Microgeneration industry workshop feedback

Transcription

1 Microgeneration industry workshop feedback September 2016 Disclaimer The Energy Saving Trust cannot accept any responsibility for the accuracy or completeness contained within this document. Any opinions expressed in this document are those of the attendees present on the day and are not necessarily the views of the Energy Saving Trust or the Scottish Government. Summary The Energy Saving Trust organised a workshop in June 2016 in partnership with Scottish Renewables to identify what the key barriers are facing the microgeneration industry in Scotland. Eleven people attended the workshop which included MCS installers, manufacturers, distributors and trade bodies. The key barriers identified at the workshop were (by theme): Consumer confidence and demand 1. The inaccuracy of some performance estimates given to householders by installers is an issue for the industry. This is particularly true for heat pumps and biomass. 2. More needs to be done to improve the in-situ performance of renewable technologies due to poor design/installation. This is particularly relevant for heat pumps. 3. There is a lack of awareness amongst householders in relation to renewables and the associated benefits. Finance 4. The Home Energy Scotland renewables loans are not high enough (in terms of percentage contributions) and solar PV maximum value is not high enough. 5. The payment structure for RHI is not flexible enough as there is currently no option available to front load RHI payments for householders. 6. Wider communications between EST and industry would be helpful in relation to scheme changes and rules (where EST administers funding). Compliance 7. In certain circumstances building regulations are holding back the industry (warrant timescales and untapped potential for renewables on new build). 8. There is a lack of MCS enforcement on the ground. 9. MCS Quality Management Systems (QMS) requirements are regarded by some as too onerous for micro-sized companies. 10. Grid capacity - cost and access is an issue.

2 In terms of overcoming these barriers, the following recommendations have been made by those attending the workshop. Recommendations Consumer confidence and demand 1. MCS to provide a standardised approach/template for installers to ensure householders are given consistent information. 2. EST to review and where relevant update information and advice given to householders in relation to performance estimates. 3. The Scottish Government may want to get assurances from DECC and /or MCS that they are taking reasonable steps to improve the performance of renewable heat technologies. 4. EST to discuss with the Scottish Government further ways in which to promote the benefits of installing renewables to householders. Relates to barrier # 1 1,2 2 3 Finance 5. EST to review the loan scheme support levels with Scottish Government. 6. EST to allow stakeholders who are not installers to be added to the Home Energy Scotland renewables loan scheme distribution list if requested. 4 6 Compliance 7. The Scottish Government through its powers over building control may want to consider shortening the timescales for obtaining a warrant in relation to biomass boilers (and other technologies if deemed necessary). 8. The Scottish Government through its powers over building control may also want to consider incorporating the latest building regulation energy efficiency requirements into any amendments when a building warrant comes up for renewal after 3 years. 9. MCS should audit installers more whilst ensuring greater enforcement of the scheme. MCS should also publish a timetable outlining the steps it is taking to address this (for example when it plans to appoint an independent company to carry out audits and verification). 10. Government, industry, EST and MCS should encourage key stakeholders to get involved with MCS working groups, particularly those representing consumer interests page 2 of 11

