Final Report for the Department of Primary Industries - Victoria
18 May 2012
Futura Consulting makes no representation or warranty as to the accuracy or completeness of the material contained in this document and shall have, and accept, no liability for any statements, opinions, information or matters (expressed or implied) arising out of, contained in or derived from this document or any omissions from this document, or any other written or oral communication transmitted or made available to any other party in relation to the subject matter of this document.
Suite 18, Alma Complex, 663 Victoria St
Abbotsford Vic 3067 Australia
- 1. Executive Summary
- 1.1. Study Background
- 1.2. Study objectives
- 1.3. Key findings and due diligence Review recommendations
- 1.4. Additional program refinements
- 1.5. Public consultation
- 2. Background
- 2.1. Study context
- 2.2. Study objective and scope
- 2.3. Methodology
- 2.4. Report organisation
- 3. Re-introduction of Ceiling Insulation to the VEET
- 3.1. Administration and management
- 3.2. External installer and installation oversight and compliance
- 4. Meta-analysis of the Findings of HIP Reviews
- 4.1. Program overview
- 4.2. HIP Administrative Difficulties and safety and management issues
- 5. Outcomes of the Due Diligence Risk Assessment
- 5.1. Issues addressed in our review
- 5.2. Key Findings
- 5.3. Areas of concern
- 6. Conclusions and Additional Program Refinements
- 6.1. Conclusions
- 6.2. Additional program refinements
- Appendix A: Selected Annotated Bibliography on the outcomes of the HIP
- Appendix B: Pre-Installation Risk Assessment Templates
1. Executive Summary
1.1 Study Background
The Victorian Energy Efficiency Target (VEET), administered by the Essential Services Commission (ESC), aims to assist consumers to reduce their electricity and gas bills, and associated greenhouse gas (GHG) emissions, and to encourage the development of energy efficiency goods and services within the State. The VEET is enabled through the Victorian Energy Efficiency Target Act 2007 (the Act) and came into effect on 1 January 2009.
Also known as the Victorian Energy Saver Incentive (ESI), the measure establishes energy use reduction goals for stationary energy consumption which are achieved through the implementation of prescribed activities that are specified under the Victorian Energy Efficiency Target Regulation 2008 (the Regulations). Businesses accredited to participate in the scheme may create Victorian energy efficiency certificates (VEECs) for each tonne of carbon dioxide equivalent of greenhouse gas emissions deemed to be saved from the activity. The VEECs are procured by large electricity and gas retailers to meet liabilities imposed by the Act.1
The scheme initially only targeted energy efficiency improvements in the residential sector but was extended to eligible businesses and non-residential sites in December 2011.2
Since the ESI scheme's commencement in January 2009, the VEET will have achieved more than 8.1 million tonnes of lifetime greenhouse gas emissions in its first three years of operation.
Although ceiling insulation is included as a prescribed activity under the Regulations it is not presently possible to create VEECs from its installation. To avoid duplicating incentives, a 'discount factor' of zero was applied to the ceiling insulation activities under VEET in July 2009 following the introduction of the Federal Government's energy efficiency homes package which provided a rebate that covered the costs of installing ceiling insulation in an average sized home. This discounting effectively suspended incentives for the ceiling insulation measure under the VEET.3
The HIP program was closed in February 2010 due to escalating safety and compliance concerns, including deaths during the installation of insulation and fire incidents in households with insulation installed under the HIP.
1.2 Study Objectives
The closure of the HIP left a 'gap' in Commonwealth and State government policy to promote a very effective energy efficiency measure. As such, the Department of Primary Industries - Victoria (DPI), in conjunction with the ESC, is presently examining the possibility of re-introducing the installation of ceiling insulation as a VEEC creating eligible activity under the VEET scheme. DPI is however concerned to ensure that appropriate safeguards are in place to protect consumers from potential safety risks, and to protect the integrity of the scheme. Futura Consulting (Futura) was retained by the DPI to assist in achieving this outcome by providing an independent review of the design and implementation plans for the proposed re-introduction of a VEET ceiling insulation scheme with a view to identifying any material risk related deficiencies and providing recommendations for refinements to mitigate risks, as appropriate.
Futura's review will form part of the public consultation process that DPI intends to undertake to obtain feedback form relevant stakeholders on the removal of the discount factor from the VEET ceiling insulation activity, and its re-introduction as a VEEC creating mechanism.
1.3 Key findings and due diligence Review recommendations
Futura's 'Due Diligence' review of the DPI's proposed ceiling insulation program has assigned a rating of 'no significant risk' for elements of the current program design that do not warrant any material change and a rating of 'area of concern' where changes may be required to the program to mitigate identified risks.4
While the outcomes of the due diligence review generally support the re-instatement of ceiling insulation as a VEEC creation mechanism under the VEET, program elements that have been found by this review to be an 'area of concern' related to consumer safety or program integrity include:
- VEET ceiling insulation eligible activities particularly in regards to the inclusion of foil insulation within the scheme and ambiguities, over the eligibility of homes with foil insulation already installed;
- Installer training in regards clarifying the mandatory coursework requirements and potential requirements over supervision and on the job for inexperienced installers; and
Pre-installation inspection process for assessing potential hazards and ensuring compliance checks are performed.
In addition, post-installation inspections of ceiling insulation installations in regards to obtaining greater detail on the thermal performance was also considered to an area of concern that could benefit from further review.
Recommendations addressing the management of each of the above issues are provided below.
Recommendation 1: VEET ceiling insulation eligible activities
Owing to what could be seen as minor conflicts in the wording of AS 3999 1992 Thermal insulation of dwellings - Bulk insulation - Installation requirements and AS/NZS 4859.1 2002 Materials for the thermal insulation of buildings (both of which are cited in the Regulations) there is some potential for suppliers and consumers to be confused about the types of ceiling insulation allowed under the VEET.
Futura understands that it is the DPI's view that foil insulation should not be included in VEET. It is suggested that some clarification be provided by the DPI or the ESC to give service providers and consumers guidance in this area, and provide the underlying rationale for its exclusion at present. The suitability of extending the ceiling insulation activity to include foil insulation in future with appropriate risk mitigation measures should also be examined by the DPI.
Administratively, it is suggested that any potential non-compliance issues regarding the eligibility of foil insulation under the VEET could be handled through the product approval process such that only bulk insulation materials are allowed.
