Domestic GDA Training – 3. Green Deal & ECO Overview1Training Material © Stroma Certification 2014 | Version 1.7 ABBE Level 3 Diploma in Domestic Green Deal Advice 3. Green Deal & ECO Overview ① The Green Deal & ECO – Purpose & Background ② The Shape of ECO Presented by

Domestic GDA Training – 3. Green Deal & ECO Overview2Training Material © Stroma Certification 2014 | Version 1.7 The Green Deal & ECO – Purpose & Background

Domestic GDA Training – 3. Green Deal & ECO Overview3Training Material © Stroma Certification 2014 | Version 1.7 No Upfront Costs The Green Deal is the coalition Government’s flagship carbon emissions reduction project. The purpose of the Green Deal is to encourage as many people as possible to take measures to make their homes more energy efficient. It will achieve this by providing all of the upfront finance for such measures by way of a loan. Paid back through the energy bill of the home with the savings made form the energy reduction.

Domestic GDA Training – 3. Green Deal & ECO Overview4Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Green Deal The Energy Act 2011 includes provisions for a 'Green Deal‘ and ECO which intends to: Reduce carbon emissions cost effectively. Revolutionise the energy efficiency of British properties. The Green Deal financial mechanism will: Eliminate the need to pay upfront for energy efficiency measures. Provide reassurances that the cost of the measures should be covered by savings on the electricity bill. ECO An Energy Company Obligation will integrate with the Green Deal, allowing supplier subsidy and Green Deal Finance to come together into one seamless offer to the consumer.

Domestic GDA Training – 3. Green Deal & ECO Overview5Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO October The Government launched Green Deal Green Deal will enable homeowners to implement energy saving measures for their property at no upfront cost. The cost of the measures will be paid back through the savings made on fuel bills. A domestic EPC will be required along with an Occupancy Assessment in order to recommend measures that could qualify under Green Deal.

Domestic GDA Training – 3. Green Deal & ECO Overview6Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO How the Green Deal Works In October 2012 the UK Government introduced legislation to make it possible for millions of homes and businesses to have energy efficiency improvements, such as: Cavity wall insulation. Solid wall insulation. Loft insulation. Flat roof insulation. Condensing boilers. Draught proofing. Floor insulation. Solar thermal panels. Photovoltaic PV panels. Under-floor heating. Ground and air source heat pumps or biomass boilers.

Domestic GDA Training – 3. Green Deal & ECO Overview7Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Why is the Green Deal needed? At a local level the Green Deal will enable: households and businesses to improve the energy efficiency of their properties so less energy is consumed less money is wasted.

Domestic GDA Training – 3. Green Deal & ECO Overview8Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Why is the Green Deal and ECO needed? The key focus of the new energy company obligation (ECO) is to assist householders who cannot achieve significant energy savings without an additional or different measure of support. For example: Vulnerable and low-income households. Those living in harder to treat properties, such as solid walled properties. A quarter of the UK’s carbon emissions comes from the energy used in homes and a similar amount comes from our businesses, industry and workplaces.

Domestic GDA Training – 3. Green Deal & ECO Overview9Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Why is the Green Deal and ECO needed? At a national level, the UK needs to become more energy efficient to reduce its greenhouse gas emissions. Failure to do so will risk further dangerous climate change. The Climate Change Act 2008 legislated for a reduction in our carbon emissions. It also set legally-binding carbon budgets across all sectors of the UK economy including our homes, communities and our workplaces. 9

Domestic GDA Training – 3. Green Deal & ECO Overview10Training Material © Stroma Certification 2014 | Version 1.7 Green Deal Purpose Green Deal aims to: Reduce demand for energy. Reduce dependence on imported fuel. Meet carbon reduction targets. Reduce customer cost for fuel. Achieve affordable warmth. Avoid up front cost.

Domestic GDA Training – 3. Green Deal & ECO Overview11Training Material © Stroma Certification 2014 | Version 1.7 Reduce Demand for Energy Making our buildings more energy efficient would help reduce UK energy consumption and demand. By reducing our demand for energy it would be easier to: Satisfy our fuel needs. Reduce our dependence on imports of fossil fuels. Reduce our exposure to fuel price volatility.

