Energy Bill

Memorandum submitted by Wolseley UK (EN 13)

About Wolseley UK

1 Wolseley UK is the UK operating company of Wolseley plc, the world's number one distributor of heating and plumbing products and a leading supplier of builders' products to the professional market.

2 As the UK's leading supplier of heating and plumbing products including central heating systems, bathrooms, showers and drainage, we recognise that we have a key role to play in improving and promoting energy efficiency and believe that by working together with Government significant changes can be made that will result in UK homes being made more energy efficient. Based on our business experience we have been involved in the DECC Green Deal Capacity and Innovation Forum chaired by Paul Morrell.

3 This briefing incorporates the views of our trading brand Plumb Center - a specialist supplier of domestic lightside products including central heating equipment, plumbing, drainage, bathrooms and showers. It has more than 480 branches throughout the UK.

Wolseley UK Submission

4 We welcome the commitment by the Government in the Energy Bill to establish a Green Deal for households to invest in home energy efficiency improvements. In our view, for the Green Deal to be successful, it is vital that installers play a central role in the effective delivery of the scheme. Without trained installers being a central part, the scheme will be limited in its effectiveness. It is also vital that other packages being implemented by the Government, including the Renewable Heat Incentive and feed in tariffs, are co-ordinated effectively so that there is a clear incentive to all households.

5 There are two serious risks associated with the Green Deal process and they are that:

i. The process is too long and complicated which will compromise consumer take-up and the potential for applicants simply giving up during the process.

ii. The process becomes too expensive since each participant will be looking to generate revenue and a new profession; ‘the accredited assessor’ will add yet another cost.

6 In addition to using our own business knowledge we also use our insight into the installer perspective on renewables (a group that have no formal representation but whose involvement is key) which we gained by commissioning research using focus groups this Spring, conducted by Wax PR and Marketing.

7 The general consensus amongst the focus groups is that moving towards renewable technologies is important, but given the current economic climate, strong and consistent support will be necessary to stimulate uptake. Homeowners are being faced with increased household bills and decreased job security and do not have the capital outlay to invest in renewable technology for their home. The Government therefore needs to ensure that the incentives to take up the Green Deal are clear and communicated effectively to the population.

Clause 1: Green Deal Plans

8 The first clause sets out what a Green Deal plan is and the requirements that need to be met before a plan can go ahead, which includes the qualifying energy improvements.

9 Key to the success of the Green Deal is making sure that a wide range of measures can be included in the scheme. This relates to subsection (4) point b of the clause:

the energy efficiency improvements fall within a description specified in an order made by the Secretary of State ("qualifying energy improvements")

10 We have been concerned that the initial focus of the Green Deal was primarily on insulation, as we believe that the widest possible range of technologies should be included in the Green Deal to ensure maximum benefit. We were therefore pleased to see a wide range of measures included in the recent publication of Green Deal measures by DECC.

11 Another possible barrier to the Green Deal that needs to be considered is cost. Home owners are frustrated by rising fuel costs, but are less inclined to look for a solution because of the outlay costs. Therefore subsection (6) is important, as the need to pay in instalments is vital to make the Green Deal more accessible.

12 Due to the scale of the challenge we believe that the Government should make the case for the immediate promotion of practical low cost measures across a wide range of technologies including heating controls, low energy pumps, water treatment etc. To ensure customer take up, the programmes need to promote simple energy efficiency.

Clause 2: Green Deal Plans: supplementary

13 Having a wide range of measures is crucial to the effectiveness of the Green Deal. Subsections 4 to 6 define the range of measures that fall within the definition of energy efficiency improvements that may be eligible as qualifying energy improvements.

14 Clearly one of the principal barriers to adoption of some measures is the relatively high capital cost for installation. The Energy Savings Trust estimates a typical installation cost of circa £6,000 to £10,000 for an air-to-water heat pump and circa £9,000 to £17,000 for a ground source heat pump.

15 What is not clear in the provision for the plans is how the Green Deal loan will work in conjunction with Feed inTariffs and the Renewable Heat Incentive. We believe they must come as a package, if Pay as You Save loans are not supported by income vehicles, such as FITs and the RHI, there will be no incentive to take the significant step into necessary technologies such as microgeneration. More clarification is needed on the financial aspects of the scheme.

Clause 3: Framework regulations

16 Regulating the scheme which enables people to act as green deal assessors, green deal providers and green deal installers and regulating their conduct is crucial to establish a trustworthy scheme.

17 Section 1 part b deals with regulating the green deal participants. It is crucial that this is robust to ensure that the time taken to train will be worthwhile. It is vital that the scheme has the full support of the installers and the training required is comprehensive.

18 Subsection (4) details what the code of practice may provide for, for example: the qualification and training of green deal participants; the handling of queries or complaints; insurance; charging; and marketing. All of these are important aspects of the Bill.

19 We are particularly interested in subsection 4, part a:

(a) as to the qualification and training of green deal participants;

20 We believe that there is significant potential to develop training and apprenticeship schemes that will build a highly skilled energy saving workforce, which will ensure the Green Deal is effective.

