NIA calls on Energy Companies to reinvest excessive Green Tax cuts in additional home insulation.

Following  today’s publication by the Department of Energy and Climate Change (DECC) of its response to ‘The Future of the Energy CompanyObligation’ Consultation the National Insulation Association (NIA) is calling for the excess cost savings identified by DECC to be invested in providing additional insulation measures for struggling households.

Neil Marshall CEO of the NIA commented: “DECC has acknowledged in its response that their proposed changes to ECO are expected to deliver greater cost savings to the energy companies in aggregate than originally expected and they have invited the energy companies to publicly set out how they propose to ensure that householders benefit from these additional cost savings.  The NIA is urging energy companies to invest these extra savings into additional insulation measures which can provide householders with significant and long term, sustainable savings on their energy bills.”

Marshall added: “In its recent annual progress report the Committee on Climate Change called on Government to increase the ambition of the Energy Company Obligation to 2017 to achieve its carbon targets but DECC is not proposing to do this.   Therefore, additional insulation activity as highlighted above would help in this regards.”

Will Government Act on Advice from the Committee on Climate Change?

On Tuesday 15^th July the Committee on Climate Change published its latest annual report on progress towards the carbon budgets and actions needed to meet these.  The report highlights that strong progress has been made in some areas such as fuel efficiency of new cars and investment in wind generation but that at the current rate of progress future carbon budgets will not be met – the current policies may only reduce emissions by 21-23% between 2013 and 2025 compared to the required 31% reduction.

Why is this? 

The CCC says that one of the main reasons for this is that progress with insulating residential homes has plummeted since the new policies – Green Deal and ECO were introduced in 2013.  According to the CCC whilst good progress had been made with home insulation up to 2012, as a result of the major fall off in installations since 2013 all of the main insulation measures are now well behind the cumulative indicators set by the CCC to achieve the carbon budgets, Cavity Wall Insulation (650k installations below the indicator), Solid Wall Insulation (330k installations below the indicator) and Loft Insulation (45% below the indicator).  

What needs to happen?

One of the key recommendations in the report and advice from the CCC to Government is that given the potential to go further with insulation and the benefits this would bring in terms of cost effective emissions reduction and energy affordability the Government should increase the ambition of the Energy Company Obligation to 2017.

Will Government act on this advice?

We will find out very soon when the decisions on the ECO Consultation are published.