PROFESSIONAL BUILDERS MERCHANT

Guest

Comment from guest bloggers

November 17 2011

“The Green Deal and ECO offer no real incentive to upgrade. ”

Knauf Insulation has joined calls for the Government to build on the current Green Deal and Energy Company Obligation (ECO) proposals by aligning the plans with an ambition to insulate all lofts and cavity walls by 2015. However, Managing Director John Sinfield, is concerned that the scheme offers little incentive to homeowners to take the necessary steps.

Our graph illustrates that, despite longer term increases in demand for insulation in the general building market, the lack of focus on lofts and cavities in the funded residential refurbishment market will have a significant impact overall for glass mineral wool. This potential ‘cliff edge’ has massive implications, not just for manufacturers, but also for consumers, installers and the Government.

We very much welcome the Government’s commitment to energy saving initiatives such as the Green Deal and ECO – they have the potential to transform the energy efficiency of our housing stock. However, without some additional incentives to drive take-up, our market forecast highlights a drop-off in insulation up-grades, meaning lost carbon savings for Government, and more importantly in these times of increasing energy costs, lost ‘cash’ savings for homeowners.

Our forecast is based on detailed analysis of both the Green Deal / ECO and the general construction market. Loft and cavity wall insulation will currently not be subsidised for the ‘able to pay’ sector in ECO - CERT’s replacement - with the Green Deal likely to offer the measures only as part of a total package to upgrade a home. This package is likely to include other higher priced measures with the capital cost being placed as a debt on the energy meter. Initial trials have demonstrated that many homeowners are unlikely to take on loans of significant value, meaning the opportunity to achieve the ‘easy wins’ i.e. loft and cavity wall insulation upgrades will be lost.

The Green Deal and ECO in their current form offer no real incentive to upgrade loft and cavity wall insulation for the ‘able to pay’ sector, yet require the insulation industry to manage the transition between straightforward insulation measures to the harder to treat solutions overnight. This approach will damage insulation industry capacity, miss out on significant low hanging fruit and ultimately impact on Government’s low carbon ambitions for the residential sector.