Green Deal: the debate continues

Following our notes on the "demise" of Green Deal, and Nicole Barrett's great response, we asked Linn Rafferty for her views. Linn established the Green Deal Advisor Association in 2012 as a route for independent advisors to participate in the market. She's also a Partner in JTec Energy and Automation Services. More than that, she's an absolute expert in energy advice and assessment, and the person that we turn to when we have awkward questions to ask....

SE2: So, is this the end for Green Deal Assessments?

No, it isn’t.  In fact, it’s not the entire Green Deal scheme that has been closed, only two aspects of it - the Green Deal Home Improvement fund, and the subsidy paid by Government to the Green Deal Finance Company (GDFC).

GDFC was not the only finance provider, and it's possible that some Green Deal Providers will still be able to offer loans through their other sources. Other aspects of the scheme - the registers of assessors and installers, for instance - are still available.

If anyone is considering applying for the Renewable Heat Incentive, for instance, it's important to know that the necessary Green Deal assessment can still be carried out (the Green Deal report number has to be put on the RHI application). There are also other schemes that rely on the Green Deal assessment, including some fairly generous schemes in Scotland.  You can find an assessor using the government's search facility, or if you are looking for a local person to provide this service, contact the Green Deal Advisor Association (GDAA).

SE2: What aspects of the Green Deal Assessment would Government be wise to retain in future policy development?

I think it’s very important to keep the qualification and certification aspects. The Green Deal scheme was the first time that energy advisors in the UK were given the status of qualified, regulated professionals.  Prior to Green Deal, anyone could call themselves an energy advisor, and sometimes this title meant nothing more than a salesman for an energy company.

Having run the GDAA since the inception of Green Deal, I’ve found the need to comply with the standards a bit of a mixed blessing (more on this below). However, I would certainly support the view that standards and regulation are absolutely needed for energy advisors, and the Green Deal certification process is excellent.

It includes requirements for all active energy advisors to have a desk audit at least quarterly, plus a sample of advisors actually have their work tested by an auditor witnessing them at work, delivering a green deal assessment to their customer.  This level of auditing is more onerous than that applying to Domestic Energy Assessors, who provide EPCs, and I think this is wholly appropriate. In fact, I would like to see similar, rigorous auditing of DEAs.

SE2: What aspects of the Green Deal Assessment might you be glad to say goodbye to?

All of the pointless form filling created by the need to comply with the Green Deal Assessor Specification!

This Specification has underpinned the Green Deal paperwork since day one, and although it has been updated a couple of times and slightly improved, it is still totally over-the-top and ludicrously tick-box heavy.  It requires Advisors (or their GDAO – Green Deal Assessor Organisation) to provide the customer with a long list of information, most of it irrelevant to them, and equally, to ask the customer a list of questions, only a few of which are really required.

In reality, even where the customer was considering taking up Green Deal finance, most of this mandatory information was not really needed, and I don’t think any GDAO or Advisor would be sorry to see it go.

SE2: Do you think consumers will see value in an occupancy assessment and pay extra for it (above the cost of their EPC)?

Some do, and will. If delivered well, and if it could be freed from the pointless and time-consuming aspects that I mentioned above, this assessment is much more relevant to a consumer than the EPC.

When you think about it, this isn’t surprising.  An EPC has to be created at the point of sale or let. This is the point when the current occupier is moving out, and isn’t at all interested in improving the home they are leaving.  The EPC therefore has three particular difficulties as an advice tool for the new occupier, all of which are overcome by the occupancy assessment.

Firstly, it has been created without any contact with the new occupier, so it hasn’t taken account of their needs or personal preferences.  Similarly, there has been no opportunity for the occupier to discuss anything with their assessor, or to receive personal energy advice.

Secondly, the EPC has a ‘shelf life’ of 10 years, so the EPC they’ve received could be very out of date.

Thirdly, the suggested improvements have been costed assuming that the occupier will use the home in a standard way.  This can either over-state or under-state the running costs that the actual occupier will see, depending on how they use their new home.  The OA is based on how the actual occupier uses the home.

Therefore the OA gives a report that is current and is also personal to the occupier, and offers the consumer the chance to receive good advice and have their questions answered.

A caveat – I did say ‘when delivered well’!  In fact, I consider that some Green Deal assessments may not have been delivered well.  At times, I’ve felt that a few Advisors only paid lip service to the need to deliver a full service to their customers, and treated the process as a tick-box exercise.  This could happen when the customer only wanted the assessment to apply for RHI, and was not really interested in the energy advice aspect.  Whilst I can understand an advisor being tempted to short cut the process when dealing with such a customer, I would like to see the advisor aim to deliver the full service, even to a customer who initially might not want it.

