Interview with Brian Scannell of NHER – part 1

Brian Scannell of NHER and managing director of National Energy Services (NES) Ltd joins us to answer our questions in a two part interview.

Q 1 NHER produced some great research in relation to non-compliance of Commercial EPCs recently. Do you have any other similar research you are undertaking at present and when could we expect to see the results?

A1. Each month we check a sample of 500 commercial properties listed for sale or rental and cross check them against the central register. The sample of properties is drawn from two or three different towns each month in order to try to ensure the results are as representative as possible of general market conditions. The results are published in Building Magazine and on our news page of our website. The very latest results are due to be published shortly and show a further slight improvement, but there are still very serious non-compliance issues.

Q2. There are nine accreditation schemes with who domestic energy assessors can be accredited with; is this a good thing for the industry or would we better with one or two?

Multiple schemes only make sense if they are all operating to consistent minimum standards that ensured accurate and reliable EPC backed up with robust quality assurance and consumer redress mechanisms. If this were the case, schemes would compete on the basis of quality of service, support, software etc. However, without such rigorously enforced minimum standards, there is always a danger that quality is the first thing to suffer. We therefore warmly welcome recent initiatives from CLG to begin to define and enforce such standards; we just hope that they have the will and determination to follow this through. We think it is likely that this will lead to some schemes withdrawing from the market.

Q3. The domestic energy assessment industry is highly competitive at present and I imagine this will apply to the accreditation schemes as well. Is it likely we will see some consolidation in the market place amongst accreditation schemes?

In a normal commercial market, one would certainly expect to see consolidation, but there seems little evidence of this happening to date. This may be because of the lack of consistent standards and the apparent willingness of CLG to approve new entrants. The increasing focus by CLG on quality issues will probably end up driving consolidation both through schemes withdrawing from the market and, possibly, the merger or schemes.

Q4. From our experience and contact with domestic energy assessors (DEAs), many are struggling finding adequate levels of instructions at a ‘sensible’ fee levels, do you see this changing in the near future?

It is very difficult to see any rapid improvement in market conditions for DEA. The housing market is currently extremely subdued, particularly in respect of new listings and there is unlikely to be any significant improvement over the next few months – particularly given the inevitability of a general election. There is also a systemic decline in demand for private rental EPC due to the ten-year validity period. So there is little prospect of any significant increase in demand.

However, given the overall policy goal of achieving a dramatic improvement in the energy efficiency of residential buildings, I believe that new opportunities for DEA will emerge. We have highlighted the role EPC and energy assessors can play in our Seizing the Opportunity report. We are eagerly awaiting the Household Energy Management Strategy (HEMS) consultation due to be published in the next few weeks and we are lobbying hard for energy assessors to have a fundamental role in helping to achieve the changes required.

Q5. We continue to receive request from trainee Home Inspectors asking us about potential work opportunities to carry out Home Condition Reports (HCRs) on our behalf. The Home Inspector training course is still being sold even though almost no HCRs are being undertaken, how do you feel towards this and do you still offer this training course?

The sad reality is that there is currently almost no demand for HCR for inclusion in a HIP. However, we are seeing some (albeit very limited) demand for our Home Condition Survey, which is targeted towards buyers. We have also contributed to a working group report, currently with the Minister, which makes a series of recommendations that we believe would help to increase demand for condition reports from buyers.

With regard to the HI qualification; I think the key is to be absolutely honest. Anyone suggesting that there are significant work opportunities for HI purely as a result of holding the qualification is being seriously disingenuous. We aren’t currently offering new training courses for prospective HI, although we continue to support our existing candidates and would encourage them to gain the qualification. It is a very good qualification and we are actively seeking to develop opportunities for our accredited HI.

Q6. Within domestic energy assessment training courses a section is dedicated to ‘conflict of interests’ i.e. assessors not ‘selling’ insulation services or similar if undertaking the EPC. Many accreditation schemes offer accreditation, run training courses and manage commercial ‘panel’ operations gaining EPC work; is this not a conflict of interest?

NES operates a very small DEA panel through SAVA Business Exchange and this is run at complete arms length from the accreditation scheme. Operating the panel gives us some first hand experience of the challenge in the market and the problems that members of the accreditation scheme face. Overall, our strong recommendation to all of our members is to work closely with their local estate agents. We believe that a local relationship will deliver the best outcome for all parties. This isn’t the appropriate solution in all situations, but we would recommend it to any DEA wishing to operate as a freelance.

Q7 We have seen EPC fee levels fall and many DEAs are carrying out EPCs at what we consider as unsustainable and non profitable, what has caused this situation? Many DEAs blame ‘panels’ for this do you hold this view?

I can understand why DEA blame panels, but the underlying problem is simply that of oversupply – there are too many qualified individuals chasing too few opportunities. This means that the organisations instructing the work have all of the pricing power and the poor DEA is in the weakest possible position. Hopefully the increasing focus on quality and the development of new opportunities for energy assessors will help to rebalance the supply and demand, but I am not expecting this to happen quickly.

Q8 Our research from a FOI Act application regarding DEA numbers there was about 12,000 accredited DEAs on the 29th June 2009. What number of DEAs do you feel are actually ‘required’?

I’m reluctant to put a single figure on the number required because so much depends on how the market operates and how it develops in the future. We would like to see the DEA role evolve into something much more comprehensive, providing personalised advice and support to homeowners wishing to improve the energy efficiency of their homes. However, even in this scenario it is difficult to believe that there would be sufficient demand to keep all current DEA fully employed.

Q9 What advice would you have to someone who was considering training as a domestic energy assessor (DEA) at present?

The advice we do give to anyone contacting us is to seriously assess where they are going to get their work from. The numbers now entering training with us are relatively small and are typically employees within social housing providers or other organisations wishing to develop an in-house capability or, often, just to improve their in-house knowledge and understanding.

Brian Scannell returns on Wednesday in the second part of the interview. Brian will be sharing his views towards the ‘new’ Housing Energy Advisor role and the future and history of HIPs amongst other areas.

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