Examination of Witnesses (Questions 280-291)
ENERGY SAVING
TRUST
31 OCTOBER 2006
Q280 Chairman: The reason I challenge
it—and this is not a session on fuel efficiency, and I know
that I have slightly closed the exchanges earlier on that point—the
low-hanging fruit in some of the carbon reduction is in terms
of energy efficiency, condensing boilers, and solar water heating
systems having a huge part to play here in collaboration. I have
a slight nagging doubt at the back of my mind that you are such
enthusiasts for domestic CHP that you are trying to discourage
us from putting in condensing boilers now, and getting the immediate
gains, while we wait for Stirling engine CHP in 2010 and fuel
cells in 2015. Is that cynicism misplaced?
Mr Samuel: I can assure you that
we are working very hard to encourage individuals to invest in
energy efficiency and to change their behaviour. In the case of
condensing boilers it is a mandatory requirement anyway, and the
next generation of new technologies is microgeneration.
Q281 Chairman: Sadly, A-rated boilers
are not mandatory.
Mr Samuel: We would love it if
A-rated boilers became mandatory.
Chairman: So we might take up solar water
heating. You might go on the Worcester Bosch website and see some
of the gains being made by some of my constituents at present!
Q282 Mr Hoyle: The Chairman has just
touched on the fact that it is a very expensive programme up-front.
With 17 years to get your payback on solar panels, there is a
worry that it probably would need to be replaced. So I agree with
you: I am not quite sure how efficient and what good value for
money that is, and that is something we ought to be aware of.
What is interesting, however, is this. In terms of microgeneration,
as much as David Cameron wants the windmill on the house, is it
really about those who can afford to play at "Save the Planet"?
How do we engage people who do not have money to spend on, say,
a B&Q windmill—£1,500, or £1,498, or whatever
it be—for a £300 payback? How do people pay that money
up-front? The trend we are seeing is that the wealthy greens can
play their part, but we are not engaging people on low incomes
or people with no incomes, such as pensioners. How do we help
them? How do we make a real difference? What usually happens is
that they have not been able to insulate their homes; they have
to use more energy; and yet there is nothing there to offset it.
Mr Samuel: I think that microgeneration
can help in resolving fuel poverty.
Q283 Mr Hoyle: I agree.
Mr Samuel: Under the Energy Efficiency
Commitment, certain microgeneration technologies—at the
moment it is the heat technologies—are eligible. As the
priority grows, and within the Energy Efficiency Commitment it
becomes more difficult to install energy efficiency measures,
I would like to think that you would see an increase in the installation
of microgeneration in that sector. The £50 million, phase
two, of the Low Carbon Buildings Programme does allow social housing
to become eligible for grants. I would like to see that pot of
money increase so that it can be mainstreamed much more within
the social landlords. Private landlords are very difficult to
tackle. In terms of changing behaviour, you do have to focus on
those people who want to change or who are open to the arguments
initially, because they are the low-hanging fruit; they are the
ones who are going to invest. That is not to say that you should
not be targeting others as well. One of the things that we have
found is that people who are interested in installing microgeneration
as a result become more interested in energy efficiency and the
installation of energy efficiency measures. So you can then cross-sell
and again can transport efficiency. The key is about raising awareness,
providing information and allowing individuals to take responsibility
for their own actions. They can make a difference.
Q284 Mr Hoyle: I understand that
but you still have not answered the real problem, have you, because
what we are talking about is low-income households. How do we
get low-income households to be able to have the ability to buy
the windmill that David Cameron can afford? That is what I want
to know. What are you going to do about it and what should we
be doing about it to ensure that it is available to all? Because
if you are on a low-income household you are not going to be able
to afford the £1,500 upfront or the solar panels, or whatever;
so they will always be excluded. They may be able to apply for
loft insulation, which is great, but has the time not come where
we ought to be saying, "Yes, let us insulate the house but
let us give you some microgeneration with it"? What I want
to know is what can we do about it and what should we be doing?
Or what are you doing about it, even better?