3 11. MCS should review and adapt if necessary QMS requirements to make it more relevant to micro-sized businesses. 12. Scottish Government and industry to continue to work with Ofgem, DECC, DNOs and National Grid to consider addressing the issues raised by industry, particularly in relation to grid capacity and cost Introduction As part of the Sustainable Energy Supply Chain programme delivered on behalf of the Scottish Government, the Energy Saving Trust organised a workshop for the microgeneration industry in partnership with Scottish Renewables to get their feedback on the key barriers facing the microgeneration industry in Scotland. The key aim of the workshop was to capture what the barriers were and to come up with recommendations for overcoming them and share this feedback with the Scottish Government. The workshop was held on 23 June 2016 at Scottish Renewables offices in Glasgow with 11 people 1 attending the workshop. The full list of attendees can be found below. The programme for the day can be found in appendix 1. Company First Name Surname Organisation type Daikin UK David Morrison Manufacturer EST Anthony Kyriakides Social enterprise EST Ian Cuthbert Social enterprise Heattech Ltd Russell Gibb MCS installer, distributor, consultant Inksters Angus Mackay Solicitors MCS Kunal Sharma Other nextgenergy Shirley Paterson Consultant Pellets 2 Heat Tristan Compton MCS installer RECC Colin Meek Other Scottish Stephanie Clark Trade body Renewables Solar Kingdom Ltd Peter Randall MCS installer, consultant Table 1: microgeneration industry workshop attendees Workshop format The workshop commenced with a round table introduction where everyone was asked to state the most important barrier facing the microgeneration industry in Scotland. This was to ensure that the topics for discussion that followed reflected the barriers. Barriers stated included: issues with performance estimates of technologies, a general lack of education amongst householders, poor sales practices by 1 There were 22 registered to attend with a number of apologies sent which was partly due to the rail strike. page 3 of 11

4 rogue companies and lack of financial support. After a short update from the Solar Trade Association, there were four sessions held covering the following topics for discussion: Policy, planning and grid connection facilitated by Stephanie Clark. Skills, training and certification facilitated by Ian Cuthbert with updates provided by Kunal Sharma from MCS. Householder advice and marketing facilitated by Ian Cuthbert with updates provided by Anthony Kyriakides on householder advice and Colin Meek on industry performance estimates. Other topics (to capture anything that did not fit in with topics above and ensure all issues were captured and discussed) - facilitated by Ian Cuthbert. Notes were taken during each session to assess what the key barriers for each topic were along with recommendations for overcoming them. Towards the end of the workshop the top barriers considered to be of most relevance were listed on a board. There were 10 in total and everyone agreed that these barriers were a true reflection of what was discussed during the workshop. Workshop results barriers and recommendations Below is a list of the 10 barriers identified during the workshop organised by one of three themes (consumer confidence and demand, finance and compliance) along with recommendations for overcoming them. Consumer confidence and demand 1. The inaccuracy of some performance estimates given to householders by installers is an issue for the industry. This is particularly true for heat pumps and biomass. Issue RECC presented evidence (based on RECC audits and research) that many MCS installers are providing incorrect performance estimates (either by mistake or potentially deliberately) and therefore not meeting the MCS and RECC standards. This is thought to be a particular issue amongst a number of installers in central Scotland as well as in some other parts of the UK. Overestimated savings and income may lead to significant customer dissatisfaction with their system. It is also an issue for installers as pre-contract performances estimates form contractual terms and therefore householders could seek legal redress from their installers. This may erode market confidence and have a significant impact on the industry as a whole. RECC have raised their concerns directly with MCS and are exploring how to improve the situation via MCS standards for example and the MCS certification bodies who carry out audits. As well as improved installer practice, householder advice could also play a role in helping to address this issue. For example, consumer guidance could be updated to further highlight the importance of performance estimates, what information householders should look for and how to interpret it. Recommendation there should be an updated MCS approach/template for how installers should provide performance estimates and this is something the relevant MCS working groups are looking at now. However, the timeframe for introduction is not yet clear and may take some time. In addition, page 4 of 11

