Chapter 1: Suppliers (p 13 – 22)

It is important that Government work with industry to determine ambitious but realistic targets, and that there are steps in place for Government to take if targets are not being met. Overall, the NIA support this proposal as it provides more consistency and stability for industry by guaranteeing a certain level of funding each year, which is very important for the supply chain.

The NIA also welcome the concession allowed for the first year of the programme as it is likely that there will be some issues identified, which the concession should allow time for these to get resolved. The NIA recommend that the targets are reviewed on a regular basis, ensuring they are ambitious, realistic, and that suppliers are adhering to them.

The current energy crisis has made it even more urgent to deliver insulation measures to households as soon as practically possible. Annual gas and electricity bills for a consumer with typical levels of consumption have risen by 141% and 65% respectively since winter 2021/22.[1] With the prospect of a further 20% rise to the energy price cap in April 2023, if measures are ready to be installed before the ECO+ Order coming into force, and the legislation has been laid, then there is no reason to delay. The sooner we can install insulation and save consumers money on their energy bills, the better.

No comment.

Yes, we agree that some level of carry-under is important to aid with the overall flexibility of the scheme. However, we believe that there should be a limit on the amount such a mechanism can be used to ensure as many measures as possible are carried out in Year 1 of the scheme.

Given that the mandatory annual targets for Year 1 are already less than half of the targets for Year 2 and Year 3, we hope that suppliers should be able to meet their Year 1 targets.  Therefore, we believe this carry-under mechanism should only be used in exceptional circumstances whereby suppliers have a valid reason for failing to meet their annual targets. The carry-under mechanism should not be an excuse for suppliers not to meet their Year 1 obligations.

In the context of the current energy crisis and the ongoing climate crisis, it is imperative that insulation measures are delivered to as many households as possible, as soon as possible. Soaring energy prices mean that many more consumers are struggling to pay their energy bills and are at risk of falling into fuel poverty. Insulation has the potential to address this, as it significantly lowers the energy demand of a property. In order to reduce energy bills and the financial burden on consumers, suppliers should be incentivised to meet their targets as soon as practically possible. As such, we do not agree with suppliers deferring meeting their annual targets without good reason.

If suppliers have overspent in Years 1 and 2 of the scheme and are therefore ahead of their overall ECO+ targets going into Year 3, it is important that there is still an incentive for suppliers to meet their Year 3 targets. Wherever possible, suppliers should be encouraged to exceed their targets, and this includes their whole scheme targets due at the end of Year 3. This could potentially be linked to an extension of the scheme, whereby suppliers that have overspent over the course of the scheme are allowed to carry over targets into any future scheme.

However, in practice, installer referrals are also a key part of the search process, as they can identify potentially eligible households at a local level, who may have been overlooked by suppliers or LAs. Considering the wider eligibility pool of ECO+, we envisage that installers will continue to play an integral role in the search process of this scheme.

For installers, search costs are generally higher because they cannot benefit from the same economies of scale as suppliers or LAs. In these cases, search costs are first incurred by installers and then passed onto suppliers. Hence, it is vital for installers that the government allocates sufficient resources towards search costs. It is important that the government’s assumed search costs take this into account. If not, there is a risk that search costs may be underestimated, which could prevent the Government from reaching its target to deliver insulation measures to 410,000 households through ECO+. If search costs in practice turn out to be higher than the Government’s estimates, then the current funding pool allocated for search costs will restrict the number of households that can be reached by the scheme.

However, in practice, installer referrals are also a key part of the search process, as they can identify potentially eligible households at a local level, who may have been overlooked by suppliers or LAs. Considering the wider eligibility pool of ECO+, we envisage that installers will continue to play an integral role in the search process of this scheme.

For installers, search costs are generally higher because they cannot benefit from the same economies of scale as suppliers or LAs. In these cases, search costs are first incurred by installers and then passed onto suppliers. Hence, it is vital for installers that the government allocates sufficient resources towards search costs. It is important that the government’s assumed search costs take this into account. If not, there is a risk that search costs may be underestimated, which could prevent the Government from reaching its target to deliver insulation measures to 410,000 households through ECO+. If search costs in practice turn out to be higher than the Government’s estimates, then the current funding pool allocated for search costs will restrict the number of households that can be reached by the scheme.