Recommendation 2: Installer training
It is recommended that the ESC consider revising the relevant Explanatory Note such that the mandatory training for the ceiling insulation activity includes the following courses:
- CPCC OHS2001A Apply OHS Requirements, Policies & Procedures in the Construction Industry (which is also a prerequisite for);
- CPCCCM1006A Work Safely at Heights;
- CPCCPB3014A Install Batt Insulation; and
- CPCCPB3027 Install Ceiling Installation.
The inclusion or exclusion of CPCPCM2003A Carry Out OHS Requirements should be reviewed in terms of its capacity to enhance installer's competencies relative to the additional cost to them.
In contrast to the specific requirements for training via coursework, currently there are no requirements under the VEET for Accredited Persons (APs) to have any work experience, nor does the VEET specify supervision requirements for relatively inexperienced installers. In order to enhance the level of safety of ceiling insulation activities under the VEET there may be merit in specifying minimum work experience and AP supervisory requirements. Therefore, it is recommended that the DPI and the ESC investigate whether minimum work experience and supervisory requirements be specified as part of the ESC's mandatory training requirements for insulation installers.
Recommendation 3: Pre-installation inspection
At present, the VEET ceiling activity compliance and auditing processes do not include either:
- Specifications regarding the information to be documented as part of the inspection to ensure that all risks are assessed; or
- A compliance procedure to ensure that a pre-installation risk assessment has actually been carried out.
The ESC could potentially address these deficiencies by developing an Explanatory Note describing the purpose of the pre-installation risk assessment, along with a form prescribing the types of risks to be assessed, and signed documentation by all installers at a site that the required hazard assessment has been carried out.
Recommendation 4: Post-installation inspection
The ESC is proposing that all ceiling insulation installations be inspected by a qualified, ESC approved inspector before VEECs are created. Whether it is necessary to continue to require inspections for all installations will be reviewed after a suitable time frame. As currently proposed, the approved inspectors will be drawn from a panel of electrical inspectors licensed by Energy Safe Victoria (ESV).
The purpose of the inspection is to ensure that an installation complies with the Regulations and relevant electrical safety legislation. At present the focus of the proposed inspection appears to be on electrical safety checks. While this is understandable, the ESC may wish to consider thermal performance in greater detail at the time of the inspection. Thermal performance is also a regulated requirement, and the quality of the installation will impact significantly on the effective R-value achieved by the installation. Any inspection in this regard would be a qualitative examination not related to VEEC creation, but rather could serve to identify APs that are carrying out sub-standard work.
It is recommended that consideration be given to expanding the ESC's post-installation checklist to require additional commentary and documentation on factors affecting thermal performance. This could include more information on gaps in the insulation, and additional items such as thermal bridges, compression, vapour barriers, etc. Development of the specifics could be undertaken in consultation with Sustainability Victoria.
Should more detailed examination of the thermal performance of the ceiling insulation installations be adapted, it may be necessary to provide the ESV inspectors with specific instruction and training in the topic. Again it would be expected that Sustainability Victoria could assist in this area.
1.4 Additional program refinements
This review has also identified several non-risk related activities that could assist in refining the current program design, as follows:
- Track industry capacity to meet demand.
The DPI could conduct quarterly or half yearly reviews of the ceiling insulation programs performance. These reviews could involve tracking and monitoring of ceiling insulation take-up against forecasts, and regular consultation with the insulation manufacturing and installation industry. This activity would assist the DPI in early identification of any potential product supply, quality and safety issues;
- Implement a public awareness raising and communication strategy on ceiling insulation.
Concerns over the Commonwealth HIP scheme may still be top of mind for many Victorian consumers. It will be important for the DPI to differentiate the VEET ceiling insulation initiative from the HIP and to help restore consumer confidence in ceiling insulation. The DPI could implement a public awareness and communication campaign to achieve this aim. The campaign could also incorporate an education component that provides consumers with advice about appropriate insulation for their particular circumstances. The Industry Advisory Panel (IAP) in its review of the HIP also supported such a campaign;6
- Publish list of ineligible products to increase consumer information.
The ESC maintains a register of VEET approved ceiling insulation products that are eligible to create VEECs. The ESC could also produce a list of products that have been submitted for approval but have been deemed to be ineligible under the VEET. Consumer access to an ineligible products list would add another layer of consumer protection to the scheme and help raise consumer awareness of the types of products to avoid; and
- Survey installers to assess if the new training regime is on target.
Insulation installers are required to invest time and resources in completing the minimum level of mandated coursework in order to meet the minimum accreditation requirements to become an insulation product AP. The ESC could consider undertaking routine surveys of installers, insulation manufacturers and associations to obtain feedback on the quality and relevance of the coursework being required. The feedback from these sources could be used to refine and update the mandated coursework training.
1.5 Public consultation
Futura Consulting also recommends that direct and specific feedback on the recommendations and potential refinements proposed above is obtained from stakeholders as part of the public consultation that will be conducted by the DPI on the re-introduction of ceiling insulation as a VEEC creating mechanism.
Section 2 provides a brief overview of the policy context for this study, its specific objectives and scope of work, and Futura's methodology for providing the services requested in the DPI's project brief.
2.1 Study context
The VEET was established under the Victorian Energy Efficiency Target Act 2007 and came into effect on 1 January 2009. The VEET, which was promoted to consumers as the ESI scheme is designed to:
- Contribute to reducing greenhouse gas emissions from stationary energy use;
- Provide incentives to consumers to increase the efficiency with which they use electricity and gas; and
- Encourage investment, employment, and development of industries that supply energy efficiency goods and services to consumers.
Under the scheme, a legislative obligation is placed on large electricity and gas retailers to surrender a certain number of VEECs every year. VEECs are created when eligible activities that reduce GHG emissions, prescribed under the Regulations, are implemented. The energy retailers meet their legislated targets either by implementing prescribed activities to create certificates themselves, or by purchasing certificates from an AP. As such the scheme creates a market for the creation and sale of VEECs.
During the first three-years of operation, the program targeted the residential sector. Eligible, prescribed activities consisted of a range of energy saving measures including replacing low efficiency lighting products with energy efficient lighting, installing low flow shower roses, installing ceiling and floor insulation and weather sealing, and purchasing high efficiency appliances such as water and space heaters, fridges, refrigerators, freezers and evaporative coolers. Householders implementing these measures assign their right to create VEECs to an AP in exchange for an incentive which could include discounts or free installation.
