Thousands of households have faulty insulation. Here’s how it happened
Britain’s flagship home insulation program has received a damning verdict from the National Audit Office. Tens of thousands of households have been left with faulty and even dangerous installations under the Energy Company Obligation (ECO) scheme. Auditors say this is a result of poor oversight, weak skills and complex accountability.
This report is disturbing not only because of the human cost, but also because it reveals a deeper failure of governance in the UK’s efforts to decarbonise home heating. This is a complex task that requires long-term management but is instead left to the market.
ECO is designed to enable energy suppliers to help households reduce emissions and bills. Suppliers are companies that buy electricity or gas from generators and sell them to you; The company mentioned on your invoices is your supplier. In theory, ECO means these suppliers meet government-set carbon or energy savings targets by financing insulation and heating improvements for homes, and with regulators checking whether installations are compliant.
ECO was preceded by two other programs that worked on the same principle. For years they worked quite well for simple, low-cost measures such as attic or cavity wall insulation. However, in 2013 ECO was introduced and expanded to cover more complex and expensive retrofits such as solid wall insulation; An unprecedented change.
So what went wrong?
The latest findings from the National Audit Office confirm fears that this is an approach set up to fail. Many installations require major remediation, and some pose immediate health risks. The problems are familiar: unskilled labor, uncertified installers, weak regulation and enforcement.
These problems can be solved individually. The government can improve installer training, tighten controls and crack down on fraud. But taken together, they reveal a deeper problem: the mistaken belief that market-based tools can deliver fundamental change.
Energy efficiency obligations such as ECO work for standardized, low-risk actions such as changing light bulbs or upgrading boilers. But, as we warned in 2012, these are less suitable for complex, capital-intensive renovations of millions of households that require a lot of coordination and long-term financing.
The UK’s energy efficiency governance still eludes the realities of people’s homes. Responsibilities are confusingly divided between suppliers, Whitehall departments, auditors and local authorities, and it often seems as if no one is really responsible.
So the failures highlighted in the National Audit Office report are not just due to implementation glitches or some “bad apple” installers. These are failures of a governance model designed for incremental change, not the transformation required for net zero.
German lessons
If the UK really wants to renovate millions of homes, it should look at what’s working in other countries. Germany’s long-running KfW loan program is an example. It has been supporting high-performance renovations through low-interest loans and grants for more than three decades. Successive German governments have realized that the returns in employment, tax revenues, economic incentives consistently exceed the up-front costs.
In response, ECO has been restructured repeatedly, with changing goals and funding levels making it difficult to plan ahead. Treating home renovation as a short-term obligation rather than a long-term national project has left the UK far behind its peers.
About the authors
Ewan Archer-Brown is a DPhil Candidate in Geography and Environment at the University of Oxford.
Brenda Boardman is Emeritus Research Fellow in Energy at the University of Oxford.
Jan Rosenow is Energy Program Leader at the Environmental Change Institute at the University of Oxford.
This article is republished from The Conversation under a Creative Commons license. Read original article.
Home renovations are local in nature (you can’t pick up your home and move it to a different area). Local governments must therefore play a much stronger role in coordinating delivery, strengthening quality and linking improvement to other social goals, such as tackling fuel poverty.
The involvement of councils will align retrofitting efforts with local priorities rather than distant central government objectives. This could also rebuild trust among people who are understandably wary of such plans.
The UK’s upcoming warm homes scheme is a chance for a reset. The government must carefully examine the tools at our disposal and consider what is needed to develop the creative and bold policy needed to decarbonise our homes.