The NIA also suggest that given that the eligibility of the general eligibility group is based on council tax bands, those with access to council tax data such as LAs should be involved in local delivery and the search process, which could increase search efficiency and lower search costs significantly.

The risk with the current design of the scheme is that it does not make the most efficient use of search cost and administrative resources in the long-term. According to the ECO+ impact assessment, 40% of the properties targeted by ECO+ will require further energy efficiency improvements to reach the Government’s target of EPC Band C by 2035. It may therefore be considered an inefficient use of administrative and search resources to only carry out a partial retrofit at these properties and then expend further resources retargeting them further down the line.

Ideally, the most efficient solution would be to undertake a deeper retrofit, once a property has been identified through the search process, so that it reaches EPC Band C without the need for further search costs to be incurred. However, we recognise that ECO+ intends to deliver primarily single insulation measures to as many households as possible, so this may not be realistic under the scheme’s current proposed format. Hence, if a deeper retrofit now is not possible under ECO+, the NIA proposes that the Government establishes a central data repository. This would ensure that ECO+ properties which require further retrofitting in future are already stored on the Government’s database, so further search costs will not need to be wasted retargeting them.

The Government’s estimates treat floor insulation as one homogenous category with a single capital cost estimate. Yet, in reality, there are many different types of floor insulation that can vary significantly in cost. Installation costs for under floor insulation (UFI) range from £1,600 to £2,900[1], while solid floor insulation (SFI) can cost £4,000-£6,000.[2] Considering the large cost disparity between different types of floor insulation, we would urge the government to, at the very least, produce separate cost estimates for UFI and SFI.

The NIA is worried that, at present, some of the Government’s capital cost estimates are overly vague. There is a genuine danger that a lack of detail on capital costs will detract from the efficacy of the scheme and prevent the Government from delivering energy efficiency improvements to as many households as possible.

Installation costs are often pushed up by additional costs, such as travel costs. Installers will be expected to carry out surveys and installations at properties in different geographical locations across the country. The travel and additional costs associated with reaching a high number of geographically disparate households will inflate capital costs significantly. These additional costs need to be accounted for somewhere in the modelling, otherwise there is a risk that theoretical capital costs may underestimate the total cost of carrying out an installation in practice.

In the consultation document the government mentions that there are 3.8 million households with easy-to-treat standard cavities in the UK and 1.3 million with hard-to-treat cavities However, the capital cost of installing cavity wall insulation (CWI) I in those so-called “hard-to-treat” cavities will likely vary widely depending on the specific characteristics of those individual cavities. There are numerous reasons why a cavity may be classified as hard-to-treat, ranging from having a narrow cavity to experiencing high exposure to wind and rain.

Therefore, we think it is overly simplistic to group all hard-to-treat cavities into a single “high-cost” group and assign them the same estimated capital costs, especially considering there is a huge disparity in the Government’s capital cost estimates for low and high-cost cavity walls. In reality, the “high-cost” group is far from homogenous and contains many different cavities that will have significantly different costs associated with installing CWI. For example, some cavities are still classified as hard to treat, but do not incur particularly high installation costs. For these cavities, the capital cost estimates given in Table 4 do not provide an accurate representation of their potential cost. The capital costs of CWI installations cover a broad spectrum. Hence, we do not agree with separating cavity walls into two disparate groups with widely varying cost estimates.

Chapter 2: Homes and Household Eligibility (p 23 – 36)

The NIA has been calling for a scheme that helps households in the able-to-pay sector install insulation measures for some time. As such, the proposal in the ECO+ consultation that up to 80% of the scheme’s targets will be aimed at the general eligibility group is extremely welcome. The able-to-pay sector makes up 87%[3] of all households (social and private). Many in this sector are struggling to pay their energy bills because of recent energy price rises (up to 141%, as outlined in our response to Q3.) Therefore, the support offered to this sector through ECO+ is very welcome and urgently needed to prevent more able-to-pay households falling into fuel poverty.

