What is the future for ‘Pay as you Save’?

WHAT IS THE FUTURE FOR ‘PAY AS YOU SAVE’?

12 April 2017

We previously featured Elmhurst Managing Director Martyn Reed’s immediate reaction to the February launch of the Bonfield report, which appeared just before Christmas.  Since then there seems to have been very little happening as a result of the report, but Martyn believes there have been significant developments in the potential application of the pay-as-you-save model.  Here he recalls some significant aspects of the launch and looks at the future prospects for assessors.

The ‘Each Home Counts’ report, originally titled the ‘Bonfield Review’, actually makes little mention of Green Deal, or any of the infrastructure that was built around it, or the poor consumer take up.  Instead it seems to be a response to the widely reported quality of installation issues and makes 27 recommendations about how that quality can be improved, and how consumers can be given better advice (you can take a look at these via: www.elmhurstenergy.co.uk/eachhome-matters-report-published).  The report recommends a new framework as well as enhanced consumer protection.

Elmhurst Energy was then pleased to be invited to the formal launch of the report at a reception in Westminster on 2 February 2017.  Our reason for attending was to ensure the designers of any new scheme fully appreciate the value of Energy Performance Certificates and the army of Energy Assessors who produce them.  It was also our opportunity to insist that any pay-as-you-save model needs to start with independent advice given by trained and qualified experts.

Peter Bonfield opened the proceedings by explaining why the review was necessary and how it was structured.  He was thankful to both the civil servants within BEIS and DCLG, for their commitment, and to the implementation team chairmen for the way that they had listened to the industry and stakeholder views and managed to consolidate their conclusions so succinctly.

Since its publication BRE has received 75 responses, including one from Elmhurst Energy; the vast majority of which were positive and wanting to be involved in its delivery.  Peter Bonfield closed by announcing that he would now stand down as chairman and expressed the importance of industry selecting a new chair in whom they had confidence.

John Booth from BEIS spoke about the Government’s commitment to the report and eagerness to see action happen.  Julian German, a Councillor from Cornwall, then spoke about their work with BEIS to pilot the recommendations from the Report; a move that was described as “learning on the job”.

Twelve work items have been selected and attendees were invited to become involved in any of interest.  Elmhurst is to be involved in four of the twelve which we think are of most interest to members;

1. Information hub and data warehouse – which will design the front end of the process to capture consumer interest and give appropriate advice

2. Skills and Training – which will define the competencies required of participants, including advisors

3. Data Privacy and Protection – which will investigate how the process can make best use of existing data, such as the EPC register and that from smart meters

4. Experience and learning – which will define critical success factors and measure progress in achieving it.

Elmhurst’s views on the Each Home Counts report are;

• We are pleased that EPCs are seen as the starting point for energy efficiency measures.

• Many of the recommendations appear similar to those set up for Green Deal, Code of Practice, Green Deal Mark etc. Only when we get the detail will we be able to assess their likely effectiveness.

• It is disappointing that low take up of Green Deal plans has not been analysed or addressed, although mention of “new private investors” could be exciting.

• We are pleased that work being done by Elmhurst Energy, and other accreditation schemes, to review the quality control processes around the production of EPCs. has been acknowledged.

• It is disappointing that the roles of Advisors and Assessors are not mentioned, and there is no reference to the current occupancy assessment process.

• Good news that Energy Performance Certificates are to be a key element of this new “Data Warehouse”.

The second piece of news, and obviously related to the first, is that the Green Deal Finance Company, which went into hibernation when DECC withdrew funding in 2015, has been sold to Greenstone Finance and Aurium Capital Markets. The new owners describe themselves as being “Greenstone Finance, which invests in organisations focused on financing in renewable energy and energy efficiency”, and Aurium, “a structured finance boutique with a focus on renewable energy”.  The new owners have said they intend being able to offer loans from early 2017.

This news is just in time for the new Private Rental Sector / Minimum Energy Efficiency Standards which require landlords to make improvements when suitable financial options are available.  Elmhurst is delighted that a company with significant consumer finance experience, and a desire to help create an energy efficient society have become involved and we hope they are able to breathe new life into the pay-as-you-save model.

The fact that the new owners have said “Green Deal Advisors will still play a vital part in Green Deal” is the first reassurance that the individuals and companies that invested time and money into Green Deal will get a return on their investment.

Elmhurst Energy looks forward to working with the new owner of GDFC, BEIS, DCLG, BRE and the implementation team to help make this pay-as-you-save a success.  There is no doubt that success is necessary if we are to reduce the demand for energy, take families out of fuel poverty and reduce carbon emissions that create climate change.

This article first appeared in the Elmhurst Energy Matters newsletter for Spring 2017

To download a copy of the newsletter click here

See also – Launch of the Bonfield Report

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