As of the December 2011, the Regulations were amended and the VEET program was extended to eligible business and non-residential premises7, and has the potential to include additional prescribed activities.
In July 2009, the Prime Minister announced the Nation Building and Jobs Plan which incorporated an incentive for the installation of ceiling insulation that duplicated the VEET incentives. To avoid 'double dipping' the Victorian Minister for Energy and Resources subsequently declared a 'discount factor' which effectively reduced the GHG abatement attributed to VEET from installing ceiling insulation to zero, and thus negated the creation of VEECs from that activity8. Prior to the application of the discount factor, ceiling insulation had been installed in some 1,140 households under the VEET resulting in the creation of some 56,048 VEECs.9
Following a series of safety related incidents, and issues concerning the management of the program, the Commonwealth HIP was closed in 2010.
In recognition of the effectiveness of properly installed ceiling insulation in improving the energy efficiency of buildings the DPI is presently re-visiting the application of the discount factor to this prescribed activity. The DPI intends to undertake public consultation on the prospect of lifting this suspension, following which, the DPI will provide further advice to the Minister to enable a decision to be made regarding the future of ceiling insulation under the VEET.
A key concern for the DPI in undertaking this consultation is ensuring that appropriate procedures and processes are in place to safeguard consumers, insulation providers, and other stakeholders from material risks to health or property as a result of retrofitting ceiling insulation.
To this end, the DPI will prepare an issues paper for public consultation, addressing:10
- the relevant safety concerns raised by the installation of ceiling insulation;
- the improvements implemented under VEET to address those safety measures; and
- lessons learnt from the Commonwealth's HIP scheme and what steps have been taken to manage the program administration risks under VEET.
2.2 Study objective and scope
Futura was engaged by the DPI to prepare a 'Due Diligence' report comprising an independent review of published performance evaluations of the Commonwealth HIP. The objective of this work is to leverage prior findings and recommendations from those reviews such that any potential risks and known hazards arising from a VEET ceiling insulation program are minimised and managed appropriately.
The specific scope of work for this engagement includes:
- Undertaking independent research to identify all authoritative relevant reviews conducted into the Commonwealth's HIP; and
- Identifying outcomes or recommendations relevant to the management of:11
- risks associated with hazards to health or safety of the public, resulting from the installation of ceiling insulation under VEET, and
- thermal performance of ceiling insulation activities.
This work will support and complement the DPI's issues paper and broader stakeholder consultation on the re-introduction of ceiling insulation into the VEET as a certificate creating activity.
As illustrated schematically in Figure 1, Futura's assessment of the proposed VEET ceiling insulation program was completed in three steps:
- Task 1 - development of an annotated bibliography of relevant authoritative reports and reviews that have been conducted to date on the Commonwealth HIP scheme;
- Task 2 - detailed review of the reports identified and compiled in Task 1 to identify the key findings and relevant recommendations from those evaluations; and
- Task 3 - review DPI's proposed design and implementation plan for the VEET ceiling insulation scheme and highlight potential deficiencies in light of the outcomes of Task 2.
Figure 1 illustrates schematically the three key outputs from the study.
Figure 1: Overview of the main study components
What went Wrong
→ Due Diligence Review
→ Due Diligence Review
→ Due Diligence Review
2.4 Report organisation
The remainder of this report is structured as follows.
Section 3 describes the accreditation processes for insulation installers and products, installation requirements, and the compliance monitoring procedures proposed for the re-introduction of ceiling insulation as a VEEC creating activity.
Section 4 provides an analysis of the HIP, incorporating our findings from Task 1 (Identify and catalogue existing reviews of the HIP) and Task 2 (Assess outcomes and lessons learned from the reviews).
Section 5 presents our findings in regards to potential risks associated with the design and delivery of the proposed VEET ceiling insulation program.
Section 6 concludes the report. It presents our recommendations on potential refinements to the design and implementation of ceiling insulation under the VEET.
3 Re-introduction of Ceiling Insulation to the VEET
Section 3 provides a description of the proposed re-introduction of ceiling insulation as a VEEC creation prescribed activity under the VEET. It includes an overview of the agencies that will be responsible for the management and the administration of the program, along with the proposed procedures for service provider accreditation and training. The processes to ensure that installations are compliant with the Regulations are also presented.
3.1 Administration and management
3.1.1 Responsible agencies and roles
The departments and agencies involved, and their roles, in administering and enforcing compliance with the VEET include:
- DPI - provision of policy advice to the Minister for Energy and Resources regarding the ESI scheme; and
- design and setup of the scheme,
- ongoing engagement of relevant stakeholders (particularly energy retailers and APs), and
- facilitating reviews of eligible scheme activities, and facilitating evaluations of the overall performance of the ESI scheme,
- ESC - general administration of the scheme;
- accreditation of persons who may create certificates,
- monitoring and managing VEEC creation, registration, and transfer,
- enforcing penalties associated with the imposition of any energy efficiency certificate shortfalls under the Act,
- undertaking audits and monitoring compliance with the Act,
- assisting with reviews of eligible scheme activities, and reporting to relevant Ministers.
The ESC is also responsible for preparing annual reports on the performance of the eligible activities implemented under the scheme.
Sustainability Victoria is also available to assist with reviews of eligible scheme activities, and to offer technical advice to the DPI and the ESC, as required.
3.1.2 ESC VEET scheme internal resourcing
The ESC VEET team comprises three Administrative Units, as follows:
- Operations Team;
- VEEC Registry; and
- VEET Compliance.
As part of ongoing VEET program management, resource requirements are routinely reviewed to ensure that staffing levels and skill sets are appropriate, and budgets reviewed and refined. Discussions with the ESC and the DPI as part of the review process for this study indicated that the ESC will monitor the situation, and address resourcing requirements based on any increased workload pose by the uptake of the ceiling insulation activity.
3.2 External installer and installation oversight and compliance
The ESC views the main risks associated with the re-introduction of ceiling insulation to be non-compliance with the VEET Regulations, and the potential for unsafe installations.
A simplified flowchart of the processes and procedures that the ESC is proposing to mitigate these risks is presented in Figure 2.