5 consideration should be given to reviewing and updating (where possible) the guidance for householders on performance estimates delivered through Home Energy Scotland and the Energy Saving Trust website. This could include key questions to ask installer(s) in relation to performance estimates. 2. More need to be done to improve the in-situ performance of renewable technologies due to poor design/installation. This is particularly relevant for heat pumps. Issue concerns were raised in relation to technology performance as many MCS systems may be underperforming due to poor design and/or installation. This was thought to be particularly concerning for renewable heat technologies. For example, according to a recent study by DECC (conducted by University College London) of heat pumps supported by RHPP grants, many heat pumps are underperforming and, in some cases for heat pumps, they cannot be regarded as renewable energy systems as they don t meet the minimum EU criteria for a renewables system (Seasonal Performance Factor (SPF) of 2.5 or higher). DECC s results were similar to EST s earlier heat pump field trial results. DECC are carrying out further investigation as to the main reasons for underperformance and how performance can be improved. The underperformance of some systems has implications for householder fuel bills and satisfaction, renewable heat implementation targets, CO 2 reduction targets and consumer confidence. Ultimately it will be important to identify what is causing poor performance as this will help identify what steps need to be taken to resolve it. Recommendation given DECC s RHI consultation included questions relating to performance it may be prudent to wait until the consultation response is published as this should reveal more information about DECC s follow up work on underperforming systems and may include recommendations for addressing renewable heat performance. If not then it may be worth asking DECC and/or MCS what work is underway to address this. However, in the short term improvements could be made to consumer information and advice to help enable consumers to make better choices and comparisons. This also relates to the performance estimate barrier as mentioned previously. It was also suggested that it may be worthwhile carrying out an exercise to see how other countries ensure high performance of renewable heat technologies e.g. Sweden and Germany. 3. There is a lack of awareness amongst householders in relation to renewables and the associated benefits. Issue more needs to be done to educate and inform householders about the benefits of installing renewables. Also, given the low oil price it is proving difficult to convince householders to switch to renewables. There was also some discussion about who people listen to (friends, family, installers etc) as word of mouth is considered particularly powerful. Recommendation EST to discuss with the Scottish Government further ways in which to promote the benefits of installing renewables to householders. page 5 of 11

6 Finance 4. The Home Energy Scotland renewables loans are not high enough (in terms of percentage contributions) and solar PV maximum value is not high enough. Issue installation of domestic renewables in Scotland has slowed in recent times. Currently the Home Energy Scotland renewable loans cover up to 75% of the total cost of the renewable system (up to a maximum loan value for each technology). If this percentage was to increase to 100% then this is likely to further help deployment of domestic renewables in Scotland. Related to this, the maximum loan value for solar PV is 2,500 when support for solar water heating is 5,000. Given the large cuts in the PV FIT tariff and slow-down in deployment, putting solar PV support on parity with solar water heating may help to increase PV deployment. Furthermore, there was a feeling amongst the heat pump and biomass installers present that increasing the maximum loan value to above 10,000 may help increase uptake of these systems amongst householders in larger homes who need a more expensive system to provide sufficient heat. Feedback received after the workshop also mentioned the fact that the HEEPS: loan for a boiler is 5,000 which is more than enough to cover the capital cost in most situations. So there is a possible mismatch between the two loan schemes. There was an understanding however that higher value loans may translate into fewer systems being funded in a scenario where the loan funds are fully used up within a financial year. Concerns were also raised about the yearly loan cycle and the fact that householders thinking about installing in February or March may be put off because they can't meet the 31 March claim deadline. They may then delay a decision or work until the scheme re-opens. This creates undesirable peaks and troughs in demand. Finally, there was a broad consensus amongst attendees that the Home Energy Scotland renewables loans are vital to the microgeneration industry in Scotland and are considered to be equally, if not more important than FITs and RHI. Recommendation EST to discuss these points with the Scottish Government for their consideration. 5. The payment structure for RHI is not flexible enough as there is currently no option available to front load RHI payments for householders. Issue It was mentioned that for the Northern Irish equivalent of the RHI they would allow front-loading of payments which helped with the upfront cost of the installation. If something similar was done in Scotland it could have a positive impact on deployment rates. Recommendation this may be difficult to do particularly as DECC have already consulted on proposals for the RHI. Consequently as this relates to the up-front capital cost then it may be better focusing on the Home Energy Scotland renewables loans and/or waiting for DECC RHI consultation response. See point 4. page 6 of 11

