DECC’s Household Energy Efficiency Statistics: the good, the bad and the whaa...?

DECC recently published its energy efficiency statistics for 2015, drawing together data from ECO, Green Deal and the GD HIF to show the numbers and types of measures installed in homes during the year. It’s a document full of numbers with (annoyingly) most charts shown in a separate spreadsheet, but here’s a summary of things that might be of interest.

Let’s start with the good news:

• Overall, ECO has installed energy efficiency measures in around 5% of households in Great Britain.

• In 2015, 320,000 homes had cavity wall insulation installed, 230,000 had new loft insulation, and 50,000 had solid wall insulation fitted. 

• Scotland, the North East and the North West had the highest hit rates per 1000 homes of ECO installations. The West Midlands and South Wales did well too.

• Over 620,000 Green Deal Assessments have been carried out – a rich data set!

• And by the end of September 2015, over 1.6 million smart meters had been installed (though the report does acknowledge that there’s no real crossover of data with energy efficiency programme delivery).

Here's a lovely nugget:

28% of installations under the GD HIF were in the private rented sector. 28%! That’s a huge take-up from a normally lacklustre sector! Compare it with 6% of GD Finance installs going into the sector. The report goes into woolly (and frankly poor) analysis at this point, but let’s just focus on one possible lesson here: a simple, compelling money-off offer was enough to persuade a body of landlords to improve the energy efficiency of their homes. Given that we have spent at least two decades and a large number of brain cells trying to crack the PRS, we should be shouting this from the rooftops and trying to understand whether it is linked to the proposed introduction of energy efficiency regulations, local landlord association activity, local authority schemes, or something completely different. DECC: please do some research with landlords who took up GD HIF to find out more!

OK. That’s the good news. Now let’s get to the bit you really want: the rant:

ECO collapso

ECO installed 45% fewer measures in 2015 than it had in 2014. And 2014 wasn’t exactly a golden year for energy efficiency. The shrinking of ECO at the end of 2014, uncertainty over who would win the election, the future of policy generally and the future of specific schemes: all led to a significant downturn in energy efficiency activity (though only the first of these is noted in the report).

Green Deal may not be dead but it sure ain’t moving…

There was a 43% decrease in the number of Green Deal Assessments compared to 2014. In the report, this is ascribed to the reduction in ECO, but I’d imagine it also had something to do with the ebb and flow of GDHIF and Green Deal Communities. Oh, and the pulling of funding to the Green Deal Finance Company in July 2015 which – we were assured – did not signal the demise of Green Deal. Now I’m no great defender of Green Deal, but let us at least acknowledge the market shocks that are created when policies are cut without warning and the implications that these have for people’s jobs, livelihoods, wellbeing and home improvement plans…

Solid wall insulation: bad news, good news and some shaky maths

Here’s an interesting one for you: 89% of properties with GDARs had an energy efficiency rating of D or lower. That’s 569,900 homes.

Firstly, this suggests that people in less energy efficient properties are the ones looking to improve energy efficiency (OK, that’s self-evident but also reassuring to know).

Of the 569,900 properties rated D or lower, 169,000 were recommended solid wall insulation in their GDAR (whatever funding route they might have been considering). So only 30% of the D or worse properties were recommended SWI.

Let’s pretend that all of the D rated properties had cavity walls, and just focus on the E, F and G homes. That makes it 169,000 recommendations of SWI out of 255,000 homes, a much more respectable 66%.

Two things here:

The bad news is that 1/3 of homes with E-G ratings were not being recommended SWI in their GDAR (and even allowing for listings, conservation areas, park homes and untreatable walls, I can’t believe that should be the case).

The good news is that 50,000 homes had SWI installed. This suggests that there’s a 1 in 5 ratio that a GD assessment would lead to SWI, and about a 1 in 3 chance that a GDAR recommending SWI would lead to SWI being installed. Of course, these stats relate to a time of generous grant funding for SWI but even so: that’s a sales pipeline to be envied (if my maths are right).

(Probably what the maths mask is the number of tower blocks that received SWI through ECO – individual dwellings may not have had an assessment as part of this process?)

250,000 missed opportunities?

40% of GDARs only recommended one measure. Say what? In a comprehensive home energy assessment, in 40% of homes, the assessor could only find ONE THING to recommend? That’s like going into Subway and thinking they only sell cheese sandwiches: you’ve missed something.

My inkling is that these were ECO assessments designed to focus on recommending the measure that was about to be funded. If this is true then, firstly, we have missed a massive opportunity for almost 250,000 households to gain a fuller understanding of their energy use, and secondly, we need to have words with scheme designers and energy assessors about doing the job in the best interests of the customer, not the scheme.

A behavioural insight

Something that’s in the data tables, but not in the report, is what people actually spent their money on under Green Deal. It’s interesting: under Green Deal Finance, 31% of measures were boilers, and 29% were microgeneration (almost all of this PV). 15% of measures were SWI, which is actually a pretty good showing for SWI!

Now compare that to GD HIF which was much more targeted: 74% of measures were SWI and only 11% were boilers (no microgen allowed because of double-funding constraints).

Which means? Well, when you give a customer a choice of everything, they choose things which are familiar (and possibly exciting). But those boilers were probably earmarked for replacement by households anyway and the PV market was doing fine before Green Deal came along, so it seems that the finance mechanism just enabled some households to borrow money to pay for a thing they would have been doing anyway. 

By contrast, solid wall insulation is almost all additional right now – there’s a very tiny market in the absence of subsidy. So a bit of choice editing in policy design and you perhaps get the outcome that you want – good old additionality.

Liz’s final word

Fair play to DECC for publishing the statistics and for making data available. There’s a lot in the data tables that I haven’t covered here, including stats for all local authority areas and Parliamentary constituencies. If you want to make the case to your local MP or Councillor that more needs to be done on energy efficiency, carbon reduction and fuel poverty, then the data tables are a fantastic resource.

However, some of the analysis that goes alongside the data, in the DECC report, is – well – poor. There are partial explanations, simplifications, some arguments that are circular and some that seem just wrong. I love that the data is there, but I worry about the quality of analysis that accompanies it.

Perhaps a strategy for the next publication of data would be to bring together a group of stakeholders, share the findings and talk about the reasons why, the implications of and the plans for moving the sector forward. Tell you what: I’ll facilitate. It’ll shut me up!