Green Deal and ECO - Secretary of State
21st February 2012
The Rt Hon Edward Davey MP
Secretary of State for Energy and Climate Change
Department of Energy and Climate Change
3 Whitehall Place, London, SW1A 2AW
Dear Secretary of State,
Firstly we would like to congratulate you on your recent appointment to this most critical Government role and we look forward to working with you going forward.
As individual organisations, the majority of signatories to this letter have submitted their own detailed response to the Government’s recent Green Deal and Energy Company Obligation (ECO) consultation. However, we are jointly writing to set out those areas where we have shared concerns that we believe need addressing urgently in order to ensure a successful transition to the Government’s new flagship policies.
Whilst we support the approach in principle, as currently designed the Green Deal and ECO will not deliver to their full potential. By the end of 2012, the Association for the Conservation of Energy projects that there will be some 6.2 million outstanding fill-able cavities and 8.5 million outstanding fill-able lofts. Despite this, your department’s own Impact Assessment estimates that there will be a drop of 93% in the loft insulation market, and 66% in the cavity wall insulation market.
The Government's Carbon Plan commits to insulating all lofts and cavity walls by 2020 yet the primary policy tools to deliver this objective will fall well short. Although additional drivers have been discussed since the Impact Assessment was published, there is nothing yet proposed that will make up the gap between the Carbon Plan objective and its primary delivery mechanism.
Signatories to this letter have differing views on details such as the societal distribution for the ECO and which measures, and in what numbers, should be eligible. However, there is unanimous agreement that to enact a policy that does not exploit the remaining opportunity in loft and cavity wall insulation, the most cost effective ways to reduce household energy bills and carbon emissions, fails to offer best value for money for those that will ultimately pay – whether through general taxation, the energy bill, or Green Deal loans placed on energy meters.
An independent report recently suggested 3,000 jobs may be lost in the loft and cavity wall insulation industry as a result of Government’s proposals1 and this is also of grave concern to the signatories of this letter - not least because the proposed approach will put at risk many of the companies best suited to deliver Green Deal packages and make the required transition to Solid Wall Insulation to support Government’s ambitions in this area.
There are evident tensions between the social, environmental and economic objectives assigned to the Green Deal and ECO. As the Government considers consultation responses on these tensions, we would jointly ask that the final policy landscape captures the remaining cost effective loft and cavity wall insulation potential.
We would be pleased to meet with you to discuss potential solutions to help resolve the tensions described above and deliver a smooth policy transition for the consumer, industry and Government.