The NIA recognise the scheme as being a good start to support the able to pay sector, however, the industry would like to see a wider eligibility pool and a deeper retrofit offered. This would provide wider benefits to both households, and in reaching net zero targets.

Recipients of non-means tested benefits are some of the most vulnerable people in society. Many have health conditions that make them particularly at risk to living in cold, damp homes. Thus, we strongly encourage the Government to consider including non-means tested benefits in the eligibility criteria for the general group.

This would increase the pool of eligible households for ECO+ and enable the scheme to reach more of those who are most vulnerable to cold conditions.

However, if the remaining obligation is flexible and can be delivered to either group, then it means that there is no requirement to deliver measures to households in the general group. Therefore, the NIA believes that there needs to be an alternative solution for general group households to access funding where they are not able to pay the full upfront cost of measures themselves.

We are pleased to see that higher-cost insulation measures, such as soldi wall insulation (SWI), are being offered to private rented households. Solid wall insulation (SWI) is vital in the PRS sector, as only 9% of solid wall PRS properties have SWI.[4] Therefore, we welcome the Government’s commitment to delivering higher-cost measures such as SWI to the private rented sector.

Nevertheless, we would also like to see low-cost measures, like loft and cavity wall insulation offered alongside higher-cost measures as part of the same package. This is the best way of ensuring that each property treated in ECO+ receives the most suitable insulation measures for that particular property. Not including loft and cavity wall insulation for PRS households would restrict the number of eligible insulation measures for this group. This would leave PRS properties where loft or cavity wall insulation are the most suitable measures with very few options and risk excluding them from receiving help through ECO+.

Nonetheless, we agree in principle with the idea of Innovation Measures (IMs), as it provides an incentive for innovation in the Low Carbon sector. Therefore, we believe that more properties should be eligible for IMs, including EPC Band C properties that meet the MEES but still have room for further energy efficiency improvements.

Whilst we recognise that HUG is available for homes in England, many ECO+ eligible households will not be eligible for HUG funding. The NIA believe that by not applying a 35% rural uplift in England, the Government is placing a massive over-reliance on HUG as one of the sole mechanisms to alleviate fuel poverty in rural, off gas grid homes. This is particularly true because the eligibility criteria for ECO+ are markedly different to that of HUG, so there is limited overlap between the two funding streams.

HUG is targeted at low-income households. However, up to 80% of households targeted by ECO+ are set to come from the general eligibility group, not the low-income group. Thus, the majority of the general eligibility group will not be eligible for HUG funding. A 35% uplift is needed for these properties that cannot access HUG funding because of the scheme’s low-income eligibility criteria.

If the government does not include a 35% uplift for HUG, it risks unfairly penalising rural, off grid homes in the general eligibility group. As well as being remote and hard to reach, these properties are often hard to treat. Therefore, installation costs can be significantly higher when dealing with rural properties. It is essential that ECO+ includes a 35% rural uplift to help cover the additional costs of dealing with rural properties. Without this uplift, we are concerned that there will be a critical shortfall in ECO+ funding for rural properties in the general eligibility group.

With the current proposal to only apply an uplift to properties in Scotland and Wales, there is also a chance that installers may target households in Scotland and Wales at the expense of properties in England. Fuel poverty rates are higher in England than those in Wales, so it is essential rural English properties do not miss out on crucial energy efficiency upgrades.

Since HUG funding is allocated directly to LAs, most HUG properties are council-identified, meaning some properties are missed out. Including an uplift for England would allow for more installer and supplier-identified properties, so fewer properties would be missed.

The additional costs associated with installing insulation in rural properties is not limited to higher-cost measures, so the rural uplift shouldn’t be either.

Installing insulation on two neighbouring properties is particularly practical, especially if they are semi-detached or terraced, and there are also benefits of installing measures to properties on same street; reduced costs of scaffolding, reduced installer travel and potential for reduced design and specification costs if the properties are of the same archetype. That said, there are also technical reasons why improving next door properties is a good idea, as there are technical risks associated with only selecting certain properties for retrofit of insulation; these risks can however be avoided with a thorough risk assessment.

