Things to come - Gerry Miller, CIGA / SWIGA
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Things to come - Gerry Miller, CIGA / SWIGA

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Things to come - Gerry Miller, CIGA / SWIGA. Big Green Deal event, 16th September 2011 Aylesbury

Things to come - Gerry Miller, CIGA / SWIGA. Big Green Deal event, 16th September 2011 Aylesbury

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  • Measure numbers fall, but lower number of higher value installations
  • Could create a market worth over 2bn by 2020
  • Could create an additional 10,000 Jobs
  • Maintained CO2 savings
  • Industry doing our bit

Things to come - Gerry Miller, CIGA / SWIGA Things to come - Gerry Miller, CIGA / SWIGA Presentation Transcript

  • Gerry Miller
    Things to Come
  • Where are We Starting From?
    • Existing framework based on CERT/Warm Front/CESP has delivered successive step changes in insulation activity - but market dominated by subsidized offers
  • Remaining Potential
  • What needs to be done?
    • Potential for Easy Cavity Wall and Loft Insulation installations remains but is finite
    • Focus over coming years will shift to harder to treat properties including 6.6m with Solid Walls.
    • Involve inherently more complex, diverse, disruptive and costly treatments
    • CC Targets imply that that 2.3m Solid Walls will need to be treated by 2022 - a 10 fold increase
    • Requires considerable industry Investment in developing solutions, training and scaling capacity
  • Where will it come from?
  • Green Deal Ambition
    Government see Green Deal as a “Game Changer” that will transform the UK’s housing stock
    14 million homes to be assisted by 2020
    Support 100,000 Jobs by 2015 and 250,000 when activity reaches peak
    Integrated with an Energy Company Obligation focused on the dual objectives of Fuel Poverty and Carbon savings.
    Delivered by strong National brands and Local knowledge and innovation
  • Things to Come
  • What Could Success Look Like?
    • A successful transition to a combined ECO/GD could deliver real benefits
    • Increasing levels of insulation activity
    • Deeper inroads into Alleviation of Fuel Poverty
    • Neighbourhood and Housing stock improvements
    • Development of thriving local businesses
    • Creation of local Employment
    • Delivery of Carbon savings
    • Product Innovation
  • Measures Installed
  • Value of market
  • Employment
  • Lifetime CO2 Savings
  • The Cost of Getting it Wrong
    Getting it wrong could result in
    a meltdown in current CWI and LI activity and loss of Jobs
    Failure to develop the necessary investment in expanding Solid Wall capacity
    Increase in Fuel Poverty over BAU and reduced consumer non fuel spending
    Failure of Building sector to achieve CC goals.
  • strengths
    Creates a socially equitable model to drive higher cost energy efficiency improvements.
    Embodies a holistic ‘whole house’ approach to treating buildings
    Provides a real opportunity to improve the building stock and local neighbourhoods.
    Offers help to those in Fuel Poverty
    Delivers Carbon savings to meet CC targets
    Carries Government endorsement
    ECO element will provide some certainty over expected installation rates
  • weaknesses
    Over half of potential activity likely to be in ATP sector addressed by GD rather than ECO
    Market basis means no formal GD targets to give investment signals or track performance
    No planned transition - Construction is like a super-tanker – it takes time to turn and switch capacity into Solid Wall insulation
    Does not address risk of activity being stifled by building control and planning issues
    Lack of clarity over ECO GD interaction mechanism
    ECO represents a significant increase in cost to consumers, possibly £1.8bn pa or 10% of bills
  • opportunities
    Could create significant opportunities for local businesses
    Could allow development of a Sustainable free market for Insulation
    Could catalyse creation of innovative delivery partnerships and mechanisms
    Market basis could drive innovation and allow differentiation of Products and Services
  • Threats
    Lack of demand certainty under free market GD
    Uncertainty over which particular Measures will be promoted in GD packages
    Exclusion of ‘Able to Pay’ CWI and LI from ECO will damage industry, reduce carbon savings and push up costs suppliers pass to consumers
    Entry of new players not experienced in building fabric measures could result in poor quality workmanship, seriously damaging consumer confidence
    Golden Rule could drive cost & performance down, rather than encourage innovation
  • Threats
    Slow uptake from consumers conditioned to subsidised insulation offers
    Risk of transaction costs making effective, low cost, measures such as CWI unattractive to providers and consumers.
    Risk of loan rates leaving no benefit for consumers
    Fears of default fears concentrating activity in low risk areas
    Risk of dominance by major players or Financial Institutions sucking value out of supply chain
    Risk of Energy Companies using ECO funds to control access to GD packages
  • Key factors for success?
    • Clear ‘targets’ and effective design and integration of ECO/GD to maintain current activity in the transition and drive investment in Solid Wall training & capacity.
    • Wide access to ECO funds to allow engagement of all delivery channels and range of local businesses
    • Building Consumer confidence and demand:
    • Communications programme
    • Robust Quality Assurance frameworks from day 1
    • Range of competing propositions
    • Involvement of trusted local partners
  • What Is Industry Doing?
    NIA Engagement with Government regarding development of key policies
    Research to validate remaining insulation potential and determine sustainable timelines and trajectories for main measures
    Work to develop solutions to non standards cavities
    NIA and CIGA Creation of Solid Wall Insulation Guarantee Agency and framework to Guarantees SW work meeting technical requirements.
    Builds on Proven Cavity model which saw CWI activity safely increase 5 fold
  • SWIGA Framework
  • SWIGA Summary
    • Comprehensive; covers all suitable property types and Internal, External or Hybrid Systems
    • Provides assurance that work will be carried out correctly, as Framework aims not just to sort out problems - but prevent them
    • Multi tier checks backed by independent surveillance
    • Helps ensure consistent In Situ performance to support Golden Rule
    • Simple, Guarantee covers defects in materials and workmanship and not restricted to installer insolvency
    • Integration with CP scheme to ensure B Regs compliance
  • The Role of Local Auth
    Perceived as Trusted partners – loft programmes of 1980’s
    Scope to develop innovative propositions, integrate Fiscal incentives based on Council Tax etc.
    Simplification of Building Control and Planning constraints.
    Detailed knowledge of local building stock
    Existing Relationships and networks with local contractors
    Synergies with HECA commitments
    Potential access to low cost finance
  • Conclusions
    Green Deal offers the potential to deliver major benefits
    Must be designed correctly and accessible to range of providers
    Local Authorities have a natural role to play and CIC construct provides
    Critical mass to allow effective competition with major Brands.
    Sharing of best practice
    Scope for joint Communications
    Additional route to market for Contractors