Ofgem Consultation: Deemed Scores for ECO

Ofgem released a new consultation on 27th May seeking feedback on the proposal that, as of 1st April 2017, ECO scores would be based upon ‘“deemed” scores. Responses need to be in by 8th July 2016. 

This Ofgem consultation is purely focusing on what the deemed scoring methodology should be IF government decide to introduce deemed scoring for an energy company obligation post April 2017. Whether government DO decide to introduce deemed scoring will be determined by the government’s own broader consultation on the replacement obligation expected to be published sometime over the summer. Nonetheless it is important the industry responds to both consultations and takes the opportunity to present the case for the added benefits that EPCs can bring to the scoring of energy efficiency measures.

Deemed scores would consist of a set of scores pre-calculated (by BRE) based on the following variables:

Property type (detached, semi-detached etc)

Number of bedrooms

Heating type and fuel

Measure type

If this proposal is adopted, this means an EPC or RdSAP dataset would not be required for ECO scoring as, using the 4 variables above, a score can be ‘looked up’. This is a similar approach to that adopted for pre ECO energy efficiency schemes such as CERT and CESP, but using more recent data on the UK housing stock.

The reasons given for this change in approach include speeding up the ECO process, reducing costs and making the audit process easier. 

It is acknowledged that there is a downside to the use of deemed scores in place of EPCs. The scores would effectively be based upon ‘average’ dwellings rather than the characteristics of the actual dwelling being improved. However, the consultation document does not explore these downsides in any detail.

NES is currently looking at the deemed score proposals to better understand the implications. However, we have two obvious concerns that bring into question the overall cost effectiveness of the approach.

Our first concern is that the measures will not reach the poorest performing properties, because deemed scores will use the most common efficiencies and insulation levels found in the housing stock. For example the deemed score for a boiler replacement in a well insulated 3 bed semi will be the same as one with solid walls and no loft insulation. Therefore, there would be no incentive, as there is currently with ECO, for installers to seek out the most energy inefficient properties.  

A second concern is that the scores provide no incentive for installers to go for achieving the highest level of efficiency possible for a specific dwelling at the time that it is improved. For example, for gas boilers an ‘after’ efficiency of 88% is assumed in the score regardless of what boiler is installed; similarly, the ‘pre’ efficiency is taken at a fixed 83% regardless of the gas boiler being replaced. 

NES will be carrying out further analysis on how deemed scores compare to the current regime and will be publishing more information on our findings. We will also be looking at the proposals more fully, as part of preparing our consultation response to Ofgem. We will be providing a summary of our conclusions well ahead of the deadline for responses to the consultation of 8th July 2016. 

An important question from the perspective of a Domestic Energy Assessor is “Q14: Do you agree that a DEA is not required to check inputs used when identifying a deemed score for a measure? If not, please clarify why you do not agree and provide an alternative approach with reasoning.” There are certainly areas where a DEA could add value to the process e.g. establishing the dwelling age for properties to receive solid wall insulation, applying the RdSAP conventions for determining the primary heating system. However, due to the small number of data items that need specifying it’s hard to see how a DEAs involvement could be justified.

If deemed scores go ahead, a more useful role for DEAs would be in issuing an EPC after the improvement measures have been installed. This would help verify that the work has indeed been done as specified and provide the dwelling with an up to date EPC. This is, we believe, one option that is being considered, the concern being justifying the cost involved. 

We encourage all our members to read the consultation and have their say.

The full consultation documentation and proposed deemed scores can be accessed here.