EEC Funding in the Able-to-Pay sSctor

By Jake Roos, Acting Chair of the Essex HECA forum, Uttlesford District Council - 3rd March 06

The recent reduction in the availability of Energy Efficiency Commitment (EEC) funding for able-to-pay insulation has come as an unwelcome surprise to many who promote energy efficiency.

Many local authorities play a role as community advisors on energy efficiency, helping promote EEC funded insulation schemes to residents to make progress on our HECA obligations. Our promotional efforts and advice (and the efforts by others such as installers, the Essex EEAC and the Energy Saving Trust) this winter were paying off. My local authority Uttlesford District Council has seen a 450% increase on average in the number of building notices submitted to us for cavity wall insulation in the last quarter compared to the previous three quarters.

I first became aware of the EEC funding withdraw for able-to-pay around the start of February, indirectly from a resident. On investigation I learned that many of the schemes I had been directing people to no longer had funding. After many weeks of uncertainty, the situation is now becoming clear. As far as we can tell this funding cut has been very wide-spread. Around half of the national energy supplier-branded schemes are still taking customers. Contractor schemes (those not branded as coming from a particular energy supplier, often with a local authority partner) are more severely affected.

The sudden reduction in the availability of grants for able-to-pay with little or no notification leaves us in a difficult and embarrassing position. Marketing efforts need to be cut short, vast quantities promotional materials become useless. Insulation installers have an interruption in workload that may put some of them out business. Those giving advice on energy efficiency have either unwittingly given out false information or were put in an uncertain situation that they couldn't properly advise on.

Even though I'm sure the grant funding for able-to-pay will start again, a lot of the 'momentum' that had recently been built up by those at all levels, national and local, has been lost and will take a lot of work to regain. This also coincides with the unfortunate funding gap for household renewable technologies, caused by the end of Clear Skies and the PV Major Demonstration Programme, and the uncertain situation with the beginning of the Low Carbon Buildings Programme. We have very little to offer people.

According to the National Insulation Association, the situation has been caused principally by energy suppliers being ahead of their allocated targets and cutting their budgets to minimise price rises to their customers. They are well within their rights to do this. Giving this flexibility to the energy suppliers is one of the reasons EEC generally works so well compared to more tightly controlled grant schemes. But that doesn't change the fact that abrupt changes to the -parameters' of an industry, such as grant funding, are bad for business. And we're not selling satellite dishes here - energy efficiency and micro-generation are key elements in the fight against climate change. For this reason, in future we would appreciate it if those who control these flows of money do so with more finesse than simply 'on' and 'off'.

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Responses

Gordon Glass, Marketing Co-ordinator, Milton Keynes Energy Agency - 15th March 06

I couldn't agree more. MKEA manages an insulation grants and discounts helpline where we try to source the best deal for callers from the surrounding local authority areas. We also heard of the suspension and slashing of a number of EEC schemes about a week after the event. We were immediately obliged to mail over 800 people since we'd given them price ranges for insulation work (subject to survey) which were quite simply no longer available.

So in a period where we'd built the momentum of calls to a crescendo we were, for several weeks, put in the embarrassing position of having to play catch up. Installers are also understandably concerned. In the case of one of the installers we refer to, the drop in available subsidy has led to significantly higher quotes. As a result, around a quarter of our callers, primed to have work carried out cheaply, are expressing resistance to what now appear to be less than bargain prices.

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