Domestic GDA Training – 3. Green Deal & ECO Overview12Training Material © Stroma Certification 2014 | Version 1.7 Reducing Fuel Imports The UK is increasingly dependent on fossil fuel imports, resulting in greater exposure to risks from rising global demand, limitations on production and price volatility. These risks are unlikely to diminish in the short or medium term. Between 1998 and 2008, the UK became a net importer of gas and oil. Net exports of 60 Mtoe in 1998 became net imports totalling 30 Mtoe in This equates to UK production of oil and gas falling from 134% of national demand in 1998 to only 83% of demand in Recent published projections put this ratio at only 52% by 2020.

Domestic GDA Training – 3. Green Deal & ECO Overview13Training Material © Stroma Certification 2014 | Version 1.7 Carbon Reduction Targets The Climate Change Act 2008 establishes a long-term framework to tackle climate change. The Act aims to encourage the transition to a low-carbon economy in the UK through unilateral legally binding emissions reduction targets. This means a: Reduction of at least 34 per cent in greenhouse gas emissions by Reduction of at least 80 per cent by Introducing these carbon budgets now will ensure we meet the targets for 2050 and beyond.

Domestic GDA Training – 3. Green Deal & ECO Overview14Training Material © Stroma Certification 2014 | Version 1.7 ECO The new Energy Company Obligation will integrate with the Green Deal, allowing supplier subsidy and Green Deal Finance to come together into one seamless offer to the consumer. Not every measure will pay for itself for every household. Some homes, due to their construction type, are more complex and more expensive to improve. Such homes may need measures like solid wall insulation which may not always meet this Golden Rule. Extra funding will be needed to make these measures affordable.

Domestic GDA Training – 3. Green Deal & ECO Overview15Training Material © Stroma Certification 2014 | Version 1.7 Reducing Customer Cost for Fuel Household energy efficiency is a key factor. Poor families face a choice of: Living in the cold. And Experiencing physical and social detriment as a result. or Coping with unnecessarily high energy bills. This is caused by poorly insulated, inefficiently heated homes. The cost of the measures needed to improve the fabric of the household often present a barrier to uptake, alongside social barriers which can affect households’ ability to engage with the commercial offer.

Domestic GDA Training – 3. Green Deal & ECO Overview16Training Material © Stroma Certification 2014 | Version 1.7 Affordable Warmth The Affordable Warmth target within ECO, introduced under the Energy Act 2011, requires energy suppliers to assist low income and vulnerable households - by: Providing them with measures they need to stay warm and healthy. Helping them to move out of fuel poverty on a sustainable basis. The Green Deal and ECO, particularly the Affordable Warmth obligation, will be a key strand of the strategy to help address the needs of low income and vulnerable customers, as well as making further progress on tackling fuel poverty.

Domestic GDA Training – 3. Green Deal & ECO Overview17Training Material © Stroma Certification 2014 | Version 1.7 Green Deal Installer Green Deal Provider Building Fabrics Hot Water Systems Lighting Heating Systems Microgeneration Energy Supplier Domestic Energy Assessor (Prerequisite) Green Deal Advisor Green Deal Assessor Organisation GD Oversight and Registration Body GemServ/REAL Green Deal Stakeholders Energy Saving Advice Service

Domestic GDA Training – 3. Green Deal & ECO Overview18Training Material © Stroma Certification 2014 | Version 1.7 Role of the GDAO The Green Deal Advisor Organisation, is required to be certified, will over see the customer journey and is required to provide compliant levels of service to the customer. The GDAO will operate in compliance with the: Specification for Organisations providing the Green Deal Advice Service Specification for Organisations providing the Green Deal Advice Service (currently V005) The Specification can be found at:

Domestic GDA Training – 3. Green Deal & ECO Overview19Training Material © Stroma Certification 2014 | Version 1.7 Role of the GDA Any consumer looking to benefit from the Green Deal will have an impartial assessment undertaken at their property by a Green Deal Advisor (GDA). The occupancy assessment and accompanying advice must be carried out by a qualified and authorised Green Deal Advisor, registered and working with/for a GDAO The assessment of the property will be carried out using a standard methodology, stored and independently quality assured. Appendix V: Calculation of energy use and costs using actual occupancy parameters

Domestic GDA Training – 3. Green Deal & ECO Overview20Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO How does the customer know the assessment is impartial? In addition, the Code of Practice will set out the requirements placed on assessors to ensure that whatever the employment route for the assessor, the assessment and advice provided must be impartial. The code of practice can be found at:

Domestic GDA Training – 3. Green Deal & ECO Overview21Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Where else can customers go to receive impartial advice? The Remote advice line and website operated by Energy Saving Trust will provide information about the Green Deal, including: How the Green Deal finance mechanism works through electricity billing. How to find authorised assessors and installers by area. How liability under Green Deal Plans transfers to subsequent bill payers.

