As part of the Cert scheme, companies have to install insulation and other energy efficiency measures in “superpriority” homes – those suffering most from fuel poverty. But mid-year, energy companies are on a trajectory to fail those targets by a huge margin.
As the government moves slowly towards the final framework for the Green Deal, and replacing Cert (and Cesp) with Eco, it must learn the lessons from those previous initiatives. Cert is a relatively simple scheme, offering mostly free stuff, yet still it has been very challenging to implement.
It has been hard for utilities to identify their superpriority targets, and the problems of obtaining or sharing the data that might help direct companies’ efforts have been discussed many times. It has also been hard to convince people of the benefits of the scheme and get them to take it up. That will be still tougher for its more complex Eco successor.
There are consequences for companies that fail Cert targets. They face fines of up to 10 per cent of turnover, but this seems to be an ideal case for the new-style penalties Ofgem is pursuing. In place of a fine that goes straight to the Treasury, firms should be financially penalised by having their targets increased, at a continued ambitious pace.
Ofgem has declined to say what approach it will take to penalising companies but in this case pre-planning the penalty could be helpful – not to give companies the option of assessing whether a fine is worth the cost, but to keep the programme going at full speed and avoid it heading for the kind of boom and bust that generally accompanies a change in support schemes. Otherwise, come December, many families who should have been helped by the measures will be facing the coldest months of the year without the improvement in energy efficiency that the scheme should have assured, and with all the financial and health costs of that failure.
Janet Wood
This article first appeared in Utility Week’s print edition of 15 June 2012.
Get Utility Week’s expert news and comment – unique and indispensible – direct to your desk. Sign up for a trial subscription here: http://bit.ly/zzxQxx