Mr Samuel: We would like to do
something about it. Basically it depends about providing finance
and overcoming the finance barrier. To some degree you might be
able to do it through energy service contracts where you do not
have to pay upfront. However, that again is probably going to
be better suited perhaps to the middle target area, the people
who can afford to pay something but not necessarily upfront. So
coming back to the priority group and the fuel poor, ultimately,
as energy prices rise and the energy efficiency measures have
been implemented, then you have to provide the sufficient finance
upfront to install these technologies which have zero running
costs and will help take people out of the priority group.
Ms Wiltshire: I think we also
need to be clear about where we are in the market with microgeneration
as well because we are at this very early innovator/early adopter
stage and at the moment we are targeting the people who can afford
to pay on purpose; these are the people who are going to bring
the costs down, okay, with a government subsidy to help them do
that, but they are the people who are overpaying, if you like,
for these measures at the moment in order that the costs come
down eventually. So I think we do need to be quite clear that
that is the priority at the moment, to get these measures in in
volume.
Q285 Mr Hoyle: I think you have answered
it in the final question, have you not? The way you get down is
by having volume; the way to have volume is to open it up to everybody
and make it available to everybody and to make it affordable.
Would you agree with me that maybe we ought to have low-income
grants? That is where we should be heading.
Ms Wiltshire: Yes, in fact we
are running a pilot with the Scottish Executive at the moment
about installing biomass and ground source heat pumps under the
Government grant scheme, Warm Deal, up there, so we are doing
that as well for some of the technologies that are more market
ready. Again, we need to distinguish between the different technologies,
and the ones at the moment that are more expensive we clearly
need to target those who can afford to pay for it.
Mr Samuel: Some of the more innovative
social landlords are investing in these technologies as well,
which is good.
Mr Wright: I wanted to know what discussions
you have had with local authorities, for instance, where they
have warden service accommodation for pensioners and so on, whether
they can actually put in a scheme to cover a whole development?
Q286 Chairman: And can I just add
something? Surely we should be encouraging social landlords to
look at things like ground source heat pumps very aggressively
because it is a huge opportunity to reduce fuel poverty amongst
their tenants.
Mr Samuel: Without a doubt. In
response to your question, we have been working with local authorities.
Unfortunately our funding has recently been cut so our local authority
activity is not as strong as it has been in the past. We would
certainly like to work much more closely, not only with local
authorities but also with the private social landlords as well.
Q287 Mr Wright: So is this going
to come up in discussions to try and reinstate or increase that
funding?
Mr Samuel: We are currently in
discussions.
Q288 Mr Hoyle: I think my colleague
is absolutely right, that if we take most areas we all have a
concentration of old people's properties, bungalows, and in general—I
do not know—probably the last time we saw big schemes like
that being built was in the early '80s and we have had nothing
since. So in reality what we ought to be doing is to try and improve
their value by ensuring cheap power with a central, whatever,
windmill, whether it is heat transfer, I do not know, but we ought
to be doing that. So what we ought to be saying is that we need
grants to the local authorities to encourage them to take up the
challenge and let us throw down the gauntlet to them; is that
what we are saying?
Mr Samuel: It is, and to help
local authorities understand the complexities of microgeneration
and to install the best products in the best locations.
Q289 Mr Hoyle: So you actually write
out to the chief executives of local authorities, and if I were
to say to the chief executive, "Charlie, have you received
a letter about the initiatives and the new schemes?" you
would be able to tell me yes?
Mr Samuel: Probably, not, unfortunately.
Q290 Mr Hoyle: But you will be able
to tell me next time?
Mr Samuel: We would have liked
to be able to have done that but with our local authority programme
we have been writing to chief executives and certainly working
with a number of local authorities, but unfortunately it is a
smaller number than we would have liked—it is not everyone.
Q291 Chairman: Thank you very much.
Unless there is anything else you feel we have not covered, and
we have your very good memorandum, of course, as well.
Mr Samuel: Thank you for the opportunity
to provide evidence.
Chairman: We are very grateful to you
and we are very grateful to you for your forbearance in putting
up with cancellations. Thank you very much indeed.
| 
