Green Deal SME Opportunities


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Green Deal SME Opportunities

  1. 1. 11/07/2012 Main features of Green DealTHE GREEN DEAL Possible responses from the(including June DECC updates) ‘market’Accessing the opportunities Delivery Options and structures.Bill Taylor Collaborative DeliveryTaylor Armitt Consulting Health warning– the GD is complex – any presentation will necessarily e: leave lots of the detail out. Only the main points are covered here, with the t: 07876 241943 emphasis on residential issues rather than commercial. Green Deal – the carbon challenge Main features of the Residential and Services 100m t Co2 to c0 Green Deal Source: Committee on Climate Change, 2011 1
  2. 2. 11/07/2012 Green Deal – the fuel price challenge Green Deal – Main features Fuel price indices in the domestic sector in real terms Q4 2003 to Q4 2011 200 Petrol and oil •Means of encouraging retrofit without ‘’up-front’ public funding 180 Coal and smokeless fuels Heating oils •Theoretically cross-tenure appeal – but practically? 160 Gas •Energy savings balance cost of investment over time – Electricity 140 ‘Golden Rule’ 120 •Savings SHOULD increase as energy prices rise over timeIndex 2005=100 •Supported by ECO grant for hard to treat or fuel poor 100 •Plurality of delivery intended – inc ECO via brokerage/market 80 So – TWO good reasons why we need to •‘Impartial’ Advice and Occupancy Assessment 60 do something – emissions reduction •Accreditation and certification of Providers, Assessors and 40 targets and steady rise in fuel prices. Installers 20 •Collection of ‘repayments’ via energy bills – low default 0 •Capital to be provided by market and GDFC (from GIB) •Repayments can be stepped for measures of differing ‘lives’ Q4 2003 Q2 2004 Q4 2004 Q2 2005 Q4 2005 Q2 2006 Q4 2006 Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 •Repayments HAVE to be fixed interest rate but could be ‘low start’ Basic Green Deal model Green Deal – The Golden Rule GD Advisor Green Deal customer GD Installer(s) £ Marketing GD Provider Energy Co collects charge and GDFC/Bank Borrowing pays GDP or Energy Costs After Works – GDFC/bank Before Works energy cost plus Green Deal repayment 2
  3. 3. 11/07/2012Green Deal – Funding Structure Green Deal – Issues • Accreditation and quality control •Consents & dealing with flatted blocks •Development of true ‘market’ •Warranties Energy Green Deal Mix of Company •Access to ECO Finance – Green Deal Obligation •Non domestic stock measures and ECO if Finance – •Cost of funding via GDFC meet Golden property or hard to treat Rule household or fuel •Availability of funding from qualifies poverty other sources •State Aid - GDFC/LA money •Attitude of CML, conveyancers •The Golden Rule and occupancy assessment •Ventilation where air tightness improved • TIMESCALES – ‘Soft Launch’ - Plans not before end Jan, payments end MarchGreen Deal – Key Guidance PAS 2030:2012; PAS 2031:2012 • PUBLICLY AVAILABLE SPECIFICATION •BSI documents, sponsored by DECC •PAS 2030: Specifies requirements for installations •C160 pages inc 27 annexes •General reqs – eg Method Free Statements, conformity. •1 annex per measure Free – new •Plus 1 on info collation £95 version due •Needs good info systems soon Free – see 2 July version – still draft •PAS 2031 – applies to Certification bodies providing conformity evaluation reSee website refs at end of PAS2030, inc audit requirementspresentation 3
  4. 4. 11/07/2012 Who can predict the future? Probably only Walt Disney........Possible responsesfrom the ‘market’Green Deal – is there a market?•Market research by DECC•Some owners occupiers interested but reluctant to pay forassessment up front and concerned re impartiality of adviceand ‘Golden Rule’ working•Private landlords – ‘better’ ones may be interested butproblem of disrepair for many in lower market. Green Deal –•RSL pilots indicate some interest but lot of support needed onthe ‘journey’ (ref Affinity Sutton, Gentoo websites). Also much Delivery Options andof ‘basic’ work done so Golden Rule issues if not HTT.•DECC research into terminology – ‘new sort of loan – to Structuresproperty, not person’ and ‘golden rule’.•Revised EPCs and Occupancy Assessments for clarity.•What is appetite from supply chain?•Will CML and conveyancers be positive or not? 4
  5. 5. 11/07/2012 ‘Able to Pay’ model Part ‘Able to Pay’ modelGreen Deal – FinancePROS•Proposed that GD Finance is ‘off balance sheet’ – good•GDFC will lend – but on what terms and to whom? GD Advisor Green Deal•Collection by electricity supplier via meter is very low risk – customer GD Installer(s)much lower than service charges etc•Apart from notification, no admin at occupancy change. MarketingCONS•Admin requirements to become GD Provider and so GDqualify for finance collection method. CCA accreditation? Provider•GDFC interest rate – c7%? State Aid Issues?•Is return too long term for some likely players? Energy Co•Requirement to offer long term guarantees Bank Borrowing collects charge andon work and warranties. pays GDPGreen Deal – Options – Local leadership? • GD is essentially a ‘single property’ delivery model •BUT challenge means we need to deliver at scale •Aiming for ‘plural’ market and range of GD Provider types Collaborative •LAs can choose ‘one or more’ GDP partners •System IMPLIES minimum 3 providers per area Delivery •MUST get fair access to ECO via brokerage •SOME technologies will need area/street/cluster approach 5
  6. 6. 11/07/2012Working Together – WHY and HOW•Doing it all requires broad range of skills• Investment needed and risk element of obtaining all Summaryaccreditations•Work in the 2 or 3 areas you are good at•Join with others who have complementary skills•Try to build a Consortium with all the skills needed•Formal JV or informal alliance?•Or talk to larger regionals about sub-contracting•Try to make sure they ‘Walk the Walk’ re supply chain•Travis Perkins or Parity Projects models?•Ask current clients what they want•Ask your LAs what they are doing•Keep coming to the Best Practice Club so you are up to date!Green Deal – the challenge Green Deal•‘Do nothing’ is not an option – it’s going to happen Summary•Consultation has answered some questions but left others • Model is complex but has promise•Needs more focus on customer engagement and behaviour • BUT given that we can’t afford to offer grants for this work, and it has to•Some good attempts to discourage worst practices be done, its possibly the best solution possible for the whole market•Approach of CML and solicitors/valuers will be critical•Cost/complexity of accreditation likely to deter smaller firms • Lots of detail still to be delivered and weaknesses to be resolvedfrom being ‘early starters’ until market develops. • Faith of market given delays and lack of detail.•£200m ‘go early’ incentive – use to be decided. • Potential GD providers and installers need to understand•Route chosen will depend on position in market andappetite/capacity for risk – long and short term. requirements, risks and potential rewards.•Opportunity to generate / protect turnover • SMEs need to find way of collaborating•Delivering local training and jobs – eg via frameworks. • In absence of major Gvt marketing, action by LAs with local partners critical for success 6
  7. 7. 11/07/2012 Green Deal SummaryCONTACTS•DECC•AGMA Thank you- 07876 241943 Any questions?British Standards•Construction Products All Slides © Taylor Armitt Consulting 2012•Taylor Armitt 7