Home Energy Conservation Act (HECA): An opportunity to innovate and deliver

Local authorities and registered providers are at the forefront of the developments surrounding Green Deal and ECO and have long recognised the potential of Green Deal and ECO to reduce energy bills, alleviate fuel poverty (including reducing the incidence of ill health linked to fuel poverty) and drive economic opportunities for citizens, tenants and employees.  Given the leading role played by the public sector in this space, the Department of Energy and Climate Change (DECC) is requiring all local authorities with housing responsibilities to prepare a report setting out:

“the local energy conservation measures that a local authority – or groups of authorities – consider practical, cost effective, and likely to significantly improve the energy efficiency of residential accommodation in its area”,

by 31 March 2013.  Time is running out to finalise the reports ahead of publishing them on the relevant local authority’s website and sending a copy to the Secretary of State. 

What is HECA?

The main objective of the Home Energy Conservation Act 1995 (HECA) is to encourage energy conservation measures in residential accommodation.  Under HECA, the Secretary of State may give guidance to local authorities on what energy efficiency improvements are to be regarded as significant.  In July 2012, DECC issued guidance to English energy conservation authorities in recognition of the key role local authorities can play as catalysts for change. 

Under the guidance, local authorities are encouraged to set priorities, ambitions and any related targets as they are best placed to assess their local needs and judge what will achieve significant improvements based on their particular local circumstances.  Given the trend of ever increasing energy prices the HECA obligation provides a platform for local authorities to set out:

• local energy efficiency ambitions and priorities.  It may be the case that a local authority already has, or is developing, local plans to improve significantly the energy efficiency of residential accommodation in its area and these existing plans may therefore form the basis of its response to the HECA;
• the measures that take advantage of financial assistance and other benefits offered from central Government initiatives, such as the Green Deal, ECO and RHI, to help result in significant energy efficiency improvements of residential accommodation; and
• the measures which a local authority has developed to implement energy efficiency improvements cost-effectively in residential accommodation by using area based/street by street roll-out involving local communities and partnerships (e.g. registered providers, voluntary organisations and town/parish councils).

What it could mean for you

Although the obligation to produce a HECA report rests with the local authority, developing a comprehensive local energy conservation report for domestic properties in area provides a fantastic opportunity for local authorities and registered providers to:

• plan their approach regarding Green Deal and ECO;
• assess one-off approaches from utilities and understand whether they represent value for money – what lasting additional value can local authorities and registered providers secure in return for assisting energy companies to discharge their ECO responsibilities?
• work together to develop innovative solutions in response to HECA;
• assess opportunities to work with other local authorities and/or registered providers to assess capacity for larger, more ambitious Green Deal and wider energy schemes;

Bevan Brittan is the market leading law firm on Green Deal and ECO and we advised Birmingham City Council on their ground breaking procurement of Carillion Energy Services Limited – the first Green Deal procurement pursuant to the Energy Act 2011 and Europe’s largest housing regeneration scheme.  Birmingham’s solution is one of a number of approaches in the market at the moment and we are working with a number of clients (including local authorities, registered providers and service contractors) on how they can:

• maximise opportunities and create long term added social value from Green Deal and ECO schemes; and
• use Green Deal and ECO as a springboard to realise wider energy opportunities such as district heating schemes.

We would be delighted to share our ideas with you or help review any current proposals you may have relating to HECA.

Please contact us if you would like to know more about how our experience may help you in responding to the HECA requirements and more generally to consider your strategy around energy efficiency (of which Green Deal and ECO offer the most immediate opportunities).