Domestic GDA Training – 3. Green Deal & ECO Overview22Training Material © Stroma Certification 2014 | Version 1.7 Green Deal Process Map

Domestic GDA Training – 3. Green Deal & ECO Overview23Training Material © Stroma Certification 2014 | Version 1.7 FITs If you install an electricity-generating technology from a renewable or low-carbon source such as solar PV or wind turbine, under Green Deal you can claim the government's Feed-In Tariff scheme (FIT) means you get money from your energy supplier. You can be paid for: The electricity you generate, even if you use it yourself. (Generation Tariff) Any surplus electricity you export to the grid. (Export Tariff) You will also save money on your electricity bill since you’ll be using home-generated power. (Cost Savings)

Domestic GDA Training – 3. Green Deal & ECO Overview24Training Material © Stroma Certification 2014 | Version 1.7 FITs The Feed in tariff fact sheetThe current tariffs for PV

Domestic GDA Training – 3. Green Deal & ECO Overview25Training Material © Stroma Certification 2014 | Version 1.7 GDIF From June, people in England and Wales will be able to get up to £7600 back through a new Green Deal Home Improvement Fund so they can take control of their bills and have warmer, greener homes Under the new incentive scheme, which is available from June, domestic energy customers can get up to £1000 for installing two measures from an approved list; and/or up to £6000 for installing solid wall insulation; and up to £100 refunded for their Green Deal Assessment -to-make-your-home-more-energy-efficient

Domestic GDA Training – 3. Green Deal & ECO Overview26Training Material © Stroma Certification 2014 | Version 1.7 RHI The domestic RHI scheme will give financial support for an eligible renewable heating system that heats a single domestic property in Great Britain. The property can be on or off the gas grid. Payments will go to the owner of the heating system. The scheme will support: air source heat pumps (ASHP), biomass systems, ground source heat pumps (GSHP) solar thermal technologies. The support rates vary depending on the technology installed:

Domestic GDA Training – 3. Green Deal & ECO Overview27Training Material © Stroma Certification 2014 | Version 1.7 The Shape Of ECO

Domestic GDA Training – 3. Green Deal & ECO Overview28Training Material © Stroma Certification 2014 | Version 1.7 The Shape of ECO Energy Company Obligation (ECO) will deliver carbon savings and heating cost reductions in line with the indicative 75 (any household), 25 (private) split. The expected investment from suppliers to deliver on their targets at £1.3bn per annum. There will be three obligations: Home Heating Cost Reduction Obligation (HHCRO) – Private tenure Carbon Emissions Reduction Obligation (CERO) – Any Household (GDAR) Carbon Saving Communities Obligation (CSCO) – Any Household (GDAR)

Domestic GDA Training – 3. Green Deal & ECO Overview29Training Material © Stroma Certification 2014 | Version 1.7 ECO Energy Company Obligation ECO 100% Home Heating Cost Reduction Obligation (HHCRO) 25% Carbon Savings Community Obligation (CSCO) Urban/ Rural 85% Targeting insulation measures in low-income communities defined using the bottom 15% of Lower Super Output Areas from the Index of Multiple Deprivation Rural, low income households in settlements with a population size under 10, MtCO MtCO 2 GDAR £4.2 billion Savings Private Tenure Only 1.02 MtCO 2 Focusing on SWI and HTT cavity wall insulation Carbon Emissions Reduction Obligation (CERO) Rural 15% 6.8 MtCO 2 GDAR OFGEM set the targets due to run to 31 March 2015

