Insight

Provider, adviser, installer: the Green Deal makers

28 January 2013

The Green Deal is finally underway, with loan deals and government-financed cash backs for consumers now on stream and an advertising campaign in the media. The initiative, based on paying for energy-saving measures from the savings on future energy bills, has been dogged by criticism. But it has also attracted businesses hoping to build a new market. Here, three individuals playing very different roles within the Green Deal talk to Denise Chevin about their strategies and prospects.


1. The Green Deal Provider

The organisation that “glues” the Green Deal together for consumers and businesses. They put the funding package together, in some cases accessing funding arranged by the Green Deal Finance Company and provide the assessment and installation roles either directly or via subcontractors.

Siobonne Brewster, Carillion Energy Services

Few companies have as much riding on the success of the Green Deal as Carillion Energy Services, one of 20 organisations registered so far to be a Green Deal provider. In December it landed the contract to become the delivery partner for Birmingham City Council’s Energy Savers Scheme, which is intended to drive the upgrade of 60,000 social and privately owned homes in the city, as well as schools, health buildings and business premises.

The eight-year contract amounts to an estimated £600m of work, rising to £1.5bn if the delivery partnership mechanism is extended across the west midlands region. But that’s down to Carillion Energy Services and the city council persuading residents and businesses to sign up to the Green Deal.

One of the key figures in making it all work is Siobonne Brewster, strategic development director. She joined Carillion Energy Services (at that time Eaga) in 2010 and is responsible for planning business development and organising training and resources as well as helping to shape implementation of Green Deal policy with the Department of Energy and Climate Change and other industry bodies.

Brewster feels it’s time to cut through the cloud of cynicism surrounding the initiative. “There’s certainly been a great deal of negative feedback surrounding the Green Deal and concern raised as to whether the public will get it,” she says. “But I think people have fallen into the trap of thinking it’s very complicated. And really, when it comes to the consumer, it’s quite simple. They can get energy efficiency measures installed in their homes without it costing anything.”

Even though there’s still uncertainties over the process – particularly to do with interest rates – the key now, she says, is just to get on with it. “I think we all need to get that message across as an industry – and stimulate interest. When people are getting a new boiler, having a new kitchen installed, any type of home improvement, then the SME or whoever it is doing the work, needs to be suggesting energy improvements. We also need to bring out behavioural changes, so that people don’t waste energy.”

For Brewster the Green Deal also provides an answer to one of the pressing challenges of our time – how to get millions of people out of fuel poverty. There are an estimated 6.3 million households in the UK that have to spend more than 10% of their income on energy bills. As income falls and fuel prices increase, this is set to grow from one in four households to one in three by 2016.

That said, she’s not convinced the Green Deal will be enough on its own. Carillion is one of dozens of signatories to a charity-led campaign called Energy Bill Revolution, which is calling on the government to use money raised in carbon taxes — said to be £4bn a year over the next 15 years – to provide households with grants to replace boilers and insulate their homes.

Loan finance

As the provider, Carillion will be drawing down loan finance, which may or may not be arranged by the Green Deal Finance Company, for which it was one of the founding members. The choice of finance provider will all come down to getting the best interest rates.

Meanwhile, Carillion has its work cut out in Birmingham – the first of the core cities to roll out an energy efficiency programme. The work is being kick-started by £2.6m of government funding, part of the £12m it has given to six cities, which is being matched from other council funding, EU money and then cash from the utility company-funded ECO funding stream. The cash is being used to upgrade 120 homes and 10 public buildings, which will act as demonstration projects for a range of property owners: solid wall insulation in hard-to-treat blocks of flats, retrofitting of industrial buildings owned by the council, and also working with private landlords to provide energy efficiency savings for 20 households.

It’s hoped these demonstration projects will kick-start the Green Deal on a wider scale, and the council will be promoting it hard. Brewster says Carillion will be working with local companies to provide both adviser and installation services. These will be both large and small organisations, though firms will have to go through Carillion’s selection procedures. Brewster is both optimistic and realistic about the Green Deal’s prospects. “The whole industry is trying to predict the uptake of the Green Deal, no one knows. There are certainly challenges engaging with consumers. It’s going to be an interesting year ahead.”

 

2. The Green Deal adviser

Responsible for surveying the property and working out the package of measures that meet the “Golden Rule”, which stipulates that the work cannot cost more than the energy savings over a maximum of 25 years.

