Non-green deal providers could be excluded from ebay-style bid system
Landlords fight to access green subsidy brokerage
Social landlords are fighting to ensure they are not excluded from accessing a brokerage system that will distribute millions of pounds of vital green subsidy funding.
The government plans to introduce an ‘ebay-style’ brokerage mechanism in October to ensure participants in its flagship energy efficiency scheme, the green deal, have fair and transparent access to the £1.3 billion a year energy company obligation (see box: Energy company obligation: in numbers).
However, it has emerged the government is proposing that organisations which are not accredited green deal providers – companies which take on the financing risk of delivering the scheme – may not be able to access the brokerage.
Housing bodies have warned this could exclude social landlords that do not plan to take the risk of becoming green deal providers but want to participate in the green deal.
The National Housing Federation is arguing with the Department of Energy and Climate Change that social landlords should not have to be accredited because they are well regulated and have strong track records of working with energy companies. It is also argued that because social tenants contribute towards ECO through their energy bills, they should benefit fairly and fully from the subsidy.
ECO funding is taken from people’s energy bills and spent on achieving carbon savings by energy companies. It is to be used to subsidise the government’s green deal in which households will receive loans from green deal providers to carry out energy efficiency works that can then be repaid through resulting savings.
Around half of the £1.3 billion a year of ECO could be allocated through the brokerage mechanism on a ‘blind’ basis, meaning energy companies cannot see which organisations are bidding for the subsidy.
This is to ensure a level playing field, preventing energy companies imposing onerous terms on how ECO is spent – as they have with similar subsidies in the past.
Martin Wheatley, a consultant acting for the NHF, said: ‘Any market needs turnover to flourish. If you exclude people unnecessarily then you reduce the volume of people and the liquidity – so why would you do that?’
Abigail Burridge, senior policy officer at the Local Government Association, said: ‘We think councils and social housing providers are subject to a lot of scrutiny already and have a long history of working with energy companies. It should be kept flexible.’ A consultation on the proposals is expected next month.
A DECC spokesperson said: ‘It is not a settled issue. We haven’t yet decided what the make-up will be, and we haven’t ruled anything out.’
|Energy company obligation: in numbers|
|£1.3 billion||size of the energy company obligation each year|
|50 per cent||approximate portion of ECO that could be allocated through a brokerage system|
|£350 million||amount of affordable warmth fuel poverty ECO landlords are already excluded from|
|3||social landlords that have committed to becoming green deal providers*|
|2||the number of months before the green deal is launched|
|14 million||number of homes the government hopes will be retrofitted through the green deal|
|Source: Department of Energy and Climate Change, *Inside Housing|