ECO+ is a scheme that intends to support vulnerable low-income households and those towards the lower end of the able-to-pay sector. Therefore, the NIA still believes there should be a limit on in-fill to ensure that support is focused towards those who need it the most to upgrade the energy efficiency of their home and reduce their energy bills. However, we do think there is potential to increase the in-fill ratio in certain situations where it makes most sense and is most practicable to do so. Since ECO+ is targeted at a much broader set of households than ECO4, there is less risk that such a policy would detract from the scheme’s fuel poverty objectives.

It makes sense for low-income households to receive support for energy efficiency measures primarily through ECO4 and the NIA recognise that ECO+ funding will have little benefit to those receiving funding through ECO4 as this will provide a deeper retrofit and a higher level of funding.

In terms of the low-income group, ECO+ should primarily be used to target properties that either do not meet the ECO4 MR or require a top-up measure after they have already received a deeper retrofit under ECO4.

For energy inefficient homes that cannot meet the ECO4 MR for whatever reason, ECO+ should represent a useful alternative avenue to receive support. For homes that did not meet the MR of ECO4, ECO+ should provide an excellent fallback option, ensuring that they are still able to access some funding to help install insulation measures.

However, we would like the target extended to cover EPC band D properties as well. EPC D homes still fall below the Government’s band C target, and may still benefit from energy efficiency improvements. For low-income households, consumers will often not be able to meet the costs of these improvements themselves. Therefore, we believe that low-income band D households should still be eligible for ECO+ funding, if they do not meet the ECO4 MR. Otherwise, low-income band D properties may be neglected by government support to improve the energy efficiency of their homes.

• These properties may still benefit from energy efficiency measures, with potential to increase the rating to a C or above. If these properties received support via ECO+ and they didn’t attain this band, the property would benefit if it was eligible for ECO4 funding.
• This proposal appears to contradict the consultation’s earlier proposal to allow blending of measures between ECO+ and ECO4, as long as ECO4 measures are ‘installed either before or after any ECO+ measures’.
• We believe there should be an opportunity to top up measures carried out from ECO+ using ECO4 funding. Failing to allow this could lead to some properties only being partially improved and would go against the fundamental principle of supporting single, deep retrofits to properties.
• We recognise that it is likely that most properties receiving support through ECO4 may not require additional measures. However, we recognise that there will be some cases, and so the consultation should not go ahead with this proposal.

Chapter 3: Eligible Measures (p. 37-42)

The ECO+ impact assessment estimates that only 40% of houses targeted by the scheme will be upgraded to the Government’s target of Band C by 2035. This means that 60% of homes participating in ECO+ will be left requiring further energy efficiency upgrades to meet EPC C, after ECO+ measures have been installed.

It is essential that the UK upgrades the energy efficiency of its homes, which are currently some of the least energy efficient in Europe.[6] By offering single insulation measures and not setting minimum improvement requirements, ECO+ risks leaving the urgent job of upgrading the energy efficiency of the UK’s housing stock unfinished. The NIA would urge the government to consider a deeper, multi-measure retrofit to ensure that the properties targeted by the scheme are sufficiently future proofed for a Net Zero future.

The effectiveness of other insulation and energy efficiency measures is drastically reduced if a property does not have adequate draught proofing. The primary aim of the ECO+ scheme is to save a large number of households money on their energy bills through the installation of insulation measures. However, there is little point in cavity wall and loft insulation if all the property’s heat escapes through draughty windows and doors. Draught proofing is often the first area of concern for many of the vulnerable households our members engage with on the ground.

For a significant number of UK properties, building regulations mean they are not able to benefit from many energy efficiency improvements. This is particularly true for leasehold flats and listed homes. For many of these properties, draught proofing is one of the only options available to them if they want to lower their energy bills and make their home warmer.

Therefore, we would like to see draught proofing included as a low-cost, high impact measure that can be installed alongside other low-cost measures, as without adequate draught proofing, the financial and environmental benefits of these other measures is greatly reduced.

