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CEO ECO Update 5 November 2016

Welcome to another bumper edition of ECO update! In this edition….

  • Storage Heaters – what are the rules?
  • Deemed score look-up web page
  • Heat Project lives again
  • Ofgem Consultation Meeting
  • Bit of gossip

Storage Heaters – what are the rules?

Storage heaters are a complicated pile of bricks when it comes to ECO. This measure has come to the fore of late due to the push towards non gas HHCRO measures. It sounds simple, find a house with storage heaters or no heating at all and chuck a few heaters in. But this then throws up the following questions:

  • What are the differences between the 3 storage heater types that are shown on the ECO scoring tools?
  • Is the storage heater you are planning to buy eligible?
  • Do you need to replace all of the storage heaters to claim 100% of the job?
  • Can you still claim 100% of the job if the home only has 1 storage heater to replace?
  • If the home has no storage heaters how many do you need to install?
  • Is the wiring up to installing storage heaters? (worth checking with the DNO)

Dimplex quantumPage 84 of the Stroma RdSAP manual has a good description of the types of storage heater that you can install It is worth noting that a high heat retention storage heater must be in the PCDB database and to the best of my knowledge is currently only made by Dimplex and re-badged as Heat Store. You can buy cheaper heaters such as those with a direct acting on-peak heater, but the ECO scores seem to reduce proportionally so the extra cost of the high heat retention model is generally worth paying. All of these new storage heaters will require a secondary on peak electric feed which will need to be factored into any costs, as will removing the old heaters which is not a task to be underestimated in terms of time, weight and disposal costs. Care also needs to be taken to ensure the old heaters do not contain asbestos.

In answer to some of the other questions above, my understanding is that if the home has storage heaters you have to replace them all to claim 100%. So a home that has 8 storage heaters is likely to be less appealing than a home which only has 4 to replace. If a home has no storage or only one or two then this is a much greyer area. In my opinion a house should be left with enough heaters to adequately generate enough kWh to meet the EPC heating demand. The RdSAP manual does refer to storage heaters providing ‘drift heat’ but I think it is stretching a point to assume that one heater can drift enough heat to warm up an entire 3 bed semi? Until guidance is provided those less than scrupulous installers will game the system and do as little as possible to get as much funding as possible.

For our own part, we would expect as a minimum for the lounge to have the new storage heaters properly sized to the manufacturers heat loss requirements to achieve a 21 degree temperature. You would then expect a large heater in the downstairs hallway and a smaller heater in all bedrooms that are used. Any less than this and you would struggle to define the storage heaters as being the primary heating system and it could lead to a scenario where the home should really be shown as having 2 primary systems (I am sure some SAP person will shoot me down for saying that!) and the ECO score reduced. The goal of installing these heaters is to provide affordable heating, so simply putting a couple of storage heaters in and then filling all other rooms with on-peak heaters is I believe ethically wrong and I believe fails the 100% installed test. That said, is it better for the customer to get 2 storage heaters for free rather than nothing?

In my opinion storage heater guidance needs to be produced fairly quickly to avoid a room in roof scenario 6 months down the line. We all have our own understanding but it would be good if we were all working on the same page so I will raise this at the next ECO working group.

Deemed score look-up web page

Ever keen to make ECO simpler, we have produced a deemed score look up facility on our website for all to use. It doesn’t contain every measure but it does have most loft, cavity and RIR insulation, plus boilers and storage heaters. You can select from a drop down list which deemed score you want to view and if you enter in your current CERO and HHCRO ECO funding rate it will calculate the funding that could be achieved.

Please report any errors that you find and note that we take no liability whatsoever for any results that it provides!

Heat Project

Heat ProjectHappy Energy has re-launched the Home Energy Action Taskforce or Heat Project. The Heat Project offers local authorities a completely free energy saving one-stop-shop for their private owner occupier and private rented sector residents, with proactive marketing campaigns funded by Happy Energy. The new enhanced Heat Project provides a wide range of energy saving upgrades for both the fuel poor and able to pay householders including insulation, heating measures and renewable energy measures, installed by local contractors. In return for allowing us to use their logo on our marketing, we offer the local authorities a completely free range of service for their local residents including a Freephone energy advice line, independent energy switching service and assistance in targeting and helping the fuel poor and private tenants.

The Heat Project will be an ideal referral and management mechanism for the flexible eligibility option that is expected to be approved from April next year. If you are a local authority wishing to join the Heat Project or if you are an installer who has links with a local authority and would like to bring the Heat Project to your area to boost marketing and leads please contact us through the website

Ofgem Consultation Meeting

Ofgem currently have a consultation out relating to the administration of the new ECO extension. On Thursday I attended a meeting in Cardiff at which they clarified a number of points as below:

  • It is hoped that BEIS will release their response to the Help to Heat consultation in mid-December. I have however also heard rumours that it will be released the last day before Christmas and even possibly in January so who knows?!
  • Ofgem intend to respond to this current consultation by 9th January and will then issue the second part of their consultation on the 16th January with a closing date of 13th February
  • Final guidance will be issued by Ofgem on the 11th April (ready for a 1st April start )

5% automatic extension

Rules around the automatic 5% supplier submission extension were then explained in a slightly clear as mud fashion. After some probing it was clarified that the 5% extension applies to measures submitted in a month rather than the extension being no more than 5% of the submissions in that current month. Blimey now I know how hard it was for Ofgem to explain! Ok so here is an example:

  • In April the supplier submits 1000 jobs with a March handover
    The supplier can now submit up to 50 jobs in total with a March handover during the months of May, June and July – regardless of how many other measures are being submitted in those months

Hopefully that makes sense? Ofgem also made it clear that suppliers should continue to provide the message to the supply chain that it is “business as usual” when it comes to submitting jobs and the supply chain should not automatically assume that the suppliers will allow late submissions except in exceptional circumstances.