Figure 2: Ceiling insulation installation process flowchart
|Mandatory Safety Training|
|Post Installation Inspection|
3.2.2 Eligible activities
Installing ceiling insulation is a prescribed VEET activity under regulation 6(2)(a) of the Regulations.
Installing a product in accordance with AS 3999- 1992 published on 16 April 1992 in a ceiling area not previously insulated for a minimum area of 20m2, being a product that complies with the criteria specified in Part A of Schedule 11.12
3.2.3 Service provider accreditation
Individuals and/or companies must be accredited under the VEET scheme before they can create VEECs.
Each candidate AP seeking to create VEECs from ceiling insulation installations must complete the ESC's 'Application for Accreditation Form. On the Form, applicant's need to describe their business type, nominate which types of energy saving activities they intend to undertake under the VEET, and opt-in or out of having their details listed on the ESC's website.
The application form also lists supplementary information that needs to accompany each candidate service provider's application. This includes a letter of undertaking, evidence of authority to sign on behalf of the business, and more details about the business' policies and processes, record keeping and quality assurance systems, and training and contractual arrangements.
The Application for Accreditation Form is available at https://www.veet.vic.gov.au/Public/Public.aspx?id=General
The ESC's VEET compliance team then assesses each AP applicant's risk of non-compliance with the Regulations, and relevant guidelines, based on the information provided in the 'Application for Accreditation Form'.
The risk assessment takes into account anticipated safety and/or rorting risks, and whether undertaking the activity is otherwise independently regulated outside of the VEET (installation activities that are required to be undertaken by a licensed electrician, or gas works that are required to be undertaken by a licensed plumber or gas-fitter, for example).
Items covered in the AP risk assessment process may include:
- Processes and policies – products installation, methods for obtaining the assignment of rights to VEECs, decommissioning practices etc;
- Record keeping systems;
- Quality assurance systems;
- Training and development – installer training regarding their obligations under the VEET scheme and regarding installation requirements specific to the AP's products; and
- Contractual arrangements – APs arrangements with installers.
3.2.4 Compliance meeting
Prior to gaining accreditation and engaging in ceiling insulation activities (and any other prescribed activity considered as being high risk by the ESC), service providers may be required to meet with the ESC's VEET Compliance team. This applies equally to an existing AP who wishes to extend their services under the VEET and become involved in the ceiling insulation activity, or to a new person or company seeking to become an AP for the first time.
The overall purpose of the compliance meeting for the ESC is to gain assurance that each candidate service provider has the proper procedures in place to undertake the ceiling insulation activity in a compliant manner.
Specific topics covered in the meeting are based on the documentation provided by each service provided in their 'Application for Accreditation Form', and are tailored to suit the risk associated with the activity concerned, taking into account the ESC's initial assessment of the application. Broadly, the topics that might be addressed in the compliance meeting include:
- VEET policies and procedures,
- Staffing levels;
- Stock levels and forward contracts;
- Management of installers and subcontractors;
- Employee training;
- Compliance and internal audit measures;
- Key considerations as part of the installation; and
- Data upload processes to the VEET database.
Subject to the outcome of the meeting, the Compliance team will approve the service provider as an AP to commence the activity if satisfied that appropriate standards and procedures are in place; otherwise, the AP must address and rectify any areas of concern.
3.2.5 Mandatory installer training
The VEET mandatory safety training (MST) regime was amended in January 2012 in response to changes to Registered Training Organisation (RTO) course design and availability in Victoria.
Table 2, on the next page, sets out the current eligible MST units.13
Content overview key concepts
CPCPCM2003A Carry Out OHS Requirements; and
|CPCCCM1006A Work Safely at Heights; and|
CPCCPB3014A Install Batt Insulation Products; or
|CPCCPB3027 Install Ceiling Installation|
In addition, the VEET ceiling insulation scheme training regime requires:
- that new APs must provide information regarding installer training, including management arrangements they have put in place to ensure training is completed, as a condition of their accreditation.
- that APs notify the Commission of the method of completion for all trainings within 7 days of that completion, and keep on file records supporting that completion.
- that completion be by either: attending a recognised course at an RTO leading to a certificate for the installer; or,
- recognition of prior learning or 'in house' training by an RTO leading to a certificate for the installer.
3.2.6 Product approval
Schedule 11 of the Regulations specifies the criteria that VEET ceiling insulation products must meet.
A product that complies, or two or more products that, when installed together, comply with the performance requirements of AS/NZS 4859.1:2002 (insulation material) and achieves a minimum winter R-value of 3·5 when measured and labelled in accordance with AS/NZS 4859.1:2002.15
To demonstrate comply with AS/NZS 4859.1:2002 all bulk insulation must have a certificate of test from a registered laboratory, and all reflective foil insulation should have an R-value calculation performed by a suitably qualified person that is endorsed by a registered testing laboratory.16
In order to create VEECs from ceiling insulation installations, each AP must apply to the ESC to have their specific ceiling insulation product(s) approved. The Product Approval Application Form requires a description of the product(s) – including manufacturer, brand, product name and R-value. Documentary evidence which demonstrates that the product(s) meets the product requirements for compliance as set out in the Regulations must also be provided.
The 'Product Approval Application Form' is available at https://www.veet.vic.gov.au/Public/Public.aspx?id=ProductApproval.
3.2.7 Installation requirements (safety and thermal performance)
AS 3999-1992 Thermal insulation of dwellings – Bulk insulation – Installation requirements is the current Standard for bulk insulation installation (with the exception of foamed in situ and reflective foil laminate thermal insulation materials).17 In March 2012, Standards Australia published amendments to AS 3999 that specifically address electrical safety matters in respect of installing bulk insulation. AS 3999 1992 is referenced in regulation 6(2)(a) of the Regulations.
Provisions in AS 3999 1992 of relevance to this study cover the importance of:
- Site inspections prior to proceeding with an installation;
- Perimeter edge restraints and protective barriers for down lights, flues, fans etc. for loose fill insulations;
- Minimum clearances from ceiling penetrations such as flues, fans and downlights;
- General work safe procedures when installing bulk insulation materials; and
- Specific requirements for installation of insulation in roofs and ceilings to ensure the best possible performance from insulation.