7 6. Wider communications between EST and industry would be helpful in relation to scheme changes and rules (where EST administers funding). Issue industry stakeholders who are not installers (e.g. energy assessors) are currently not routinely informed about any changes to the Home Energy Scotland renewables loan scheme (or other related schemes) as the information is mainly sent to MCS installers. If other stakeholders were more aware of the eligibility criteria and/or any changes to the scheme then it would make their job easier when working with clients and avoid potential confusion for customers. Recommendation EST to allow stakeholders who are not installers and who want to be kept up-todate with the Home Energy Scotland renewables loan scheme to be added to the distribution list about scheme changes upon request. Compliance 7. In certain circumstances building regulations are holding back the industry (warrant timescales and untapped potential for renewables on new build). a. Issue in certain circumstances 2 a building warrant is required for installing a biomass boiler in a home. Given the timescales involved with obtaining a warrant then this can create problems for householders who are trying to lock in to a particular RHI tariff as the tariff rate may have changed by the time they receive the warrant. In some situations this could take as long as 30 weeks. b. Issue - more generally, views were also expressed that the Scottish Government should do more through the building regulations to ensure renewables feature more in new build developments. Recommendation one way to resolve the issue relating to biomass boilers and RHI would be for the Scottish Government through its powers over building control to shorten the timescales for obtaining a warrant in relation to biomass boilers (and other technologies if deemed necessary). As for encouraging more take up of renewables on new build developments then one practical way of achieving this would be to ensure that the latest energy efficiency requirements are incorporated into any amendments when a building warrant comes up for renewal after 3 years. More generally, it was also suggested that the Scottish Government may want to look at what is happening in London through the Code for Sustainable Homes. 8. There is a lack of MCS enforcement on the ground. Issue there continues to be a lack of MCS enforcement on the ground, particularly with respect to site inspections. Whilst MCS standards were acknowledged to be good, more enforcement is needed particularly in relation to the technical standards. Ideally this enforcement should be done by someone who knows the technology well. There were also concerns about certification bodies as it was thought some perform better than others. Above all there was frustration that MCS were not implementing 2 For example, if the building has three or more storeys and/or if the installation itself results in an alteration to the building (roof, external walls or elements of the building structure). Source: Scottish Government Building Standards Division guide for biomass installations. page 7 of 11

8 changes quick enough, particularly as many of the issues raised in relation to MCS in 2015 are still outstanding. In addition, it was thought that some of the MCS working groups could have better representation. Kunal Sharma from MCS did note however that MCS is moving forward this financial year with the audit and verification project where MCS is currently procuring a service provider to undertake a number of audits of installations across all technologies and across the UK that have been carried out and registered with MCS. The findings of those audits will then inform on improving the scheme in relation to enforcement. In addition, MCS is also working to implement a certification body requirements document which is intended to ensure that the certification bodies clearly understand the MCS scheme s requirements, not just in relation to routine matters but also enforcement. As for MCS working groups representation then Kunal mentioned that these groups are open to anyone to join who has the requisite knowledge of the technology and also given the voluntary nature of the groups, standards can often take longer to develop (relating to point made about the time it takes for implementing changes). It is also much more difficult for smaller companies to spare the time and send representation; hence the process for open consultation on the standards to ensure views can be considered in the round. There is however a drive for having greater consumer representation at working group meetings, through organisations such as Which?, Citizens Advice, Consumer Futures would help with clarity for consumers when they are presented with information from installers. The process in updating standards has also become more complex because of the referencing of the MCS standards by date and issue within legislation for the FITs and RHI. As a result, any changes to MCS standards also requires an update to legislation because the date and issue referencing, which ultimately can slow process. Recommendation MCS should audit installers more whilst ensuring greater enforcement of the scheme. This is thought to be particularly relevant to those installation companies who are subcontracting. As for tackling concerns about MCS being slow to implement changes then one possible way of addressing this would be for MCS to publish a plan of action with clear timescales for implementing changes to the scheme in relation to scheme audits and verification as this is currently the biggest concern. MCS may also want to consider introducing a risk based auditing system to focus on those installation companies who continue to cause problems with householders. Finally, government, industry, EST and MCS should encourage key stakeholders to get involved with MCS working groups, particularly those representing consumer interests. 9. MCS Quality Management Systems (QMS) requirements are regarded by some as too onerous for micro-sized companies. Issue given the one size fits all QMS requirement for MCS installers, this can have a negative impact on micro-sized businesses. For example sole-trader businesses are required to have quarterly meetings with themselves. Kunal Sharma from MCS reported that they are currently looking at the QMS requirements to try to make requirements clearer for companies and ensure they are set at appropriate levels for different types of businesses. page 8 of 11