Social housing HHCRO

Ofgem clarified the rules around the addition of social housing properties into the Help to Heat category if they are E, F or G rated. Measures that will be allowed will be insulation, First Time Heating, renewable heating and district heating. First Time Heating caused a bit of a kerfuffle because homes that have, or show signs of ever having had storage heaters will be excluded from this group. So even if you have 1 storage heater or can see old feeds for storage heaters, the home will not be eligible.

It was discussed that social housing providers can use EPCs up to 10 years old and then sign a declaration to confirm that no works have been completed which would have affected the rating. Some concern was raised about the validity of older EPCs and Ofgem confirmed they were looking at the option of possibly making the requirement shorter, perhaps 2 years old, but did not want this to add any cost burden.

In social housing the property is only eligible when the rating is E, F or G. each time a measure is installed the rating must be reviewed and if it has hit a D rating the property is no longer eligible for additional measures. This could clearly be complicated to administer and the only real way to check this is to have a new EPC completed and update it with the new measure to see what the new rating is. The EPC need not necessarily be lodged though and it may be possible to use the upgrade options in the old EPC to judge if a D would have been reached.

Flexible Eligibility

Flexible Eligibility is where a local authority will be able to sign a declaration to say that a customer is eligible for the Help to Heat funding irrespective of benefits due to being fuel poor or on a low income and susceptible to cold related illness. The declaration can contain multiple referrals but each declaration will need a unique reference number (URN) to allow Ofgem to track down the declaration specific to a job. A question was asked around risks for suppliers if the declarations were deemed to be invalid and Ofgem confirmed categorically that even if a declaration was found to have been completed by a local authority incorrectly or erroneously, then the work will not be subject to revocation. The local authority may however be reported to BEIS and could lose its ability to sign off future declarations.

BEIS will be producing a guide about flexible eligibility to ensure that the rules around this area are clear. Ofgem will also be producing their own Help to Heat guidance but this may not be ready until April.

Evidencing non gas fuelled premises and loft depths

Ofgem wish to gain some confidence that when deemed scores come in, the supply chain is correctly recording the fuel types for properties and the existing loft depths so as to avoid any gaming to artificially inflate scores. In particular non gas fuelled premises receive a much higher score than a gas property, in this case Ofgem are just asking to see a copy of the PAS technical survey with the heating type noted down. For pre-existing insulation, Ofgem are proposing a requirement for 3% of lofts to be technically monitored before installation. This in my opinion is a backward step and a number of people in the room agreed that a technical inspector could just as easily verify the pre-existing insulation depth post installation which would avoid the hassle and cost of trying to coordinate pre-installation inspections.

Party wall insulation

This was an interesting topic. During the presentation, Ofgem stated that if you install party wall insulation in a property you could only claim for the works in one of the adjoining homes. Playing devil’s advocate, I asked why it was not acceptable to claim for both homes given that you were improving the thermal efficiency of both. So if you had a row of 4 homes in a terrace, 2 end and 2 mid terraces, you could insulate the party walls of the 2 mid terrace properties which would have the effect of also upgrading the party walls of the 2 end terraced properties, so why can’t you claim for all 4? It seems Ofgem don’t think that this approach is cricket and will only allow you to claim in the one house that you work in, I knew that would be the answer but you have to ask don’t you?

So now with the clarification about how many homes you can claim the party wall insulation for the next question to Ofgem was how is this going to be policed? How can Ofgem know if a party wall claim comes in for 1 Acacia Avenue from one supplier and the adjoining 2 Acacia avenue from another supplier, that in fact only one home was insulated? Ofgem acknowledge the conundrum so feel free to send in some suggestions if you are planning to submit a response to their consultation.

To see the full Ofgem consultation or to find out how to respond, please go here

Bit of gossip

We all like a bit of gossip, it rarely turns out to be true but at least it takes our minds off our tiny margins. Rumour has it that some people in the supply chain and some suppliers have been lobbying for an 18 month extension rather than a 12 month extension. This would be much better as to move across to a completely new system such as deemed scores with a bigger fuel poor target is quite a lot to contend with in 1 year.

Also on the ECO jungle drums, BEIS may be looking at a way to ‘levelise’ scores between ECO 2 and the extension year to prevent too much work being completed before March at what would be seen to be higher scores and lower prices than could be achieved from April onwards. Hopefully in practice this does not mean any eroding of the volumes of works but what it could mean is that the deemed scores from April will be uplifted but the target proportionally increased. The alternative is that any ‘go early’ delivery banked before the end of March on the current scoring basis will be deflated. If true, the hope is that any announcement will not lead to a cessation or slowdown of work over the winter.

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