We understand why the limit of a single insulation measures applies to low-income households eligible for ECO4 funding, as they can receive a deeper, multi-measure retrofit through the ECO4 scheme. However, for the general eligibility group that cannot access multi-measure funding in other schemes, this encourages a piecemeal approach to retrofitting, which is not as effective as a multi-measure whole house approach.

Therefore, while we understand that the primary aim of the scheme is to help deliver bills savings to a larger number of households, we do not agree with limiting support to a single insulation measure per property. The consultation document gives the example of a property with both cavity and solid walls. In this scenario, it would not be possible to deal with both types of walls through ECO+. This seems like an inefficient use of funding and an illogical approach to the retrofit process.

Many properties facing the worst fuel poverty are hard-to-treat properties, often with solid walls. According to the latest English Housing Survey statistics, 70% of dwellings with predominantly cavity walls have insulation installed compared with only 12% of dwellings with predominantly solid walls.[7] Therefore, the NIA does not believe the scheme’s focus on delivering primarily single CWI and loft insulation measures is the most effective way of targeting the homes that need energy efficiency upgrades the most. This approach will do little to help some of the most fuel-poor solid wall homes, which are some of the least energy efficient properties in the housing stock.

While we understand that the proposal to offer only single insulation measures is to reach as many households using the funding available, the NIA believe that it should be possible to deliver different low-cost measures to the same household as part of one energy efficiency package. For instance, in the case of an easy-to-treat cavity wall property with an uninsulated loft, we believe it should be possible to combine CWI, loft insulation and draught proofing. These are all low-cost measures, and a package that combined them all would still be significantly cheaper than installing a single higher-cost measure. Therefore, we do not agree with only offering single insulation measures in situation where multiple low-cost measures could still be delivered at a low combined cost.

Low-cost measures like CWI and draught proofing are far more effective at reducing bills and increasing energy efficiency when installed as part of the same package, rather individually. There is little point in installing CWI if there is no draught proofing to accompany it because the property will still lose all its heat through the doors and windows. Hence, the NIA would like to see a multi-measure package of low-cost measures offered in situations where it is possible to install multiple low-cost measures at a reasonable price, and where those measures will interact to significantly reduce energy bills.

• Consumers in the general eligibility may be able and willing to contribute towards part of the cost. However, we would like to see more detailed proposals from the Government on how the consumer contribution component of the scheme will work.
• The level of contribution consumers in the general eligibility group will differ markedly between individuals. It may encourage consumers to contribute if they’re made aware of the benefits to upgrading their energy efficiency.
• There may be a danger with the contribution if customers aren’t able to afford to contribute to a deeper retrofit and instead opt for lower-cost measures. We would support the contribution being linked to some form of means-testing, whereby consumers with a greater capacity to contribute towards measures make a higher contribution which may overcome this.

This should be linked to an information campaign, as consumers are far more likely to agree to a contribution once the financial and other benefits of receiving insulation have been explained to them. This would increase uptake of measures and the level of consumer contribution.

Chapter 4: Scoring (p. 43-46)

• ECO+ is primarily delivering single insulation measures and therefore makes for the scoring framework to be based on partial project scores (PPS).
• PPS reduces the potential of delays in payment to installers, which can be very damaging for the industry as a whole. Under the Green Homes Grant in England, some installation companies reported having to lay off staff because of delays in payments[8].
• The use of PPSs in ECO+ scoring should lower the risk for supply chain compared to other schemes.
• However, we would like to see more of a focus on deeper, multi-measure retrofits, as this is the most effective way to improve the energy efficiency of a property.
• In cases where multiple measures are installed, or if an ECO+ measure is installed at the same property in conjunction with ECO4 measures, then we believe that a full project score (FPS) and post-installation RdSAP and EPC assessment should be required. This would account for the interaction of all the measures installed at the property under both the schemes.

The NIA believes that implementing further trigger points for EPC assessment is vital if the Government is to meet its own target of upgrading all homes to EPC C by 2035. Therefore, the proposal to not require an EPC assessment post ECO+ measures being installed represents a missed opportunity to produce an up-to-date and accurate EPC for properties. Having up-to-date EPCs is essential if the Government is to meet its energy efficiency targets, so it seems very remiss not to require an EPC or RdSAP assessment after ECO+ measures have been installed.