Although some jurisdictions also refer to provisions in AS/NZS 3000 2007 Electrical Installations Clause 4.5.23 for installation of insulation around downlights, new clause 2.6.3 of AS 3999-1992 (as amended) provides for equivalent requirements in respect of these clearances.
The thermal benefits of ceiling insulation products will be diminished if the installation is done incorrectly or incompletely. To ensure that ceiling insulation achieves its stated performance over the life of the product it must be installed correctly.
3.2.8 Post installation inspection
Important amendments to the VEET Act, commencing in January 2012, clarified APs' obligations and improved the ESC's ability to monitor and enforce compliance.
The ESC has proposed the requirement that APs must obtain independent auditing of their ceiling insulation installations before VEECs can be created from those installations. The purpose of the inspection is to ensure that the installation complies with the Regulations and relevant electrical safety legislation such as the Wiring Rules (AS/NZS 3000). This requirement would be supported by the new s.19A of the Act.
The ESC is proposing that all ceiling insulation installations be inspected by a qualified, ESC approved inspector before VEECs are created. Whether it is necessary to continue to require inspections for all installations will be reviewed after a suitable time frame.
As currently proposed, the approved inspectors will be drawn from a panel of electrical inspectors licensed by ESV. Such licences are issued by the ESV for the purpose of inspecting regulated electrical installation work. The licences also give credibility to inspectors when assessing electrical installations for safety in addition to inspections carried out to regulatory requirements. The ESC intends to list the company names and contact details of approved inspectors on the Commission's website, along with information regarding which region of Victoria the company operates in.
The ESC has prepared a draft 'Ceiling Insulation Inspection Form', which is essentially a checklist to be used by approved inspectors to carry out the audit. As proposed, the Form will require, among other things, documentation of:
- The inspector's company name, address and phone number along with the Electrical License number;
- Property details specifying the location of the installation;
- VEET compliance matters such as insulation installed area (square meters), average thickness, and presence of unnecessary gaps; and
- Indicators of the electrical safety of the installation.
A copy of the completed Form would be submitted to the ESC and to the AP. If an installation is found to be non-compliant with the Regulations, or with the electrical safety legislation, the ESC may refuse to register VEECs in respect of that installation. The ESV may also choose to pursue a prosecution for any alleged breaches of the Electrical Safety Act 1998.
4 Meta-analysis of the Findings of the HIP Reviews
This section of the report provides an analysis of the project planning, program delivery,
and audit and review processes developed for the implementation and management of the HIP.
4.1 PROGRAM OVERVIEW
The Commonwealth Government HIP was initiated as part of its response and economic stimulus package designed to mitigate the impacts of the Global Financial Crisis (GFC).
The program commenced in February 2009 and ended in February 2010. The program involved insulating ceilings in approximately 1.2 million Australian households. Of these it is estimated some 279,941 households took advantage of the HIP in Victoria.
Phase 1 of the Program ran from 3 February 2009 to 30 June 2009. The owner occupier element of this phase (the Homeowner Insulation Program) allowed eligible owner occupiers to source an insulation installer, pay them directly for installing ceiling insulation and then seek re-imbursement from the Government of up to $1,600. In addition, the Low Emission Assistance Plan for renters provided up to $1,000 in assistance to eligible landlords and tenants for the installation of ceiling insulation. On 1 September 2009 the Low Emission Assistance Plan for Renters and the Homeowner Insulation Program were rolled into the Home Insulation Program allowing owner occupiers as well as landlords and tenants access to up to $1,600 in assistance for the installation of ceiling insulation.
Phase 2 of the Program ran from 1 July 2009 until closure of the Program on 19 February 2010. Under Phase 2, householders arranged for the installation of ceiling insulation by an installer on an Installer Provider Register. On completion of the work, the installer and householder signed a work order form verifying compliance with the HIP requirements, and indicating that the householder was satisfied with the work. The installer was then able to lodge a claim for payment from the Commonwealth.
Owing to a number of administrative difficulties and safety issues encountered in Phase 2, the HIP was terminated half way through its intended schedule. Material program delivery issues associated with the HIP are presented below with a view to highlighting significant lessons learned that can be applied to the re-introduction of ceiling insulation as a certificate creating measure under the VEET.
4.2 HIP Administrative Difficulties and safety and management issues
4.2.1 Framework for the review of issues
To provide a systematic basis for conducting the review of issues and lessons learned from the HIP, Futura's project team prepared an annotated bibliography of relevant publications and web-materials.
This is presented in Appendix A.
4.2.2 Eligible Activities
Initially, eligible insulation products under the HIP included bulk insulation and foil laminate insulation.1 Subsequently a number of safety incidents related to foil insulation and appropriate fastening devices occurred. The first fatality under the HIP occurred on 14 October 2009 when a 25 year-old installer was electrocuted during installation of foil insulation in Queensland.
The Department of Environment, Water, Heritage and the Arts (DEWHA) responded with advisories to registered installers reminding them of their OH&S and duty of care responsibilities. On 1 November 2009 Minister Garrett banned the use of metal fasteners, instead requiring that fastening of foil insulation was to be undertaken using taping or fastening with nylon or plastic staples (or any other non-metallic means).2 In November 2009, the DEWHA also implemented an electrical inspection program for homes with foil insulation installed under the HIP. Results of inspections conducted in Queensland by Price Waterhouse Coopers (PwC)3 on 10% of all homes that had foil insulation installed under HIP found that 3% of these had an electrical safety risk related to the installation. Significant numbers of these homes were also found to have a pre-existing electrical safety issue before the installation of the insulation under the HIP.
By 4 February 2010, a total of four installers had died while installing insulation in ceilings. Three of these fatalities occurred due to suspected electrocution while installing foil insulation. On the 9 February 2010 the Minister announced the suspension of the use of foil insulation from the HIP.4 Initial findings by the Queensland Electrical Safety Office int</p>o the deaths found that metal staples used to fix foil insulation to the ceiling structures may have pierced a live electrical cable causing the insulation to become energised, despite metal fasteners having been banned three months earlier.
Following advice from industry bodies and the Queensland Electrical Safety Office on 10 March 2010 the Commonwealth Government committed to fully fund the removal of foil insulation, or the installation of safety switches in all homes that have had foil insulation installed under the Program.
