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Sands of time running out for insulation

ImageIf the insulation industry is to avert the predicted Green Deal disaster then there must be a complete change in policy. And it must come soon

“By 2015, there will be up to 100,000 people employed as a result of insulation being installed under the government’s flagship programme, the Green Deal.”

I well recall the speech. It was made just 20 months ago by the then Secretary of State for Energy and Climate Change, Chris Huhne, in November 2010. You can still find it on the Department’s website.

Within the decade, some 14m homes and 2m commercial premises were set to be made energy efficient.

At the time, the government reckoned then (and still does) there were some 26,000 people employed not just in installing insulation – but in manufacturing, distributing, marketing and advising upon its use. These are numbers which my own association is now undertaking work to verify; our initial conclusions are that sadly even this baseline figure considerably exaggerates the numbers employed.

I take this rather personally. My first role in energy efficiency was as a director of a subsidiary of the company that was then the second largest manufacturer of insulation materials in Britain.

Decline in insulation

Twenty five years on, I am witnessing an industry that is approaching the launch of the Green Deal not with the enthusiasm engendered in 2010, but rather with genuine fear that it will lead not to exponential growth, but to a heavy decline in both the number of buildings insulated each year, and the number of people employed as a result.

Because, accompanying the highflown rhetoric and ambition, is the official Green Deal Impact Assessment. Now in its third iteration, it consistently forecasts not heady growth, but instead an immediate decline in the insulation marketplace.

The government’s assessment predicts that the number of loft insulations will fall from 870,000 last year (according to OFGEM figures) to 150,000 in 2013, a fall of 83 per cent. Across the next nine quarters, fewer installations will take place in total than occurred just during the first quarter of this year.

This anticipated rate of loft insulation remains vastly lower than the 2.1m per year which the government’s official adviser, the Committee on Climate Change (CCC), states is required for the UK to meet its climate change targets. Government statistics show that 8m lofts remain inadequately insulated, as do over 6m cavity walls.

The number of cavity walls being insulated is also predicted to fall, from about 520,000 in 2011 (again, an OFGEM figure) to 400,000 in 2013. But, again, the rate of cavity wall insulation is much lower than the 1.4m per year that the CCC says is needed.

Much play has been made of the push towards insulating the many older buildings built with solid walls. Until recently relatively few installations were recorded each year, largely because it is far more expensive to undertake. Indeed, the figure for 2010 was around 25,000 throughout the whole of Britain. But the numbers have been rocketing, largely due to a government-backed programme called CESP (the Community Energy Saving Programme), aimed specifically at installing solid-wall insulation in some of the very poorest neighbourhoods.

Consequently the specialist trade body, the Insulated Render and Cladding Association, anticipates that 75,000 solid-walled homes will be insulated this year. Of these, 60,000 will be done via external wall insulation, and around 15,000 by internal wall insulation.

Sadly, that official Impact Assessment reckons that this number will decrease in 2013 and 2014, with just 147,000 solid walls being insulated between January 2013 and April 2015.

Stock transformation

Last December, the CCC made an unprecedented intervention when it warned publicly that the Green Deal would reach only 2-3m households of the 14m targeted. “The proposal is to take away existing obligations and say ‘let’s leave it to the market’,” said David Kennedy, the CCC chief executive. “We think there is a significant risk in leaving it to the market, as that has never worked anywhere in the world and is unlikely to happen in the UK. We are talking about the transformation of the entire building stock of this country.”

All areas of energy market policy are driving up prices per kilowatt-hour, as the government rightly seeks to deliver a more sustainable and low carbon future. The argument is that what matters to individual consumers is not the cost per unit of fuel, but how high the final bill is. So the fewer kilowatthours consumed, the better.

The insulation industry is a great deal more professional than it was when I joined it. There are many more proper apprenticeships and training. The technologies are tried, trusted and guaranteed. The businesses – many of them small, family-run – are established.

Of all people, these should be the companies anticipating the brave new world of the Green Deal with greatest relish. The Government is still saying their industry will be doubling, even tripling, the numbers employed.

It is still not too late to rectify the position. But it is going to need a whole set of deliberate and purposeful positive policy interventions, starting this autumn. Preferably before the P45s start to flow.

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