The Department of Economic Development, Jobs, Transport and Resources (The Department)

The Department of Economic Development, Jobs, Transport and Resources (the Department) has completed consultationon recommencing incentives for ceiling insulation in the Victorian Energy Efficiency Target (VEET) scheme, also known as the Energy Saver Incentive, subject to strict installation and safety requirements.

In this consultation, it was proposed that the current discount factor of zero would continue until such time as the Essential Services Commission (ESC)publishes new guidelines that address the quality and safety issues identified. The effect of a zero discount factor is that the activity is eligible for zero certificates. Once new guidelines are published, the discount factor expires, and ceiling insulation becomes eligible for VEET scheme incentives.

There was a range of views on this proposal, and overall broad support for this approach. After consideration of the issues raised, the Victorian Government has decided toimplement the proposed discount factor declaration without amendment.

Written submissions were received from 8stakeholders. Those submissions which were not marked confidential are published on the Energy Saver Incentive website:

http://www.energyandresources.vic.gov.au/energy/about/legislation-and-regulation/energy-saver-incentive

This paper responds to the issues raised during consultation and outlines the next steps.

Recommencing VEET incentives for ceiling insulation

Stakeholders supported the approach to recommencing incentives for ceiling insulation in the VEET scheme. There was agreement that it was appropriate to finalise the relevant ESC guidelines before recommencing incentives.Multiple stakeholders supported the findings of the report: Review of Ceiling Insulation and the Victorian Energy Efficiency Target[1] (KPMG 2014).

Stakeholders noted that they considered that the ESC had appropriate powers to provide effective oversight. Clear training requirements, product approvals, and requirements on accredited parties to appropriately manage risks were highlighted as issues that could be managed by the ESC.Stakeholders provided a range of recommendations on the detail of these guidelines.

One stakeholder raised a number of technical and safety concerns regarding the process of setting standards, the efficacy of insulation, and compliance with energy safety regulations, that would need to be addressed prior to incentives being reinstated for insulation.

Safe and effective installation of ceiling insulation is a priority. The ESC has sufficient powers to support this outcome including through the development of guidelines and an effective compliance regime.

Several stakeholders raised specific issues relating to the design and implementation of training and the design of compliance and oversight programs. These are matters for the ESC to consider in the finalisation of the guidelines. The ESC will consider these submissions and will be consulting with stakeholders before the guidelines are published.

Benefits of ceiling insulation

Stakeholders notedthat ceiling insulation is a low cost option to reduce energy consumption and improve thermal comfort for households. Stakeholders identified that the installation of ceiling insulation is a low cost approach to reducing energy costs. It was noted thatthe homes of households under energy cost stress were sometimes poorly insulated.Reintroducing ceiling insulation in the VEET scheme would provide an incentive to install ceiling insulation where finance was a barrier.

Update references to ceiling insulation installation standards

It was noted that the current VEET Regulations reference the ceiling insulation installation standard (AS3999:1992). Stakeholders recommended thatthis reference should be updated to the most recent version (AS3999:2015).

The Department will conduct further consultation shortly regarding amendmentsto the VEET Regulations to appropriately update standards.

Conductive insulation

Some stakeholders noted that it would be prudent to exclude conductive insulation or higher risk installation approaches from VEET incentives.

Consultation on the proposal to exclude conductive insulation from the VEET scheme willoccurshortly. Any regulation changes will come into effect prior to the ESC completing their guidelines and the recommencement of incentives for ceiling insulation.

Department of Economic Development, Jobs, Transport and Resources

1 Spring Street Melbourne Victoria 3000

Telephone (03) 9208 3333

December 2015

Department of Economic Development, Jobs, Transport and Resources 2015

Except for any logos, emblems, trademarks, artwork and photography this document is made available under the terms of the Creative Commons Attribution 3.0 Australia license.

This document is also available in an accessible format at energyandresources.vic.gov.au/esi

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[1] KPMG (2014) Review of Ceiling Insulation and the Victorian Energy Efficiency Target. Available at: http://www.energyandresources.vic.gov.au/energy/about/legislation-and-regulation/energy-saver-incentive