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NEA NIs response to the Department of Finance and Personnel

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					NEA NI’s response to the Department of Finance and Personnel
Review of Domestic Rating Green Rebates Public Consultation

Introduction

NEA NI, the charity campaigning for warm homes, welcomes the
opportunity to respond to “the Review of Domestic Rating Green Rebates
Public Consultation”. We commend the DFP on publishing the consultation
at a time when improvements to domestic energy efficiency, and
incentives to take action on these can help households minimise the
impact of all time high energy costs and lead to sustainable development.

The consultation

NEA’s response broadly follows the specific issues for consideration
outlined on page 8 of the paper.

Proposal to provide a rates rebate for households that carry out
energy efficient improvements to their properties.

NEA NI welcomes the proposal to encourage householders through the
incentive of a rate rebate, to install energy efficient measures.

NEA NI notes in “Section 1: The Introduction” the point that the measures
proposed are aimed at supporting the Executive’s commitment to promote
sustainable development and that they are a response to a ‘global
issue’. NEA NI strongly agrees and reinforces the point also made that
since 2007 soaring energy costs have underlined the need to take early
action, particularly in developing new policies for Northern Ireland; and
that while providing benefits by way of the local taxation system is one
way to influence lifestyles and help to contribute to energy conservation
leading to sustainable development it can also be used to encourage
households to install measures that will help them to achieve affordable
warmth. In the current crisis of rocketing fuel prices brought about by
global factors, there is a an immediate need for many households for
relief through sustainable development.

NEA NI sees the opportunity here for policies to be joined up so that both
objectives - sustainable development and affordable warmth can be met.
This is not to conflict with the consultation paper’s point that the
measures are not being provided as another affordability relief nor to
directly tackle fuel poverty. NEA NI’s agenda is to campaign for and
support policies that directly tackle fuel poverty, for example through the
existing NI Fuel Poverty Strategy and other initiatives.

Para 27

NEA NI notes the point made in paragraph 27 of the consultation paper
that households who may be in fuel poverty and because they are just
beyond entitlement to benefits they are not eligible for the Warm Homes
Scheme. NEA NI supports the point that the proposed energy efficient
homes scheme would help these households, the 2006 House Condition
Survey shows that while the average SAP in Northern Ireland is 53 for
‘working fuel poor households’ the SAP is 40 and a staggering 1 in 5
‘working fuel poor’ live in homes with a SAP of between 1-20. NEA NI
does not however, see the proposal as the only solution to tackling this
challenge but other initiatives will also be required to meet this need.

It is worth referring here to the definition of fuel poverty - ‘the situation in
which a household would have to spend more than 10% of income on fuel
to maintain an acceptable level of temperature throughout the house’

and it is accepted that fuel poverty is caused primarily by three factors:

     -   high cost of fuel
     -   low income
     -   energy inefficient dwelling

NEA NI therefore supports any initiative that endeavours to make homes
more energy efficient.

Regarding the point also raised in paragraph 27 that many households
that may be in fuel poverty are not receiving the grants that are available
under the Warm Homes scheme because they are not claiming the
benefits to which they are entitled and which would passport them into
the scheme. Rather than use or promote the proposed energy efficient
homes scheme to help these households, NEA NI believes that every
effort should be made to help people check their benefits entitlement and
then to claim this. This would help to increase the household income,
thus reducing the problem of one of the factors that cause fuel poverty,
i.e. low income and could provide a passport into the Warm Homes
Scheme that would help tackle another dimension of fuel poverty –
energy inefficiency of the property. While there may be some help here,
NEA NI does not see the proposed Green Rebate as a scheme to
help these households, we would advocate benefit entitlement checks
leading to entitlements being claimed.

Energy Efficiency Improvements

Energy efficiency improvements to the property can be considered in four
categories: fabric heat loss, unwanted ventilation heat loss, space and
domestic hot water heating.

