By Steven Heath; Director – Public Affairs and Strategy (Knauf Insulation Northern Europe)
Effective policy making is difficult! Without a detailed understanding of the complex system you wish to change, it’s impossible! Efforts by successive Governments to persuade us to improve our inefficient housing stock offer a good example. Despite numerous civil servant hours spent, expert opinions offered and a plethora of policies and initiatives, we haven’t cracked the nut. And by ‘nut’ I mean persuaded a decent number of the 60 million people in 27 million homes to act on energy efficiency.
Yes, we have insulated lofts, filled wall cavities and scrapped old boilers. We have insulated a few solid wall properties and installed some heat pumps. Smart meters may already be here! After a couple of internet searches for smart meters, the Google owned NEST learning thermostat now appears on almost every internet page I open. More worryingly, it has appeared twice on electronic bill boards just as I pass by. But this isn’t cracking the energy efficiency nut.
The challenge policy makers have been set is to create a shift in our approach to heating our homes. The current goal of a home heating system – walls and roof, boiler and radiators – is simple; allow the occupant to maintain a comfortable inside temperature despite falling outside temperatures. Various imperatives, not least Climate Change, have meant that goal must change. Yes, by all means achieve that thermal comfort, but with less energy and with ideally lower levels of CO2 intensity in the fuel!
A suite of policies exist to help this change. Minimum efficiency standards for newly installed gas boilers and the Renewable Heat Incentive address heat inflow to a home, the Green Deal and Energy Company Obligation are designed to address heat outflow from walls, windows and doors. Smart meters and heating controls may allow us to make better choices about when we heat our homes and even what rooms we heat.
But has the supply chain brought all of these disparate policies together into a coherent offering to the householder? Or is it still single measure led – boilers or insulation? Or perhaps single scheme led – FITs, ECO or RHI? I’d suggest so.
So what are the lessons for those writing manifestos or, perhaps more importantly, those with ambitions to see their manifesto commitments on energy efficiency actually delivered?
Firstly, let’s forget about specific policy recommendations as I’d be setting myself up as the self-declared ‘expert’ (although I do have a few). Policy makers must accept that if they are serious about achieving the ‘goal shift’ in the home heating system at scale they can’t continue to focus on the number of insulation or heat pump installs at a scheme level. Or even worse, the number of assessments that have taken place!
Rather, at a particular trigger point your proposed policy targets such as a property sale, measure the number of times a whole house renovation was; offered, taken up and the depth of action taken against the total possible opportunity. Pick other suitable trigger points, design your intervention and take the same measurements.
For those who think it’s impossible to track such activity you may be interested to learn that each property in the UK has a unique reference number. The Government also has access to energy meter readings – real and estimated – for all properties that they can match to that reference number. They can also match the Energy Performance Certificate (EPC) underlying data to particular properties too. And remember, an EPC is required on all property sales and an updated one reflecting improvements is required whenever measures under various Government schemes are installed. Tracking new home mover activity is not only feasible but actually relatively straight forward and cheap.
Other data sets exist too. Let’s say that a ‘new home mover’ initiative isn’t offering the level of uptake you hoped for. Then try out a policy initiative that incentivises boiler installers to up-sell energy efficiency measures and measure the success by dragging in the Gas Safe certificate registration data into your now expanding data set.
It is time we moved away from ideology or expert opinion ‘knowing’ what the right solutions are and used the available rapid feedback loops to actually tell policy makers what is working. Having rapid information available indicating success, or otherwise, allows the iterative changes to policy that might mean it actually has a chance of working – i.e. delivering against its core goal. I’m certain the iPod took several iterative changes before its sales took off; large scale renovation might just need a few more.
This approach perhaps has special relevance for Labour given their promise to ‘freeze the bill’. Should Labour win the next election, the challenge is to drive permanent and genuine household energy bill reductions in the time window the temporary bill freeze buys.
I’d also offer a further lesson to this current Government. If the supply chain isn’t offering a joined up proposition focussed on your true system goal, don’t blame it. Rather treat it as valid feedback and understand why not! The challenge must be to keep working at the policy design if it is to succeed.
So my key recommendation; set up an ‘Existing Homes Hub’ as an arena industry and Government can get together to create rapid feedback loops – of course based around success indicators that truly reflect what you’re trying to achieve.
Also, beware your ideological lines in the sand whether they are ‘anti-regulation’ or ‘not setting targets’. If the ambition for change is genuinely held, don’t remove half the tools in the tool box before they can be considered. Light touch tax incentives such as linking stamp duty paid to property energy efficiency may be much more effective than subsidy alone – but you’ll never know if it’s never an option. And you also won’t know quickly enough if you don’t set up rapid information feedback loops.
Let’s be clear, the existence of big data now offers the next Government a choice. They can use all the potential offered by such tools or they can continue to do as the current Government has done; rely on ideology to make policy choices and rhetoric and spin to claim success despite no genuine attempt to actually measure it.