors are willing to broaden their offering into external and internal solid wall insulation, for example, they will open up a market that is predicted to double in output year on year for at least the next four years.
This transition isn’t going to be easy to navigate, and we at SIG are working closely with energy companies and government to try and find the best way forward. However, if businesses are prepared to align their operations with the demands of new legislation, ECO in particular, they will be stronger for it, and will have created a much-needed springboard to future growth.