Domestic GDA Training – 3. Green Deal & ECO Overview30Training Material © Stroma Certification 2014 | Version 1.7 Definitions Solid wall / Hard to treat cavity In a building with 3 or more storeys where each storey has cavity walls. Which a chartered surveyor has reported is not suitable to insulate with standard insulation material or techniques. Which a chartered surveyor has reported is not suitable to insulate without substantial remedial works to the building. o A cavity within a cavity wall which is less than 50mm wide. o A cavity found in homes of prefabricated concrete construction or with metal frame cavity walls. o An uneven cavity formed in walls constructed of natural stone or from natural stone outer leaf and block or brick inner leaf. 30

Domestic GDA Training – 3. Green Deal & ECO Overview31Training Material © Stroma Certification 2014 | Version 1.7 ECO Eligible Improvements ECO scores will be calculated based on the property’s EPC (Carbon & Costs) This will ensure accurate individualised records & calculations per property to establish carbon and bill savings, and allocate funding appropriately Home Heating Cost Reduction Obligation (HHCRO) This will primarily install insulation and heating systems. Carbon Emissions Reduction Obligation (CERO) Energy suppliers will be able to deliver SWI and non-standard cavity wall insulation (HTT). Carbon Saving Communities Obligation (CSCO) Will target the installation of solid wall insulation, loft Insulation and cavity wall insulation to more deprived communities. Where an energy supplier is delivering SWI or non-standard cavity insulation, suppliers will also be able to score further accompanying measures which reduce heat loss from a property, such as loft insulation, glazing and draught proofing.

Domestic GDA Training – 3. Green Deal & ECO Overview32Training Material © Stroma Certification 2014 | Version 1.7 Affordable Warmth Qualifying Criteria Under Home Heating Cost Reduction Obligation (HHCRO) Any measure will be eligible for support if it reduces the cost of heating the property. It will include boiler repairs as an eligible measure, provided that the repaired boiler is accompanied with a level of aftercare for the household. Heat pumps are also included. Qualifying benefits will include: Child tax credit with a household income under £15,860. Income-related employment and support allowance. Income-based jobseekers allowance. Income support, state pension credit. Working tax credit with a household income under £15,860. All benefit criteria have various qualifying components. Eligible households will be those in private tenures only.

Domestic GDA Training – 3. Green Deal & ECO Overview33Training Material © Stroma Certification 2014 | Version 1.7 Affordable Warmth Qualifying Criteria (a)child tax credit, and has a relevant income of £15,860 or less (b) income-related employment and support allowance, which must include a work-related activity or support component, and: (i) has parental responsibility for a child under the age of 16 who ordinarily resides with that member; or (ii) is in receipt of a qualifying component; (c) income-based job seeker’s allowance and: (i) has parental responsibility for a child under the age of 16 who ordinarily resides with that member; or (ii) is in receipt of a qualifying component; (d) income support and: (i) has parental responsibility for a child under the age of 16 who ordinarily resides with that member; or (ii) is in receipt of a qualifying component; (e) state pension credit. (f) Working tax credit and has an income of £15,860 or less and: (i) has parental responsibility for a child under the age of 16 who ordinarily resides with that member (ii) Is in a receipt of a disabled worker element or severe disability element or (iii) Is 60 years or over

Domestic GDA Training – 3. Green Deal & ECO Overview34Training Material © Stroma Certification 2014 | Version 1.7 Carbon Emissions Reduction Obligation (CERO) Who is it for? The “Carbon Emissions Reduction Obligation ” within the ECO is designed to focus primarily on supporting those households who live in hard to treat homes who cannot fully fund energy efficiency improvements through Green Deal finance alone. Other measures under the carbon saving obligation will only be classified as eligible if they are promoted and installed as part of a package that includes solid wall insulation.

Domestic GDA Training – 3. Green Deal & ECO Overview35Training Material © Stroma Certification 2014 | Version 1.7 Carbon Saving Communities Obligation Carbon saving communities obligation is designed to target Hard to treat homes. Insulation measures in low-income communities defined using the bottom 15% of Lower Super Output Areas from the Index of Multiple Deprivation, or equivalent indexes in Scotland and Wales. Suppliers will be required to deliver 15% of their overall Carbon Saving Communities Obligation to: Rural, low income households in settlements with a population size under 10,000. Rural households in receipt of a qualifying benefit or tax credit under the ECO Affordable Warmth eligibility criteria. Include cavity wall, loft and solid wall insulation.

