Taylor armitt gd opportunities ho

1. 11/07/2012
Main features of Green Deal
THE GREEN DEAL
Possible responses from the
(including June DECC updates) ‘market’
Accessing the opportunities Delivery Options and
structures.
Bill Taylor Collaborative Delivery
Taylor Armitt Consulting
Health warning– the GD is complex – any presentation will necessarily
e: bill@taconsulting.org 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.
www.taconsulting.org
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
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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 time
Index 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
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3. 11/07/2012
Green 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 March
Green 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 re
See website refs at end of PAS2030, inc audit requirements
presentation
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4. 11/07/2012
Who can predict the
future? Probably only Walt
Disney........
Possible responses
from the ‘market’
Green Deal – is there a market?
•Market research by DECC
•Some owners occupiers interested but reluctant to pay for
assessment up front and concerned re impartiality of advice
and ‘Golden Rule’ working
•Private landlords – ‘better’ ones may be interested but
problem of disrepair for many in lower market.
Green Deal –
•RSL pilots indicate some interest but lot of support needed on
the ‘journey’ (ref Affinity Sutton, Gentoo websites). Also much Delivery Options and
of ‘basic’ work done so Golden Rule issues if not HTT.
•DECC research into terminology – ‘new sort of loan – to
Structures
property, 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?
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5. 11/07/2012
‘Able to Pay’ model Part ‘Able to Pay’ model
Green Deal – Finance
PROS
•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.
Marketing
CONS
•Admin requirements to become GD Provider and so GD
qualify 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 and
on work and warranties. pays GDP
Green 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
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6. 11/07/2012
Working Together – WHY and HOW
•Doing it all requires broad range of skills
• Investment needed and risk element of obtaining all Summary
accreditations
•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 resolved
from 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 and
appetite/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
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7. 11/07/2012
Green Deal
Summary
CONTACTS
•DECC
http://www.decc.gov.uk/en/content/cms/tackling/green_deal/green_deal.aspx
e:bill@taconsulting.org
•AGMA
http://manchesterismyplanet.com/shaping-a-low-carbon-economy Thank you- 07876 241943
www.taconsulting.org
Any questions?
British Standards Institute
www.bsigroup.co.uk
•Construction Products Association
www.constructionproducts.org.uk
All Slides © Taylor Armitt Consulting 2012
•Taylor Armitt Consulting
www.taconsulting.org
bill@taconsulting.org
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