SE2: There are some 4000 Green Deal Advisors out there: what are they going to be doing now?

I don’t expect that all 4000 advisors will want to continue to work in Green Deal, but if they do, a number of them will be looking for a new Green Deal Advice Organisation (GDAO) to work through. 

Since the news that DECC have withdrawn their part of the funding for Green Deal Finance, GDAA has seen an increase in applications to join us. This may be partly due to advisors wanting to join a GDAO that actively represents them, but sadly, we think it is due to the closure of many GDAO's, leaving GDAs without anywhere to lodge their GDARs.  At the peak there were over 650 GDAOs listed on the GD-ORB website; a search today shows only 403 remain, and this is likely to reduce further as companies do not renew annual certificates.

Some advisors were also themselves registered as a GDAO, and I would expect they’ll conclude that operating their own GDAO is no longer viable.  Advisors who were enterprising enough to want to run their own GDAO, however, are not likely to want to work as an employee. They will be looking for a GDAO that will support them as an independent advisor.

Many of those advisors that continue to work as such will supplement their Green Deal work with other tasks.  All Green Deal advisors are also Domestic Energy Assessors, and they will continue delivering EPCs for a variety of clients.  EPCs and Green Deal assessments have been required for ECO, and whilst this continues they do have a reasonable supply of work.  Currently ECO’s end date is 2017, but with this Government, who knows?

SE2: A lot of energy assessors have been through this before – training or retraining only to see a market disappear from under their feet. How do we ensure that qualified assessors don’t just give up? And how do we attract new people to a profession that seems so vulnerable to shifts in policy?

This is a very insightful question!  Yes, this has been a problem for energy assessors, as it has been for the whole of the energy efficiency industry.  Time and again, industry observers have called on the Government to avoid ‘stop-go’ policy changes, yet here we are again.  It seems that the new administration is even worse in this respect than the previous coalition, which we all thought had set a new low in this respect.

It’s perplexing that, given what we know, there is no shortage of new people coming into the energy assessor/advisor profession.  Either the training providers must have very good salesmen, or it’s just that those taking the training don’t always do their homework before signing up.

So, new entrants may not be a problem, but this doesn’t address the issue you’ve raised about keeping those currently qualified assessors in the energy efficiency business. We want to retain them for their experience, surely?  

How about a programme of free energy assessments/advice for all low income families and those in fuel poverty, paid for by a levy on the big six energy companies?  Backed up by a fund to provide free low cost insulation measures, as a minimum, for all those that qualified for the assessment?  Perhaps that would be popular.  If it sounds a bit like Warm Front, that’s because it is, but this time using qualified energy advisors to deliver genuinely helpful energy advice, so that even those that don’t get the free insulation are given strategies to cope with living in their energy inefficient house.

SE2: Do you think there will be Advisors seeking redress for the money and time they have spent training up and getting certifications for a market that will likely no longer exist?

Did Home Inspectors seek redress for the money and time they spent on training to deliver Home Condition Reports?  No, they talked about it, but in general they accepted that it’s not possible to sue Government.  The more enterprising ones went on to successfully offer the Home Condition Survey (a rebranded Home Condition Report) to home buyers, rather than sellers.  I bought one myself, and it’s a cheap enough reassurance that the home you’re considering buying is in good condition. 

Another possibility would be for Advisors to seek redress from their training providers, but I cannot see that they would have a case for this.  Some time ago, there was a class action by a large group of trainee energy assessors that felt their trainer had misrepresented their prospects.  I believe this was successful, but it took a long time, and not all trainees received refunds.  A large part of that case was that the training provider had not delivered all the parts of the training that they had promised and this wouldn’t be the case here.

So, going back to the Home Inspector analogy, even though the original market (as a HCR within the HIP) no longer exists, there are still opportunities to use that training to earn a living.  So, I hope, with energy advice training.

SE2: Do you know how the certification bodies are feeling about this? Their revenue streams and business plans will be affected too.

Rather than put words in the certification bodies’ mouths, I’ve asked Martyn Reed, Elmhurst's Operations Director, to answer this one.

Despite being a member of the Green Deal Advisory Group, I was shocked by the announcement and disappointed that the decision had been made without industry consultation. I believe that Elmhurst has a responsibility to represent the views of members, and have written to GDORB and DECC expressing my concern, asking for an urgent statement of reassurance and to offer assistance.

