E-ON Opinion: Energy Efficiency & The LAD Scheme

"The LAD Scheme delivers. Give us the ability to do more of it."
Written by Dan Meredith, Senior Manager - External Affairs, E-ON

We all know an energy efficiency scheme that delivers at scale is the nut to crack when it comes to delivering net zero emissions for the UK. That’s before we mention all the other benefits of finally delivering energy efficiency at scale: a lower cost of living and a higher standard of living, better health and less pressure on the NHS at this critical time, thousands of skilled green jobs across the country - particularly in those areas where jobs are most at risk and poverty is at its highest.


Well, policymakers take note: The Local Authority Delivery Scheme – the LAD Scheme as it’s known – holds the lessons we need to design energy efficiency schemes that work.

Born as the little sibling to the grander Green Homes Grant (GHG) voucher scheme; where the GHG has struggled, the LAD scheme has quietly and effectively got on and delivered. Allocated £500m in July 2020 compared to the £1.5bn allocated to GHG, whilst GHG has so far helped just 4% of the total number of homes targeted, the LAD scheme has fully allocated 100% of its funding for Phase 1 and is oversubscribed. We know there is further demand for the LAD scheme and if the scheme was given further funding today, we know there are ‘oven-ready’ projects across numerous local authorities that could kick-start economic activity immediately.

The LAD scheme works because it brings together expertise and scale. Local authorities are trusted in their communities and know the needs of their local area. Technical specialists such as E.ON understand the logistics and the supply chain needed and have a long history of successful delivery. LAD brings them together under a single contract process.

That means the journey for both householders and the supply chain is clear and simple. Demand can be matched with supply at a local level, but the programme can be managed and contracted at a national level.

To tell the story in numbers: in 2021 alone, E.ON is already working with more than a dozen local authorities through the LAD Scheme, delivering vital home improvements - ranging from energy saving upgrades to solar panels and heat pumps - to more than 4,000 homes. Those upgrades will save those households something in the region of £23 million on energy bills over their lifetime, as well as reducing emissions and making a crucial contribution to the energy transition.

And off the back of this, E.ON is already recruiting for 100 new roles to help manage these LAD Scheme projects and we anticipate at least 150 more jobs will be supported and created by our supply chain partners in the process.

The relative failure of the GHG so far to deliver at scale, and the success of the LAD scheme in doing exactly that, gives Government an opportunity to ‘learn by doing’ and show it can be as fleet-of-foot and agile as any commercial business, moving resource and funding from areas that are not delivering to areas that are.

By diverting unspent GHG funds over to the LAD scheme, local authorities would be able to increase the number of homes upgraded across the country under the current scheme at least threefold.

Increasing the £10k cap on improvements per home will further expand the LAD scheme. E.ON’s experience shows that around 55% of measures that would otherwise be recommended by our installers are rejected because the household cap is insufficient to meet the energy transition needs of most households. Doubling the size of the cap in the LAD scheme to £20k per household will fix this problem expanding the number of projects that are eligible for the scheme and delivering the most cost-effective pathway to decarbonising home heating.

Expanding the eligibility criteria for the LAD scheme is also important. Currently only those households most in need can be helped by LAD, whereas the Green Homes Grant voucher scheme is open to all. The Energy Company Obligation (ECO) is already a tried and trusted scheme that brings energy efficiency improvements to those most in need and is due to be expanded to a £1Bn a year fund soon. E.ON will continue to deliver energy efficiency measures to homes across the country via ECO.

An expanded LAD scheme mustn’t act in competition with ECO and expanding eligibility will help boost a true green economic recovery and allow rapid expansion of the scheme with associated job creation, energy and carbon savings and household delivery managed by competent Local Authorities and delivery specialists like E.ON.

Expanding LAD to fill the gap left by the Green Homes Grant voucher scheme and ensuring future energy efficiency and home upgrade schemes, such as the upcoming Clean Heat Grant, are not based on voucher schemes that we know don’t work, but instead are built on the framework of the LAD scheme that we know delivers, will help build confidence in the home upgrade supply chain and in households, making sure future schemes deliver the benefits we all want to see.

The LAD Scheme delivers. Give us the ability to do more of it.

Dan Meredith is Senior Manager - External Affairs at E-ON 



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