21 Currently in the UK we have a skilled workforce of 120,000 Gas Safe registered heating engineers and 30,000 electrical engineers (ECA members). We suggest that DECC develops a recognised Energy Efficiency Technician Certification Scheme that is equivalent to the Microgeneration Certification Scheme. If this qualification were to also qualify the participants as Green Deal Assessors, then so much the better. Developing the scheme built upon existing competencies would accelerate the development of the skilled energy saving workforce necessary to achieve carbon reduction commitments. By developing in parallel an apprenticeship programme that contributes to an energy saving technician qualification we can provide opportunities for young people looking to participate in the Green Economy. However, this will only happen if there is greater co-ordination and co-operation between Government, awarding bodies such as BPEC and Logic and the renewable product manufacturers.

22 Through our Sustainable Building Center, and working with Sevenoaks Energy Academy, Via BPEC, NICEIC or LOGIC Certification we can offer a range of discounted renewable energy courses. This training combines knowledge and practical experience to good effect, resulting in a nationally recognised qualification with BPEC, LOGIC and NICEIC. It can also be flexible to allow installers to maintain a normal service to customers whilst providing them with a tailored training solution. The renewables courses cover a broad spectrum of subjects from installing solar and heat pumps to unvented hot water storage systems and legionella prevention. Attendees can visit a seminar which explains what the Microgeneration Certification Scheme is and the role it plays in securing funding from Feed-in Tariffs.

23 Part G of subsection 4 addresses marketing in connection with green deal plans. We recognise that the success of the Green Deal is linked to customer awareness and take up of the scheme. From the installer perspective there is concern over the lack of education amongst the general public regarding renewable energy and technologies.

24 It is essential that home owners are convinced that the green technologies will provide an economic solution. This will certainly be a challenge in terms of cultural acceptability, increasing production capability and training an appropriate number of installers. A large barrier to this is generating interest amongst consumers.

25 We believe that educating installers and, indeed, the general public on eco-friendly products - what is available, how they are installed and the efficiencies which they will bring - is vital to ensuring a green future for the UK. We are actively working on a strategy that will help traditional plumbing and heating installers’ transition into the renewable/sustainable construction sector.

Clause 4: Assessment of the property etc

26 This clause sets out the conditions that must be met in order for a green deal plan to be taken out at a property. We believe that this process should be as simple as possible, and although the seven conditions outlined in the clause are important, how they are implemented will affect the success of the Green Deal.

27 The process must be short and require the minimum amount of additional investment. Schemes have, and will, fail because they are too complicated, lengthy and remote from the customer. If the process is too long and complicated it will compromise consumer take-up, and applicants may simply give up during the process.

28 We are concerned that the process becomes too expensive since each Green Deal participant will be looking to generate revenue and a new profession; ‘the accredited assessor’ will add yet another cost.

Clause 7: Installation of improvements

29 As with all appliances, the quality of the installation will also be key to the performance of the plant. Incentives should be put in place to ensure that any advice is for the technology that is the most appropriate for the particular household, not simply just the technology that provides the best return. The installer would be key to this process.

30 As we deal with installers on a daily basis we know the authorisation of a green deal installer is particularly key, as set out in subsection 2:

The first condition is that the person carrying out the installation of the improvements is authorised by virtue of the framework regulations to act as a green deal installer.

31 As previously set out under clause 3 we feel that the existing network of gas installers (and in many cases electricians) have sufficient skills and knowledge to be deployed as renewable installers. The traditional heating system in the majority of UK households is a combi-boiler running a ‘wet’ system through radiators. There are over 100,000 ‘Gas Safe’ installers who are capable of fitting and maintaining this system. Their transition to deal with renewable technologies is a sensible next step.

Clause 34: Funding for energy efficiency advice

32 Sufficient advice and information on the Green Deal to the public is key to ensuring high take up of the initiative. Both subsection 1 and 2 are important – but we particularly want to stress the importance of subsection 2:

In this section "qualifying advice or information" means advice or information about green deal plans or energy efficiency generally which is given to individuals or organisations.

33 Access to information is key as currently there is little real interest in this area amongst customers; many perceive renewable technologies to be too expensive. The most accessible way is now online through an identifiable source that is easy to access. As consumers are already sceptical about the industry the information needs to be in a format that is easy to read and understand and which makes a clear link between energy costs and savings that can be made. Giving funding to a body such as the Energy Saving Trust, would allow the Government to do this.

34 There is a role for businesses such as ours, with a wide distribution network, in making sure that our installers have access to this information throughout our branches, and feel involved in the move to renewables. Plumb Center has worked hard to disseminate relevant information by producing the renewable guide, which has been praised by installers, and which can be found here.

35 However, there are other means of disseminating advice and information on the Green Deal. The trigger point for work will, in many cases, be prompted by the failure or replacement of existing products. There are over 5,000 boiler installations a day throughout the UK, provided by installers both large and small. Every one of these jobs provides a potential opportunity for the wider application of energy efficiency measures. However, these key influencers must have buy-in to schemes which many feel to be exclusive to big companies or organisations.

36 It is equally true that many people have a trusted local tradesman whose advice will be crucial in making (or breaking) schemes and products. Through our research, we have found that these installers feel that the move to renewable is being led by a small elite group.

37 We are happy to work with Government to endorse an industry led campaign that highlights to homeowners what energy efficiency options they have from simple initiatives through to microgeneration.

June 2011

Prepared 9th June 2011