Tens of thousands of residences in the UK that underwent energy efficiency upgrades through a government initiative are now plagued by significant issues like dampness and mold, as per a report by a government spending watchdog. The National Audit Office highlighted that some of these problems present immediate risks to health and safety, with up to 16,500 potential false claims amounting to around £165 million in suspected fraud related to the Energy Company Obligation.
The Energy Company Obligation, aimed at addressing fuel poverty and reducing carbon emissions, mandates energy companies to finance the installation of measures like insulation in households, with costs passed on to customers. However, the NAO’s critical analysis exposed numerous shortcomings in the scheme’s design, with approximately 98% of homes with external wall insulation facing major issues requiring rectification, including 6% with urgent health and safety concerns. Internal insulation in 29% of homes also showed serious faults.
Issues such as an inadequately skilled workforce, subcontracting to uncertified entities, ambiguous standards adherence, and shortcuts in design and installation processes may explain the prevalence of these faults. Despite the Department for Energy Security and Net Zero implementing new consumer protection measures in 2021, significant installation quality concerns were only flagged in October of that year.
Moreover, regulator Ofgem estimated that a substantial number of businesses submitted false claims for ECO installations, potentially securing between £56 million and £165 million fraudulently from energy suppliers. Gareth Davies of the NAO emphasized the urgent need for DESNZ to ensure affected homes are promptly repaired and to overhaul the system to prevent future occurrences.
Simon Francis from the End Fuel Poverty Coalition lamented the infiltration of unscrupulous operators into the system, leading to substandard installations and eroding public confidence in efforts to address home energy efficiency. He stressed the importance of revamping the system to guarantee quality workmanship, independent inspections, and swift resolution of any issues.
Minister for Energy Consumers Martin McCluskey acknowledged the systemic failures in solid wall insulation installation and assured that the government is rectifying the flawed oversight and regulation inherited from the previous administration. Decisive actions are being taken to rectify poor installations at no expense to consumers and streamline the process for homeowners seeking home improvements, ensuring accountability and swift resolution of any mishaps.