4.2.3. Industry capacity to meet demand
On average, ceiling insulation is installed in approximately 150,000 new dwellings and retrofitted to some 50,000 existing dwellings each year. 23 In its first year of operation the HIP rebate scheme resulted in ceiling insulation retrofits being undertaken by some 1.2 >million households, equivalent to a six-fold increase in the total number of installations. Such a dramatic increase in demand for ceiling insulation products stretched the capacity of the industry well beyond previously experienced levels and management capabilities. As a consequence a number of unforeseen, and undesirable outcomes resulted. Notably, the rapid growth in demand for labour (a goal of the program in the context of the global financial crisis) led to some poor outcomes in terms of opportunistic business practices, reduced levels of staff training, and non-compliant, unsafe insulation installations.
In large part the rapid growth in demand was driven by changes to the program design and in particular the differences in how rebates were paid under the two Phases of the program.
Under Phase 1, payments were made directly to householders. This provided the DEWHA with a degree of assurance that the installations had been completed. The DEWHA also required householders to obtain a minimum of two quotes and pay installers upfront. In this phase of the program the lack of any significant issues could be related to the lower volume of claims, the requirement to obtain quotes, and the likelihood that householders who took up the program in the early stages were more engaged consumers that took a greater interest in the quality of the work undertaken.
However, in February 2009 the Phase 1 rebate was replaced by the Phase 2 direct payments to installers approach in order to ensure the broadest possible take up and be more consistent with the economic stimulus driver. This change had the effect of dramatically increasing take up as installers had no limit on the number of claims they could submit.
Once installers started driving demand an issue that arose was that the insulation industry was unable to provide sufficient locally sourced insulation materials of sufficient quality to support the program roll-out. A risk assessment prior to the program roll-out, conducted by Minter Ellison, 24 had noted that the industry's capacity to produce and deliver sufficient quality materials and installations may be inadequate, with resultant flow on supply chain >effects to the supply chain and the capability of the installer workforce.
To mitigate this issue the program design allowed for imported products which met the relevant Australian Standard AS 4859.1.2002.
Recommendations on industry capacity put forth by the reviews of the HIP included in this study focussed on:
- Program design features to control and manage demand should have been implemented; and
- The need for implementing agencies to also consider the impact that a ceiling insulation incentive program may have on the local insulation industry and industry participants' and consumers' behaviour.
4.2.4. Program management and resourcing issues
The significantly higher than expected take–up rate for the program created significant capacity, resourcing and program management issues for the DEWHA. The DEWHA also had little experience in running a program of this size, and nature, and did not have staff with detailed knowledge of the insulation installation industry. Further, management of the program was undertaken by a division with significant other responsibilities.
Staffing issues were further exacerbated by high staff turnover coupled with an inability to recruit and train staff quickly enough to replace those who departed.
Minter Ellison's risk assessment further indicated that the HIP raised significant capacity issues for the DEWHA. Consequently, the DEWHA put in place various mitigating strategies, including the use of private sector resources to fill gaps and augmenting staffing as the program developed and rolled out. These were in part addressed through the design of the business model, internal secondments, external contracting and partnership arrangements and internal restructuring in the DEWHA. The DEWHA also established a Project Control Group (PCG), chaired by the DEWHA and involving the Office of the Coordinator-General (OCG) in the Department of the Prime Minister and Cabinet (PM&C), Department of Employment, Education and Workplace Relations (DEEWR), Medicare and the Australian Tax Office (ATO), which had oversight of implementation, monitored risks and provided advice, support and external scrutiny on program design and delivery. The PCG was also viewed as a mechanism to supplement expertise.
Despite early efforts and later enhancements by the DEWHA (such as the implementation of the PCG) and additional staffing above the levels originally envisaged, program management infrastructure and expertise at DEWHA were not sufficient to support the demands placed on them, and hence capacity issues remained significant throughout the life of the HIP.
A further contributing factor was the lack of internal senior executive oversight and project management skills and capabilities to support and implement a program of this kind. Given the profile and significance of HIP the program should have had considerable senior management oversight.
Another contributing factor was that the HIP was rolled out over a very short timeframe. The DEWHA had preferred a longer rollout period due to weaknesses in the capability of its IT systems, a shortage of staff office space, recruitment/training and challenges and serious backlogs with other commitments. However, a shorter rollout was required by the Government in order to meet the stimulus objective of the program.
As noted by the program reviewers, the program management and resourcing shortfalls experienced by the HIP could have been mitigated by:
- Ensuring that sufficient numbers of appropriately trained staff were available to implement the program, from the time of program inception (this can be more of an issues for demand driven where capacity and resources may need to be moderated according to demand levels);
- Assigning higher level senior management to oversee the roll-out of the program until such time as program delivery had become routine; and
- Ensuring that sufficient time was allowed for program design and implementation of the necessary capacity building efforts and IT systems required to support the program such that these systems were in place at the time of program inception.
4.2.5. Product approval and standards
As noted above in Section 1.1.13, from the outset of the HIP concerns were expressed in both formal risk assessments and from industry feedback about the capacity of the local industry to produce sufficient insulation materials to support the anticipated take-up of the program.
In addition to allowing for imported products which met the relevant Australian Standard, the DEWHA also published an 'Approved Products List' which identified all products certified or tested successfully against the Australian Standard. To be included in this list the manufacturer or distributor of the product was required to provide DEWHA with a certificate from an accredited or recognised laboratory or testing facility certifying that the product had been tested and had been found to meet the standard.
Despite these requirements, concerns were raised by industry that the testing regimes still allowed substandard products to enter the market because of inconsistent sampling and certification techniques and ineffectual compliance mechanisms. Further, while these products may have met the Australian Standards for R-value ratings, concerns were expressed that they may have been unfamiliar to local workers and more difficult to handle, hence resulting in a lower quality outcome.
Recommendations emanating from the reviews of the HIP included in this study, as regards insulation product standards included:
- An independent and dedicated facility should be established to research insulation systems and advise on insulation policy. This should be regarded as an essential part of any future government initiative to improve home insulation;
- Consumers could have also been provided with greater certainty about the energy savings that are delivered through home insulation and other energy efficiency measures ;
- The determination of eligible products should be the responsibility of a Technical Committee that comprises people with the requisite technical and/or scientific skills, and who are not aligned to any commercial provider of insulation products. Service Providers should be contractually bound to install only those insulation products on a list of products approved by the Committee; and
- Only accredited insulation products should be specified under a ceiling insulation rebate scheme .