For fabric heat loss where the consultation paper refers to ‘such as loft
and cavity wall insulation’ (CWI), NEA NI believes that there is scope for
this to be extended, to solid (non cavity) wall insulation, and possibly also
to double glazing. NEA NI appreciate that while the payback on these
measures is long, due to high capital cost, this should not be an inhibitor
to making existing homes more energy efficient which would lead to more
affordable warmth and reduced carbon emmisions.

NEA NI believe that space heating and domestic hot water heating
should also be included to improve energy efficiency, for example, the
replacement of inefficient boilers and upgrades to heating controls i.e.
room thermostats, TRV’s, programmers and domestic hot water cylinder
thermostats. This would also help to lead to the same outputs referred to
in the above paragraph.

The mix of improvements to fabric heat loss, space and domestic hot
water heating would help to delivery real energy efficiency which could be
defined as ‘getting the most heat out of the fuel used and keeping it
where it is needed for as long as possible.’ Just installing CWI and loft
insulation will not achieve this.

NEA NI believes that there is scope to enable the installation of low and
zero carbon technologies in existing properties. It would be essential to
have thorough guidance and advice given to households regarding such
technologies to ensure that they are suitable for both the property and the
household.

Energy Advice

In NEA NI’s view appropriate energy advice should be provided in tandem
with all new measures that are installed.

NEA NI agree that the Energy Saving Trust Advice Centre managed by the
NI Energy Agency is well placed to provide a first point of contact for
people seeking energy advice and also information about energy efficiency
schemes and grants available. NEA NI believes that with appropriate
training and sufficient infrastructure and resources to meet additional
demand the Energy Saving Trust Advice Centre could be a suitable
referral mechanism for the proposed energy efficient homes scheme.
Other referral mechanism are also in place that could help the take up of
the scheme.

Views on the means of delivery for the rate rebate


NEA NI believe there may be economy of scale in using the
organisation(s) that manage the energy efficiency levy funding to deliver
the proposed energy efficiency homes scheme, although this should not
be seen as the only available delivery mechanism.

As stated in the consultation, the energy efficiency levy (EEL) is currently
being reviewed by the Regulator, NEA NI agrees that the outcome of this
review needs to be taken into account as the Green Rebate Consultation
progresses and before policy is finalised.

Views on the option of providing a higher level of rebate than is
currently awarded in terms of the Cash Back Scheme

When available the EEL cash back equates to £150 when the householder
spends more than £200 on cavity wall insulation, £75 cash back for a
spend of between £100 and £300 on loft insulation and £150 cash
back for a spend of over £300 on loft insulation. The total cash back
therefore potentially equates to £300.
NEA NI exists to campaign for warm homes and while the proposed
energy efficiency homes scheme will be targeted to non fuel poor
households, it is worth noting that the current high cost of fuel has taken
many more households into fuel poverty beyond the 34% figure in the
2006 House Condition Survey; NEA NI believes there is scope to explore
increasing the rate rebate beyond that which is currently paid through
cash backs.

For example. If cavity wall insulation and loft insulation costs the
householder £1,500 (which, while above the average cost is not unknown)
a rate rebate of 100% or on a sliding scale of the cost could be given,
which would be a more realistic figure than the cash back to achieve the
aim of the Green Rebate proposal. It is emphasised that this is an
example, NEA NI recognises that further work would need to be done on
the percentage needed to incentivise the market and to ensure sufficient
resources were in place to meet increased demand beyond the current
take up and availability of cash backs.

NEA NI also believes there is scope to explore ways of helping
householders to finance the initial cost of the energy efficiency
measures. For example, if as above the cost of the measures is
£1,500 and the Green Rebate later returns all or a percentage of that
cost the householder still needs to find £1,500 to pay for the measures 'up
front'. In the current financial crisis of the credit crunch, raising this
capital to pay 'up front' for the measures could be a disincentive, NEA NI
therefore believes that provision of a Green Loan Scheme, with very low
or zero interest, to help finance initial costs should be explored. This could
be factored in, along with the paybacks achieved through the installation
of energy efficiency measures, as a marketing message leading to a
further incentive.

				
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Description: NEA NIs response to the Department of Finance and Personnel