EPC or Energy Reports? Elmhurst seeks clarification within ECO4 Administration

Confusion is the word we would currently use to describe the inception of ECO4. The government announced back in April that the industry funded ECO4 scheme was to be delayed until July 2022. Due to this, an ‘ECO3 interim delivery’ period was established so that measures could continue to be installed under the ECO3 scheme until ECO4 was ready.

We are now mid-way through July, the ECO3 interim delivery period has expired (30th June 2022), and the industry continues to wait on official word that ECO4 has been rubber stamped and put into legislation. In other words, we are in limbo.

However, whilst we wait, Ofgem who are administering the ECO scheme on behalf of government, have been collecting responses to part 2 of their consultation, which dives deeper into how ECO4 will actually be administered.

The ‘Ofgem ECO4 Administration Consultation Part 2’ builds on Part 1 of the consultation, released in November 2021, which looked at defining domestic premises, and evidence requirements for ECO4. Part 2 of the consultation proposes changes between ECO3 and ECO4, which includes eligibility, measures, minimum standards, and project scoring.

Overall Elmhurst welcomes the release of the consultation, which reinforces the opportunity that could be available for domestic energy and retrofit professionals in this sector. Yet, the proposals put forward by Ofgem within this consultation may present some risks moving forward.

You can read Elmhurst's full consultation response here.

The Energy Report may not be suitable

Within the government’s official response to the ECO4 consultation back in April, it was agreed that the ECO4 scoring methodology would be based on the difference in average annual bill expenditure between the starting and finishing SAP rating of the property.

This new scoring methodology would be evidenced via a pre and post installation assessment, and they would both need to be in the same format e.g. SAP and SAP, or RdSAP and RdSAP.

Ofgem currently propose that an Energy Report is used as an output for the assessment, instead of an Energy Performance Certificate (EPC). However, Elmhurst strongly opposes this decision, and recommends that an EPC, and not an Energy Report, should be used to evidence improvements.

Elmhurst’s Retrofit Team Leader, Simon Flint, comments: “EPCs already have robust quality controls in place, due in part to the quality assurance activities undertaken by government approved accreditation schemes. Energy Reports, on the other hand, are not considered a legally valid replacement to the EPC; they are not lodged to a central register and they are not audited in the same manner. The lack of ‘smart audit’ control in this area, could leave the process susceptible to fraud. Elmhurst believes that an EPC should be required at both stages to protect the process regardless of the improvement measure”.

Elmhurst’s Managing Director, Stuart Fairlie, offers his final thoughts following Elmhurst’s response to the consultation:

We are pleased to see that measures delivered under ECO4 will continue to be subject to the latest standards and associated processes outlined within PAS 2035. The introduction of new minimum requirements and the need for pre and post RdSAP assessment also spells good news for energy and retrofit professionals.

However, as Simon has mentioned already, Ofgem should not overlook the EPC when it comes to evidencing the pre and post SAP rating. Elmhurst also has some ongoing concerns over the timeframe for ECO4 delivery, with no word yet as to when industry can start moving with it. Bizarrely, Ofgem confirms within the consultation document, that an outcome is not anticipated until the end of August, which is after ECO4 is proposed to begin. It’s all a bit confusing at the moment, but we will be keeping our ear close to the ground”

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