4.2.6. Installer training
During Phase 1 of the HIP, there were no formal training and accreditation requirements that installer were required to comply with. However, in response to industry concerns about the absence of a formal training regime and the capacity of installers to deliver the program the DEWHA agreed to implement formal installer training and accreditation requirements.
From June 2009 to February 2010 an installer register which introduced a set of accreditation requirements for installers was introduced. In order to register with the HIP, insulation installation company's had to make an online declaration that job supervisors had completed OH&S induction training, and that the registrant, either held a relevant trade qualification, had prior industry experience, or had completed the new insulation training package.
During this period, and in response to industry concerns, the DEWHA contracted the Construction and Property Services Industry Skills Council (CPSISC) to develop a national training package targeted at new and existing installers without any existing formal training. Training and support materials were released to installers and training bodies in late June ahead of the main program launch. The CPSISC training support materials covering the following national competency standards:
- CPCCOHS2001A Apply OHS requirements, policies, and procedures in the construction industry;
- CPCCCM1006A Work Safely at Heights;
- CPCCPB3014A Install batt insulation products; and
- partial coverage of CPCCPB3015A Install acoustic and thermal environmental protection systems.
The CPSISC training program was in place before the 1 July 2009 start of Phase 2 of the HIP and it is estimated that over 3,700 installers participated in insulation training delivered by RTOs over the course of the program. However, despite the take up of training offered by the RTOs, concerns were expressed about the rising number of safety issues that resulted from inadequate supervision of untrained and inexperienced installers in the industry. Compliance with the training package was not a mandatory requirement until much later in the HIP.
In August 2009, the DEWHA also released the Construction Industry Pocket Book: Resource for Installers of Ceiling Insulation, a booklet summarising key information used in industry training including safety information and warnings. The Pocket Book supported the training materials that had been available from the DEWHA website since late June. From commencement of the program all training resources highlighted the need to turn off or isolate power to the building at the main switchboard before starting any work, however, this was not a mandatory requirement.
In response to the fatalities that occurred in late 2009, on 17 December 2009 the Responsible Minister Peter Garrett announced that from 12 February 2010 mandatory training requirements would apply to all installers and not just supervisors. Installers were required to provide evidence of
- A trade specified competency, such as a relevant licence or trade certificate;
- Training qualification from an RTO under the HIP; or
- Two years experience, and a statutory declaration or statement of prior industry experience.
Prior to this time individuals new to the industry could participate in the HIP without any experience, qualifications or insulation specific training.
In summary, based on commentary made by the reviewers of the program undertaken for this study:
- The HIP should have ensured that all personnel involved in installation, including supervisors as well as installers, be properly trained and been made aware and fully understood the risks associated with installing insulation from program inception;
- As noted by the Insulation Advisory Panel future ceiling insulation programs should provide for two levels of installer training and accreditation; Installer Supervisor and Insulation Installer;
- to become an insulation installer practitioners should have;
- proof of completion of a certified training program (see recommendation on training), and
- at least six months' experience working with a registered Installer Supervisor,
- to operate as an Installer Supervisor the practitioner must have an appropriate mix of:
- at least 2 years' installation experience,
- proof of completed training, and
- a reference from an insulation manufacturer or distributor of insulation product.
- to become an insulation installer practitioners should have;
At a broader level, the implementation of a strong and consistent regulatory framework across the states and territories, building on the approach taken by South Australia (SA) for a licensing regime for insulation installers was also recommended. SA was the only jurisdiction at the time of the implementation of the HIP with an existing licensing regime for ceiling insulation installers. Licenses were issued to building work contractors meeting the requirements of the Building Work Contractors Act 1995 administered by the Office of Consumer Affairs and Business Services (OCBA). This licensing included requirements around business knowledge, financial resources, fit and proper person, and supervisor registration. Following the announcement of the HIP, the SA Government put in place a standalone category of license for insulation installers which incorporated a process to enable new entrants to be licensed appropriately. In order to gain licensing and registration accreditation, installers must have undertaken an appropriate level of safety training as part of their trade licensing requirements.
4.2.7. Pre-installation inspections
On 1 November 2009 the Responsible Commonwealth Minister announced changes to the guidelines to address safety and consumer protection issues concerning insulation that had already been installed under the program. These changes were prompted after the first fatality under the HIP occurred on 14 October 2009 when a 25 year-old installer was electrocuted during installation of insulation in Queensland. Safety issues had also been raised by industry representatives such as the Master Electricians Australia and the Aluminium Foil Manufacturers Association. Amongst other matters, the revised program guidelines introduced the requirement for installers to complete a mandatory risk assessment for every site before installing insulation.
The PwC report noted that significant numbers of homes inspected had a pre-existing electrical safety issue even prior to the installation of insulation under the HIP. Hawke has also reported on concerns about safety and fire risks regarding insulation installed prior to the HIP.1
Recommendations emanating from the reviews of the HIP regarding pre-installation inspections were primarily made by the IAP. In its review of pre-installation inspections the IAP has recommended that:
- An installation contractor should be responsible for preparing an initial assessment of insulation requirements and potential installation issues (including the hazard inspection report) for a householder requesting a quotation. The report should be signed by a supervisor, the installer and the householder in order for the rebate to be claimed; and
- The assessment be undertaken before any installation work is allowed to proceed in roof cavities. A pre-installation electrical safety check should be required in old dwellings.
4.2.8. Risk assessment and management
Risk assessment and management were fundamental elements of the HIP. As noted, from the outset Minter Ellison were contracted to develop a comprehensive risk assessment to identify and manage the risks associated with the delivery of the HIP. A total of 19 extreme and high level risks that could adversely impact on the program were identified at this time. Management plans put in place to mitigate these risks reduced all but six risks to medium or low.
Risks that remained ongoing issues, irrespective of the model and which had an impact on the delivery of the HIP were:
- Industry capacity to respond to the increase in demand for installations;
- Quality of installations and compliance by installers;
- Capacity to maintain and control training mechanisms for skilling the installer network;
- Potential for increases in average costs as demand increases; and
- Employment opportunities for industry workers on the conclusion of the program.