Furthermore, measures installed under ECO+ would increase a property’s SAP score and potentially EPC Band. Therefore, if an EPC or RdSAP assessment is not carried out post-installation, then the registered EPC of the affected property may be obsolete and inaccurate.

Chapter 5: Delivery and Administration (p. 47-51)

Chapter 6: Quality and Standards (p. 52-57)

NIA members adhere to best practice guidelines and advocate for all relevant industry standards to be followed. Hence, we agree with the Government’s proposal on ECO+ guarantees. This will ensure that works carried out under the scheme meet the highest quality standards and are in line with industry best practice. It will also protect consumers from the risk of poor quality installs.

As a universally-recognised quality mark, PAS2030/2035 is an industry-led quality standard that provides best practice for retrofit, taking a whole house approach. This provides customers with confidence in the work being carried out, and also prevents poor delivery of measures and costly damage to properties. This standard was brought in for all Government-funded schemes after the Each Homes Counts review, which highlighted how damaging poor quality installations and customer service was on scale.

The industry has (somewhat reluctantly at first) got behind this standard and driven the required improvements in performances and processes, and is now adhering to these standards. This is critical to help roll out necessary measures at scale, particularly in the able to pay sector. Introducing a lower standard into any aspect of retrofit delivery may be considered a step backwards and may risk the quality of delivery.

PAS 2030/35 puts whole house retrofit at its heart and sets out a clear platform for sensible, logical retrofit. This means that a proper assessment and design of the property must take place even for single measures, with strict installation standards and evaluation. The roles of the Retrofit, assessor, designer and coordinator are fundamental to ensuring the customer and their property are put at the heart of the process.

The NIA argue that License Plus may fundamentally undermine this if it does not include for the basic of designs, assessment, medium term plan etc. It could risk a property from being correctly retrofitted if, for example, a design hasn’t been completed. The NIA advocate for high quality processes and standards, and believe that an assessment and a design should be completed on every property by a qualified person(s) as outlined in PAS 2030/35 for all installs. This ensures measures take place in the correct order and a plan is in place for when the next steps are taken on that property in the future.

The NIA believe that introducing the TrustMark Licence Plus scheme may cause confusion amongst installers and customers and convolute what standard should be used for home energy improvement. This will be particularly true for those who have no understanding of the differences between the schemes and consider the Trustmark badge as being sufficient for any measure. It could also lead less unscrupulous installer companies to mislead customers.  The NIA would like to understand how Trustmark oversee a two-tier system, and how they can explain to customers that some are receiving a higher level of quality standard than others.

The NIA advocate that PAS2030/2035 is a helpful and beneficial standard for the reasons mentioned above, and encourage government to deliver all measures under ECO+ using this mechanism. We strongly support PAS2030/35 in delivering retrofit to reduce the risk of poor installations and confusion amongst customers. The NIA suggest that it is important for the PAS steering group to continue its work to alter the pathways within the standard to make it more efficient to install the so called ‘low risk’ measures’.

It is the NIA’s contention that PAS2030/35 be followed to reduce risk in diluting quality and customer service, particularly in recognition of industry’s hard fought efforts to move forward and adapt, working to PAS 2030/35 with excellent results.

The PAS steering group should be encouraged to continue their excellent work within the current PAS review to look at how changes can be made to enable ‘low risk measures’ to be installed more cost effectively within the envelope of the PAS 2030/35 standard.

Perhaps one of the most effective ways to reduce competition between different schemes for the supply chain is by offering higher levels of training provision and financial support for industry. This will ensure that the supply chain has the capacity to participate in a number of retrofit schemes at the same time.

For retrofit coordinator training, we have previously reported a lack of training provision. Whilst there does appear to be increasing numbers of providers delivering the Level 5 Diploma in Domestic Retrofit Coordination and Risk Management, there is a need to continue to build this offering to ensure training provision is able to meet rising demand.

Chapter 7: Territorial Extent (p. 58-59)

Chapter 8: ECO4 Amendments (p. 60-64)