Tony Harwood, South Tyneside Homes

Tony Hardwood is a Green Deal adviser working for arm’s length management organisation South Tyneside Homes. The ALMO is one of a number of organisations across the north-east taking part in a pilot project to increase the energy efficiency of public and private homes as a forerunner to the Warm up North project — a larger-scale energy efficiency scheme being promoted by Newcastle City Council. The council is planning to implement a Green Deal scheme and is currently in the process of selecting a delivery partner.

Harwood, who was in the Royal Engineers before he qualified as a building surveyor, is one of a team of five from South Tyneside Homes who have been trained to become advisers. They will work internally and also offer their services to outside clients.

Harwood is something of a Green Deal cheerleader. “It’s taken a while to get things right, but once the advertisement campaign gets going, it’s going to be big and a lot of people will benefit,” he says.

The Green Deal adviser has to work out if and how people will be able to benefit under the scheme, so the job requires a blend of technical and people skills. This new professional visits the property to assess the energy performance of the building
using the same methodology as the assessment for awarding Energy Performance Certificates. The next part is the occupancy assessment, which involves gathering information about energy bills and the use of appliances. This information is used to calculate which energy measures might work for meeting the Green Deal’s “golden rule”.

Harwood, like most of the early Green Deal advisers coming through, is already a qualified energy performance assessor. His latest training involved a one-week course at Sunderland College, which cost around £1,400. As well as attending a course it also involves putting together work experience on a portfolio of properties, he explains.

The pilot project Hardwood has been working on has involved the upgrade of 16 properties in South Shields. The homes are privately owned and of non-traditional construction. The homeowners were offered the work, including solid wall insulation, double glazing and loft insulation, free of charge using government funding,to provide exemplars for the region and flag wave for energy efficiency. “It’s gone down pretty well — the take up among households has been great. The homes that have been upgraded look brand new,” says Harwood.

 

3. The Green Deal installer

The contractor that actually carries out the upgrade work to the property. But non-Green Deal works can also instigate a Green Deal package, meaning that in some cases the installer can bring work to the provider, rather than the other way around.

Allan Ronald MCIOB and CEnv, Higgins Construction

Allan Ronald would be the first to admit that when it comes to the Green Deal, no one really knows what’s going to happen. But when the tap is turned on he is making sure that Higgins Group is in pole position for the work. The Essex-based family firm has become the first and only contractor to be certified under PAS 2030 for all energy efficiency measures that are eligible to be installed under the Green Deal. There are 26 of them in total, ranging from loft and solid wall insulation to installing solar panels and replacing boilers. Most other accredited installers are small specialists.

Ronald, sustainability manager at the £165m-turnover-a-year company, says: “You look at the sort of deal that Carillion is signed up to with Birmingham City Council, reckoned to be £1.5bn, and it does motivate the business to get involved.”

However, Higgins’ strategy is not to target the consumer end, which is very much in Carillion’s remit, but the work that will come through the ECO and Green Deal business from the likes of schools and hospitals, local authorities and housing associations. The ECO is reckoned to be worth around £1.3bn a year and is cash that will have to be invested by the energy companies in a number of energy saving activities including replacing the existing schemes the Community Energy Saving Programme (CESP) and the Carbon Emissions Reduction Target (CERT).

It is expected that much of this money will find its way into the social housing sector, where Higgins has already made its name in refurbishment work and where it hopes to initially win work as housing associations and councils look to eradicate fuel poverty.

In terms of getting accredited for the work, Ronald says most of the investment has been in time. It has basically involved putting in place the quality management system PAS 2030 and then being assessed by sector-specific Green Deal certification bodies to ensure the 250-strong company is compliant with it. Higgins is already compliant with the Microgeneration Certification Scheme, which tests technical competence on renewable energy installations.

“PAS 2030 basically walks you through number of good practice checklists — have you conducted an ecological survey prior to starting work? If your main office burnt down do you have a backup system? If you are installing a product with a BBA certificate, can you demonstrate you’ve complied with it? That sort of thing,” says Ronald.

Ronald’s view is that the Green Deal is too big to fail. “My gut instinct is that it’s a big flagship scheme. I can’t see it being allowed to fail. There’s no doubt, though, that it needs greater awareness. Half the people I have spoken to haven’t heard of it.”

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