Domestic GDA Training – 3. Green Deal & ECO Overview36Training Material © Stroma Certification 2014 | Version 1.7 Responsibility for delivering the ECO Energy Company criteria: This will be appointed to suppliers based on their energy sales volume i.e. kWh energy sold to domestic customers. With an exemption for suppliers with fewer than 250,000 domestic customer accounts and a smooth increase in the obligation for companies who cross this threshold.

Domestic GDA Training – 3. Green Deal & ECO Overview37Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO: Qualifying Measures Green Deal Measures In ECO Home Heating Cost Reduction Obligation (HHCRO) (Affordable Warmth)? In ECO (Carbon Emission Reduction) Obligation? In ECO (Carbon Saving Communities obligation)? Measures/text in bold were added after the consultation Low income and vulnerable households identified individually through benefits data (measures which reduce cost of heating the home) All households Homes in defined low income areas Air source heat pumpsYNN Biomass boilersYNN Biomass room heaters (including with radiators)YNN Cavity wall insulationYPY Cavity wall insulation (HTT)YYY Cylinder thermostatsYNN District heating (not GD)YPY (if has LI or CWI) Draught proofingYPY Duct insulation NNN Hot water showers (efficient) YNN Source: ‘Which energy efficiency improvements qualify for Green Deal Finance?’, DECC, June 2012 Colour Key Always eligibleEligible as part of a package with solid wall insulation or hard-to-treat cavity wall insulation Never eligible

Domestic GDA Training – 3. Green Deal & ECO Overview38Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO: Qualifying Measures Hot water systems (efficient) YNN Hot water taps (efficient) YNN External wall insulation systemsYYY Fan-assisted replacement storage heatersYNN Flue gas heat recovery devicesYNN Ground source heat pumpsYNN Heating controls (for wet central heating system and warm air system)YNN Heating ventilation and air-conditioning controls (including zoning controls) YNN High performance external doorsYPY Hot water cylinder insulationYNN Internal wall insulation (of external walls) systemsYYY Lighting systems, fittings and controls (including rooflights, lamps and luminaires)NNN Loft or rafter insulation (including loft hatch insulation)YPY Mechanical ventilation with heat recoveryNNN Micro combined heat and powerYNN Micro wind generationYNN Pipe-work insulation Y (external pipework only) PhotovoltaicsNNN Chillers (commercial only) NNN

Domestic GDA Training – 3. Green Deal & ECO Overview39Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO: Qualifying Measures Gas-fired condensing boilersYNN Replacement glazingYPY Oil-fired condensing boilersYNN Warm-air unitsYNN Radiant heatingYNN Roof insulationYPY Room in roof insulationYPY Roof insulationYPY Room in roof insulationYPY Sealing improvements (including duct sealing) NNN Secondary glazingYPY Solar water heatingYNN Solar blinds, shutters and shading devices NNN Transpired solar collectors NNN Under-floor heatingYNN Under-floor insulationYPY Variable speed drives for fans and pumps NNN Waste water heat recovery devices attached to showersNNN Water source heat pumps YNN

Domestic GDA Training – 3. Green Deal & ECO Overview40Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO Finance

Domestic GDA Training – 3. Green Deal & ECO Overview41Training Material © Stroma Certification 2014 | Version 1.7 Potential Sources of Financial Support ECO The GDA will be required to know the eligibility requirements for ECO. For the affordable warmth section of the target, what are the benefit requirements. For the carbon target, what are the eligibility measures.

Domestic GDA Training – 3. Green Deal & ECO Overview42Training Material © Stroma Certification 2014 | Version 1.7 Green Deal & ECO: Further Reading Department for Energy and Climate Change website: er/gd_customer.aspx

Domestic GDA Training – 3. Green Deal & ECO Overview43Training Material © Stroma Certification 2014 | Version 1.7 Questions?

Domestic GDA Training – 3. Green Deal & ECO Overview44Training Material © Stroma Certification 2014 | Version 1.7 Stroma Certification Ltd. 4 Pioneer Way, Castleford, WF10 5QU Web Links Contacts