9 Recommendation MCS should consider adapting the QMS requirements to make it more relevant micro-sized businesses. This is an ongoing project within the MCS 001 working group and simplification of the QMS process is something the scheme needs to ensure is done appropriately so the scheme does not lose the intended robustness within the requirements currently set out. 10. Grid capacity - cost and access is an issue. Issue grid connection is still an issue as some attendees felt that there has been a chronic underinvestment with Distribution Network Operators (DNOs) only reacting to general maintenance issues as and when required i.e. it only gets fixed/improved if it is broken. Cost is also still an issue to generators. It was also thought improvements to the grid may also be compounded by the fact that installers may not inform the DNO of a renewable system and consequently DNOs may have a limited understanding of what systems are actually connected to the grid. Recommendation Scottish Government and industry to continue to work with Ofgem, DECC, DNOs and National Grid to consider addressing the issues raised by industry, particularly in relation to grid capacity and cost. Other considerations In addition to the key barriers identified on the day other feedback given (both on the day and subsequently) include: Something needs to be done about reducing the electricity costs in the north of Scotland as they are typically higher than the rest of Scotland. The customer journey and the care and support householders receive for installing renewables is of paramount importance. page 9 of 11

10 Conclusions An important conclusion from the workshop was that all of the attendees were keen to ensure there are adequate measures in place to help protect consumers from rogue companies. This is of interest to them as rogue companies can give industry as a whole a bad reputation which in turn erodes consumer confidence which can affect all businesses. The lack of MCS enforcement on the ground and consumers not being given accurate information from MCS companies at the pre-contract stage were both considered major concerns for the industry, particularly in relation to renewable heat. Whilst MCS will be the organisation expected to address these issues, there is support for EST to continue to ensure consumers are given adequate advice and information in relation to consumer protection. The Home Energy Scotland renewables loan scheme was viewed very positively by those representing industry and it was considered a key element of support for both householders and the industry in general in Scotland. However, there were some suggestions that the loan could be changed, particularly as there appeared to be a disparity between these loans and the HEEPS: loans in terms of percentage contributions. There was also much discussion in relation to the Building Regulations in Scotland and how these regulations could be used more effectively to drive energy efficiency and renewables in Scotland. Local authorities insisting on compliance with the latest energy efficiency requirements when building warrants come up for renewal (assuming regulations have changed in that time period) was thought to be a good way to encourage greater deployment of renewables. However, how practical this is remains to be seen so further analysis and consultation with industry may be required. Finally, the feedback from the attendees on the day was very positive as they appreciated being given the opportunity to provide feedback. They also stated that they would also have liked more time (it was half a day) so this is something that will be factored in to any future workshops. page 10 of 11

11 Appendix 1 workshop programme Microgeneration industry focus group Thursday 23 June Scottish Renewables, 6th floor, Tara House, 46 Bath Street, Glasgow, G2 1HG PROGRAMME 09:30 10:00 Registration, tea/coffee 10:00 10:10 Welcome and introductions 10:10 10:30 Update and discussion on report from 2015 workshop 10:30 10:45 Solar Trade Association key asks of the Scottish Government 10:45 11:45 SESSION 1 a. Policy, planning and grid connection b. Skills, training and certification 11:45 12:00 Comfort break/tea and coffee 12:00 13:00 SESSION 2 a. Householder advice and marketing b. Additional topics raised for discussion not already identified 13:00 Next steps 13:15 Lunch page 11 of 11