SSE Energy Solutions – 03 May 13 Dave McEvoy Care and Repair Conference

ECO - Green Deal AN ENERGY PRESCRIPTION Why are energy companies here? Why is funding available?

What is Energy Company Obligation (ECO)? Energy Company Obligation (ECO) is a scheme launched by the UK Government, who say “it will focus energy companies on improving the ability of the vulnerable and those on lower incomes to heat their homes affordably”. ECO tackles existing domestic homes and in particular the more expensive measures such as solid wall insulation and hard to treat cavity walls. ECO is also designed to target bill savings of those on certain benefits. This allows us to give products and services to this group.

Why are we here? The Government’s new Energy Company Obligation means that SSE will pay for and install energy efficient gas boilers and provide insulation into the homes of people currently claiming qualifying benefits. Best of all, in most cases, this is completely free. Visit our stand to learn more about Affordable Warmth. This part is the Home Heating Carbon Reduction Obligation (HHCRO) of ECO, see next slide

ECO Targets Home Heating Cost Reduction Obligation (£4.2bn of lifetime cost savings). Requires energy suppliers to provide measures which improve the ability of low income and vulnerable households (the ‘Affordable Warmth Group’) to affordably heat their homes. A heating qualifying action is the installation of a measure that will result in a heating saving; including the replacement or repair of a qualifying boiler. Affordable Warmth – next slide

ECO Targets (HOW MUCH? And MORE) ECO funding is divided between two targets: i - carbon saving, which includes a carbon saving communities sub target ii - affordable warmth. The proportion between these two targets is approximately 75% carbon saving 25% affordable warmth. DECC’s split in terms of cost is estimated at: £760m/yr Carbon Saving- CERO £190m/yr Carbon Saving Communities - CSCO £350m/yr Affordable Warmth - HHCRO The Carbon Reduction Target (all above) has been estimated at £1.3 billion, an amount described by energy companies as conservative. Please remember that as more is paid / tonne of carbon, energy bills will increase to offset the costs to the bigger energy firms

ECO Targets Carbon Emissions Reduction Obligation (20.9 million lifetime tonnes of carbon dioxide). Focusing on hard to treat homes and, in particular, measures that cannot be fully funded through the Green Deal. Solid wall insulation and hard-to-treat cavity wall insulation are the primary measures that the Government intends to be promoted under this target. Other insulation measures and connections to district heating systems are also eligible if they are promoted as part of a package that includes solid wall insulation or hard-to-treat cavity wall insulation.

ECO Targets Carbon Saving Community Obligation (6.8 million lifetime tonnes of carbon dioxide). Focusing on the provision of insulation measures and connections to district heating systems to domestic energy users that live within an area of low income. This target has a sub-target, which states that at least 15% of each supplier’s Carbon Saving Community Obligation must be achieved by promoting measures to low income and vulnerable households living in rural areas.

SSE Energy Solutions / Home Services / SMART Services SSE – What else is available?

Heating Homes Off gas Grid areas Electric (Uncontrollable) Oil (Delivery issues) L.P.G (rising costs) Solid Fuel (hard work) Renewable heating can save fuel Comfort levels through the property Easy controls

Examples of Renewable Energy (David Smith)

The Smart Services Offering –An interactive, bespoke energy efficiency review of your home with personalised recommendations –A tariff review and independent price comparison –A bill health check and guidance to help you understand your bill and what you’re paying for –A visual check of your home to identify areas where you could be more energy efficient –Advice on energy products and services –A ‘smart plan’ covering all aspects of the visit –The conversation is all about the customer’s agenda Example locations in Scotland

Green Deal – Private and Social Tenants

Green Deal Green Deal is described by DECC as the Coalition Government's initiative to support the implementation of energy efficiency measures to households and businesses without upfront costs. Bill payers will be able to get energy efficiency improvements without having to front up the cash. Instead, banks and lending institutions (Green Deal Finance Company) will provide the capital, getting their money back via the energy bill. (Note not all fuel poor will get help). RSL’s / local authority may be able to provide information on this to private home owners in between housing stock, factored or part owned.

Green Deal Rules 1. The expected financial savings must be equal to or greater than the costs attached to the energy bill, known as “the golden rule" of the Green Deal. 2. The measures must be approved and the claimed bill savings must be those accredited through this process. 3. The measures installed must have been recommended for that property by an accredited, objective adviser who has carried out an assessment. 4. The measures must be installed by an accredited installer. 5. For householders, the Green Deal provider must give appropriate advice within the terms of the Consumer Credit Act and take account of the individual circumstances of the applicant.

Green Deal and Social Tenants Tenants can ask for Green Deal measures but the RSL will have to give permission to complete If the RSL wants to use Green Deal to upgrade (the tenant pays through their energy bill) then permission will be required from the bill payer (if flats then all tenants will have to agree) New tenants will have to be informed in advance if the property has a Green Deal loan against the home You should provide tenants with a EPC (in Scotland with the recommendations report attached) Tenants can still move their energy supplier, the repayment will just move to that new supplier

Raigmore Community Project - EWI Project management of the installation of a range of energy efficiency measures to just under 100 houses in the Raigmore area of Inverness. The two property types on the project were Wimpey No Fines and Swedish Timber, and installation of external wall insulation has dramatically improved the aesthetic appearance of the properties. In Raigmore measures were installed on behalf of individual homeowners, providing more of a challenge that working with a local authority or housing association.

Raigmore Community Project (cont.) Wimpey No Fine House BeforeDuringAfter

Raigmore Community Project (cont.) Swedish Timber House BeforeAfter

What Do I Get / Need to Do? Housing Providers / Council / Private Home Owners / Tenant

SSE – Dedicated Offers A dedicated SSE Operative to discuss your options Up to date information on changes to Green Deal (ECO) Work with a registered and experienced installer Funding requests will be made automatically for you Initial proposals completed with costs (if any) for consideration Full compliance with ECO and carbon reporting Peace of mind by working with a FTSE top company A dedicated SSE Operations Manager on site Other SSE offers (e.g. Retail / Energy)

Questions? Dave McEvoy ( ) SSE Energy Solutions – Your Route to Funding / Improvements