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.