What are the implications of the new rules that take effect on April 1st? And a few thoughts on electric heating…

ECO is Ofgem’s main environmental scheme focused on (1) retrofitting insulation to domestic properties in England, Wales and Scotland and, increasingly, (2) providing measures that help the vulnerable / low-income segment of the population to reduce their heating costs.

Periodically the government consults the industry, considers things and makes changes to the scheme.

April 1st this year sees a major change to the way that the scheme runs with large swathes of the administrative burden being removed.

The need for installers to produce energy performance certificates will end as will the need for a measure to be recommended by a Chartered Surveyor or Green Deal Assessor.

What does this mean in practice though?

ECO Matters specialises in insulating blocks of flats. The largest block we have insulated is 13 storeys high in places and has 127 separate flats. We paid over £6,000 for reports that are not required post April 1st before we fitted any insulation. If residents are getting the insulation for free (asking 127 sets of residents to each make even a modest contribution is like herding cats) including Eco Matters picking up the five-figure cost of enormous cherry-pickers to reach the top floor that is a very meaningful amount to be saving!

A few words about electric heating

Fortunately for us all the above 127 flats had electric heating. If even 20% of the flats had used gas boilers then we could not have carried out the work profitably. The form of heating is very important for an ECO installer. We earn more from working on electrically-heated flats than those that rely on gas as their fuel for heating.

This is because ECO aims to reduce carbon emissions and /or costs and electricity is to quote the Energy Saving Trust: “the most expensive and carbon-intensive heating fuel available in the UK”

Electric heating is bad because of the way we generate electricity in this country

Hold on a moment the manufacturers of electric storage heaters and infra-red heaters may say, electric heating in your home itself results in no harmful emissions and it is 100% efficient! Both statements are true. What’s not to like about that?

Quite a lot it turns out! Although we generate an increasing proportion of our electricity from “clean” sources such as wind or solar we are still heavily reliant on burning fossil fuels to produce electricity in large power stations.

Unfortunately generating electricity in large power stations by burning fossil fuel is inefficient. Much of the energy goes up into the air in the form of steam or in some cases even goes into the sea…

…Brexit, the Caribbean and Shoreham-on-Sea

Maybe Brexit has made that Caribbean holiday too expensive this year?

solar energy heats the beautiful Caribbean waters

the Caribbean

Fear not, help is at hand in Shoreham-by-Sea, West Sussex of all places. Some of the energy that does not get transformed into electricity finds its way into the nearby sea! Good for the odd swimmer, not so good if you, like many polar bears, don’t like the idea of rising sea temperatures.

http://www.theargus.co.uk/news/9486243.Sea_swimmer_finds_bathing_water_as_warm_as_Caribbean_near_Shoreham/

Shoreham-on-sea, the power station produces energy for elecric heating and heats the nearby water too

Shoreham-on-sea

…but electic heating can be very good if you get a heat pump…

Heat pumps (eg ground source, water source or air source heat pumps) use electricity much more effectively to provide heat and hot water. Heat pumps are the future for areas without ready access to mains gas. Freely available energy from the ground, a water source or simply from the air boosts the efficiency of an electric heating system. A well-designed heat pump can generate 4 units of heat from a single unit of electricity – that makes it 400% efficient.

The Renewable Heat Incentive provides a strong reason for consumers amd busineses to switch from direct electric heating, oil or lpg to a renewable form of heating. It is great news during very difficult times for many British renewable energy companies

So who are the winners and losers from the changes to ECO?

Those in fuel-poverty or on benefits that mean they are eligible for the Help-to-Heat part of the scheme can hope to gain more benefit going forwards. Much more of the overall spend will be coming their way.

Off-gas communities will get more attention than previously.  Installer will earn more for working on off-gas properties where the resident is eligible for the Help-to-Heat part of the scheme.

More broken electric storage heaters will get replaced. The combination of

  1. an already impoverished resident; and
  2. dual tariff fuel (cheaper at night, more expensive during the day); and
  3. broken electric storage heaters meaning that the property relies instead on electric panel heating; and
  4. extra-expensive daytime electricity due to the dual tariff rate

is particularly insidious.

Minimum energy ratings legislation will oblige unscrupulous landlords to make improvements to their properties. Changes to ECO will mean grants towards the replacement of broken storage heaters. These are undoubtedly steps in the right direction in tackling fuel poverty.

Losers include:

  1. Domestic Energy Assessors that until now have produced energy performance certificates for use in ECO; and
  2. Chartered Surveyors – the changes end the need for their reports in order to insulate properties

Energy performance certificates must still be produced in some instances in the social housing sector still.

Overall

For the vast majority of people the changes are good news.

  1. The costs of delivering ECO will fall due to the reduced administration. More insulation will be installed. And less of an impact on the general public’s energy bills from the scheme.
  2. Compliance with the scheme’s myriad rules should become at least a little simpler.
  3. Offers made by installers to the public should become clearer and simpler to understand.

Hopefully there will be no Ofgem notification at the end of the first day that actually it was all just an elaborate April Fools Day joke!