Post on 10-Jun-2015
description
Gerry Miller
Things to Come
The Solid Wall Insulation Guarantee Agency
WHERE ARE WE STARTING FROM?
o Existing framework based on CERT/Warm Front/CESP has delivered successive step changes in insulation activity - but market dominated by subsidized offers
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ann
ual I
nsta
llati
ons
CWI Retrofit Trends
E E C 2 C E R T ExtE E S o P E E C 1
Forecast
The Solid Wall Insulation Guarantee Agency
REMAINING POTENTIAL
Insulated, 10.8
Insulated, 13.2
Uninsulated, 7.9
Uninsulated, 10.1
7.9
3.3
0 5 10 15 20 25 30
Walls
Lofts
GB Housing Stock/Millions
Solid Wall
No Loft
The Solid Wall Insulation Guarantee Agency
WHAT NEEDS TO BE DONE?
o Potential for Easy Cavity Wall and Loft Insulation installations remains but is finite
o Focus over coming years will shift to harder to treat properties including 6.6m with Solid Walls.
o Involve inherently more complex, diverse, disruptive and costly treatments
o CC Targets imply that that 2.3m Solid Walls will need to be treated by 2022 - a 10 fold increase
o Requires considerable industry Investment in developing solutions, training and scaling capacity
The Solid Wall Insulation Guarantee Agency
WHERE WILL IT COME FROM?
EWI, 32%
IWI, 27%IWI major ren, 9%
LA EWI, 11%
LAEWI Flat, 11%
EWI major ren, 11%
Solid Wall Forecast Delivery Segmentation
DECC A Energy Bill High Case
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
WHAT COULD SUCCESS LOOK LIKE?
o A successful transition to a combined ECO/GD could deliver real benefitso Increasing levels of insulation activityo Deeper inroads into Alleviation of Fuel Povertyo Neighbourhood and Housing stock
improvementso Development of thriving local businesseso Creation of local Employment o Delivery of Carbon savingso Product Innovation
The Solid Wall Insulation Guarantee Agency
MEASURES INSTALLED
0
500,000
1,000,000
1,500,000
2,000,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Inst
alla
tion
s pa
Feasible Delivery Trajectory Installations pa
Loft
CWI
SW
The Solid Wall Insulation Guarantee Agency
VALUE OF MARKET
0
500
1,000
1,500
2,000
2,500
3,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Market Value £m
Loft
CWI
SW
The Solid Wall Insulation Guarantee Agency
EMPLOYMENT
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Employment
Loft
CWI
SW
The Solid Wall Insulation Guarantee Agency
LIFETIME CO2 SAVINGS
0
5
10
15
20
25
30
35
40
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Lifetime CO2 Savings
Loft
CWI
SW
The Solid Wall Insulation Guarantee Agency
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.
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
KEY FACTORS FOR SUCCESS?
o 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.
o Wide access to ECO funds to allow engagement of all delivery channels and range of local businesses
o Building Consumer confidence and demand:o Communications programmeo Robust Quality Assurance frameworks from day
1o Range of competing propositionso Involvement of trusted local partners
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
SWIGA FRAMEWORK
25 Year Guarant
ee
3rd Party Surveillan
ce
Registered
Installers
1st and 2nd Party
Industry surveillan
ce
Research
Installation &
Assessment
Guidance
Technical Investig-
ation
Training & Skills Cards
Certificated
Products/ Systems
The Solid Wall Insulation Guarantee Agency
SWIGA SUMMARY
o Comprehensive; covers all suitable property types and Internal, External or Hybrid Systems
o Provides assurance that work will be carried out correctly, as Framework aims not just to sort out problems - but prevent them
o Multi tier checks backed by independent surveillance
o Helps ensure consistent In Situ performance to support Golden Rule
o Simple, Guarantee covers defects in materials and workmanship and not restricted to installer insolvency
o Integration with CP scheme to ensure B Regs compliance
The Solid Wall Insulation Guarantee Agency
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
The Solid Wall Insulation Guarantee Agency
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