With tens of thousands of pounds invested in the Green Deal Elmhurst has lost out with this announcement, but our size and diversity means that we are more than big enough to cope. However, our biggest concern is how it affects the Advisors and Assessors who were encouraged by Government into the industry. The urgent issue for Government is to appreciate that Green Deal did achieve some successes in that it:

• Built upon the proven RdSAP / EPC methodology which allows government to objectively and independently measure the financial and carbon savings achieved at a local, regional and national level.

• Developed a methodology for how an occupant’s behaviour can effect energy consumption. Again, this can objectively and independently measure the financial and carbon savings achieved at a local, regional and national level.
• Has delivered advice to over 500,000 householders, who now have more information and understanding about how they consume energy and ways in which they can reduce it. Data was never collected but, from circumstantial evidence, we know that a significant number of householders made the improvements based upon the recommendations of their Green Deal Advice Reports, without the need for a Green Deal Plan.
• Has recruited, trained and qualified a national force of independent energy advisors, able and willing to raise awareness, promote and measure energy efficiency improvements.

To ensure that these benefits are not lost Government needs to give reassurance that

• the ongoing role that Green Deal has in delivering RHI and ECO will remain;
• these benefits will be retained in all future energy saving initiatives.

Elmhurst will continue to represent Members’ views at every opportunity.

SE2: What aspects of wider Green Deal do you think will feature in future policy (eg, pay as you save models, industry certification)?

I am not convinced of the validity of Pay as you Save mechanisms.  One thing that Green Deal has shown (which should really have been obvious from the start) is that only the very low cost measures meet the Golden Rule, and save enough to cover their installation cost in full. 

Most measures that people want - double glazing being an obvious example - save so little money compared to their cost, that customers requesting a Green Deal assessment for this reason were bitterly disappointed.  DECC introduced the GDHIF to help fund this gap, but as has been widely reported, this stop-start funding didn’t really help anyone. 

When Green Deal was being devised, I remember being told that the intent was to find a way of encouraging the Fuel Rich – those that can afford to pay high energy bills, so they don’t have an incentive to improve their home’s energy efficiency – to spend money on installing measures, instead of paying it to the energy suppliers.  Well, to my mind that would be very desirable, but I don’t think Pay as you Save was quite the right message to achieve it.

On industry certification, I think this is important and as Martyn says, our new, national force of independent energy advisors must be part of future initiatives. 

Certification is also important for installers, but I don’t think the mechanism that was devised for Green Deal for installers has been as successful as that for the Advisors.  Perhaps this is because, for energy assessment and advice, it is the individual that must be qualified and accredited in their own right, as a separate entity from their company (the company is the GDAO, which is certificated separately).  For installers, it is only the company that is certificated.  There seems to be no consistency of approach between companies on, for instance, the qualifications of the work force, or quality of the workmanship.  This lack of focus on the individual worker may well be part of the problem.

I recognise that dealing with installer skills is a long standing problem that will require long term action to solve.  All the same, higher skills and active quality assurance of installations will be critical to the credibility of the UK’s energy efficiency industry.

SE2: What’s your message to Government about energy assessments?

The same as Martyn’s.   We have now recruited, trained and qualified a national force of independent energy advisors, able and willing to raise awareness, promote and measure energy efficiency improvements.  This workforce has delivered advice to over 500,000 householders, who now have more information and understanding about how they consume energy and ways in which they can reduce it.  That’s 500,000 people who are now more receptive to the idea of improving the energy efficiency of their homes under whatever new scheme is devised to replace Green Deal. 

Don’t forget, it was the assessment and advice aspect of Green Deal that scored highest with customers in the consumer surveys that DECC commissioned. This cohort of energy advisors must be recruited to continue the very good work they’ve done since 2013 when Green Deal began.  Don’t throw out the baby with the bathwater.

SE2: And what’s your message to householders?

Would you like to have lower energy bills?  Who wouldn’t?  Improving the energy efficiency of your home is the way to achieve this. 

Although in the short term you do have to pay to have these improvements done, they’ll start reducing your bills from day one.  Wouldn’t you rather put your hard earned money into your home than into your energy supplier’s profits?

Our thanks to Linn and to Martyn for their time in putting this blog post together. If you'd like to contribute to the debate, please email liz.warren@se-2.co.uk or tweet us @se2limited.