The Australian Government has previously had difficulties with the administration of energy efficiency building upgrade schemes, particularly the "Home Insulation Program". As the auditor reported:
"Overall HIP has been a costly program for the outcomes achieved, including substantial remediation costs. There still remains a range of safety concerns and coronial inquiries are yet to be completed in relation to the four fatalities associated with installations under the program.".It would be unfortunate if this was repeated with the Low Income Energy Efficiency Program. The scheme has a high political risk, with the Minister deciding on each project and thus risking being held politically responsible for any financial loss or deaths resulting.
There are lessons for the energy efficiency programs in the results of the Building the Education Revolution. In particular, the non-government school systems were able to produce more innovative results, such as the St Monica’s Primary multi-purpose learning centre. But while state government administered systems may have problems, it is unfortunate that government‐owned public housing is excluded from the Low Income Energy Efficiency Program.
1.3 How the program will be managed
The Low Income Energy Efficiency Program is a competitive merit-based grant program with defined funding limits. Only the strongest proposals that most successfully meet the assessment criteria will be funded. Applicants are encouraged to consult the Department
while preparing Expressions of Interest and Applications to ensure their proposal meets the basic application requirements. Guidance material is available to assist potential applicants.
A Program Advisory Group comprising officers from relevant Commonwealth agencies will work with the Department to assess eligible Expressions of Interest and to score Applications against the merit criteria. The Department will have overall responsibility for managing the Expressions of Interest and Application assessment processes, and for making recommendations to the Minister for Climate Change and Energy Efficiency (the Minister). The Minister will make final decisions regarding which Expressions of Interest will be invited to submit Applications and which applicants receive grant funding under the Program, based on the recommendations provided by the Department.
1.4 Low Income Households
The definition of ‘low income households’ for this program is a general term and applicants will be required to describe how they will identify and enlist low income households into their trial. Applicants will also need to indicate the particular type of low income household group being targeted as part of their trial.
As a guide, one or more of the following indicators should be used to define low income households for the purpose of the Program:
• Household income is in the bottom two quintiles of the Australian population
• Householder is in receipt of an Australian Government concession card
• Household income is mainly derived from income support payments
• Householder is a member of a particularly disadvantaged target group e.g. Indigenous, culturally and linguistically diverse, new arrivals, person with a disability
• High energy needs due to either individual or locational factors e.g. disability or climate (high energy usage relative to household size and composition)
• Householder is participating in an energy hardship program
• Householder is disconnected or at risk of disconnection from their energy source.
The term ‘households’ includes private dwellings such as houses, flats and home units but excludes government‐owned public housing.
1.5 Consortium arrangements
Those interested in applying for funding must be part of a consortium to submit a proposal under the Low Income Energy Efficiency Program. The formation of a consortium will assist interested parties to interact effectively with each other and submit a coordinated
application that provides a targeted approach to meet the program’s objectives. It will be important to ensure that the consortium possesses all the relevant skills and attributes required to deliver a successful project.
Consortium members should carefully consider the most appropriate management and governance arrangements to suit their membership and the nature of their project. Other than the Department’s requirement to contract with a single entity to ensure central management of each project, there is no blueprint for the membership or governance of a consortium. The structure of the entity that deals with the Department could involve a single entity leading the consortium in effect as a ‘prime contractor’ or the formation of a separate incorporated body.
A consortium may subcontract the performance of part of the project to third parties noting that the costs of doing so must qualify as eligible expenditure if the consortium wishes to include these expenses in the project budget. In undertaking a project, the entity that
enters into the funding agreement will be responsible for the performance of the entire project, notwithstanding that implementation of parts of the project may be undertaken by consortium members or subcontractors.
Organisations that could be involved in the project through membership of a consortium include, but are not limited to, the following:
Community organisations – the ability to identify and work with relevant low income households will be essential to each project’s success. Community organisations have extensive experience and linkages with low income households and will be able to play a vital role in encouraging the participation of low income households in the project.
Energy companies – energy companies can benefit from being involved in a project through providing their customers with a better understanding of energy efficiency and how this relates to their energy bills and charges. This may also assist in the reduction of or shift away from peak demand periods which could delay the need for further investment in networks.
State, territory and local governments – state, territory and local government involvement in projects can offer a contact point for eligible households as well as providing established administrative and reporting structures, and possibly additional financing.
State or territory governments and their agencies will only be allowed to lead consortia where this is shown to be necessary to provide governance and administrative support to other consortium members. In these instances, the projects will need to be clearly shown as additional to existing or planned state or territory programs and free from the risk of substituting Commonwealth for state or territory funding. State or territory owned entities and their subsidiaries, such as energy companies, will be able to lead consortia.
Manufacturers, suppliers and installers of energy efficient technologies – active participation of these organisations is important for creating a market for energy efficiency services and products. These organisations could also provide support for the adoption of standards, training, accreditation processes, product testing, installation and guaranteeing post‐sales support. This may also provide opportunities to engage local industry.
Financial institutions – financial institutions could assist in the development of flexible packages for households, including those that reduce up‐front capital costs for technologies and services trialled through projects.
Research institutions – a research institution could assist in developing strategies for and assisting in the collection and analysis of relevant trial data necessary to assess the success and benefits of each trial. ...
From: Low Income Energy Efficiency Program Guidelines, Australian Government, 9 February 2012.