Mechanisms to address and mitigate the risks implemented by the DEWHA included: the fraud and compliance program; establishing a registration regime; developing a national training program; monitoring changes in the risk profile and altering the requirements of the program to address those changes.
Risk management was also a standing agenda item at the DEWHA and PCG meetings, with a report on the updated risk assessment, reflecting ongoing risk mitigation strategies, presented and discussed at each meeting.
The DEWHA's response to the management of risks was heavily influenced by the tight timeframe given for developing and implementing the HIP due to the Government's economic stimulus focus objectives. Consequently, some of the controls and mitigation strategies which could have been expected to have been implemented as part of HIP were not in place.
Further, the risk register that was being maintained and monitored by the DEWHA should have been provided to Minister Garrett earlier than February 2010 for his consideration and government action.
Some of the key recommendations regarding formal risk assessment and management procedures from the experience with the HIP include:
- Effective and timely risk assessments should have been implemented, risk mitigation action plans put into place and regular updates provided to the Responsible Minister(s) from the outset of the program;
- All key stakeholders, including government, should clearly understand and accept the level of inherent risk and potential consequences of risks in the program design; and
- Developing future policy and programs in close consultation with industry, state and territory regulators and service delivery agencies so that practical implementation risks are identified and mitigated early in the planning stage.
- Section 5 presents an itemised description of aspects of the program which, if implemented as proposed, appear to represent little or no risk to the re-introduction of ceiling insulation for the creation of VEECs, or alternatively present an 'area of concern'. Recommended mechanisms to manage potential areas of concern are also presented.
Outcomes of the Due Diligence Risk Assessment
Section 5 presents an itemised description of aspects of the program which, if implemented as proposed, appear to represent little or no risk to the re-introduction of ceiling insulation for the creation of VEECs, or alternatively present an 'area of concern'. Recommended mechanisms to manage potential areas of concern are also presented.
5.1. Issues addressed in our review
A synopsis of the topics covered in the due diligence review presented in Section 5.2 below follows:
- Government and industry capabilities and capacity – program management and ESC resourcing, and industry capacity to meet demand;
- VEET operational processes and procedures – eligible activities, service provider accreditation, and product approval;
- Ceiling insulation installation – installer training, and installation requirements for bulk insulation;
- Installation compliance – pre-installation inspection, and post-installation inspection; and
- Governance – risk management plan.
5.2. Key Findings
Table 1 summarises the overall ratings for each of the topics of relevance covered in Futura's 'Due Diligence' review of the DPI's proposed ceiling insulation program. An assessment rating of 'no significant risk' indicates that the current program design proposed by the DPI and the ESC does not warrant any significant change. A rating of 'area of concern' indicates that changes may be required to mitigate identified risks.
The results pertaining to the review topics rated as 'area of concern' below are discussed in more detail in Section 5.3.
DD review topic
Reasons for DD assessment rating
Program management and ESC resourcing
No significant risk on:
The VEET has been operating successfully since 2009, giving the ESC sufficient time to develop and fine-tune the skills and management capabilities to resource a subsidy based energy efficiency measure such as the ceiling insulation activity.
Industry capacity to meet demand
No significant risk on:
The ESC currently tracks and documents the number of activities for each eligible VEET measure on an annual basis.
DPI has developed forecasts of the anticipated annual take-up of ceiling insulation over the next three years. DPI is able to compare annual ceiling insulation activity data from ESC against forecast take-up and make an assessment on the likely impacts on the insulation industry's capacity to support ceiling insulation installation activity.
While current efforts by the DPI to assess industry capacity to support the ceiling insulation activity poses an acceptable level of risk, there may be merit in DPI undertaking frequent reviews.
A recommendation in regards more frequent DPI reviews of industry capacity to support the activity is provided as an additional program refinement in the next section.
Area of concern regarding:
Refer to Section 5.3.1
Service provider accreditation
No significant risk on:
The VEET includes a rigorous audit and compliance program and has systems and processes in place for the assessment of firms applying for accreditation in the scheme.
Candidate service providers are required to provide data in support of the capacity and capabilities to install ceiling insulation to the standards required by the Regulations.
A risk assessment which examines each service provider's track record is undertaken by the ESC on every application for accreditation.
This is strengthened by the requirement for meetings between the ESC's compliance team and prospective ceiling insulation APs before they begin undertaking the activity.
During 2010-11 the Commission developed additional audit processes focusing on higher risk service providers.
These processes led to several investigations during the financial year, which resulted in the suspension of three firms' accreditation under the VEET scheme, sending a clear signal to the market that compliance actions will be taken in response to fraudulent or non-compliant performance.
No significant risk on:
Thermal performance criteria are established by the Regulations, and must the requirements of AS/NZS 4859.1:2002.
Each AP must provide test certificates from a laboratory accredited by the National Association of Testing Authorities (NATA) for the relevant test methods in order to create VEECs from the insulation products they install.
The product approval process places the responsibility on APs for ensuring that products they install meet the requirements specified in the Regulations.
Area of concern regarding:
Refer to Section 5.3.2
Area of concern regarding:
Refer to Section 5.3.3
Installation requirements for bulk insulation
No significant risk on:
Standards Australia has completed the revision of AS3999 (Thermal insulation of dwellings - Bulk Insulation - Installation requirements).
A complete review was made of all ceiling safety requirements and the Standard now contains upgraded and new sections related to cabling, lighting and on-site safety planning and work processes. The revised standard was published in March 2012.
The Insulation Council of Australia and New Zealand (ICANZ) which represents about 70% of the suppliers servicing the market recently released a Guide for the safe installation of insulation with comprehensive instructions supported by illustrations on how to safely install insulation in ceilings (and walls and floors). The guide gives advice on completing a safe work assessment for each job, and specific guidelines for safely installing insulation around downlights, electrical appliances, and cabling.
As noted, training related to general OHS, installation and insulation thermal performance are now mandatory ESC requirements for participation in the VEET scheme. This training will drive on-going improvements in service providers' required competencies.
Area of concern regarding:
Refer to Section 5.3.4
Risk management plan
No significant risk on:
The ESC prepared a Risk Management Plan and Risk Register at the commencement of the VEET scheme, that considered the risk associated with all VEET prescribed activities (including ceiling insulation).
Subsequently the ESC conducted a safety risk assessment on ceiling insulation specifically, which led to the inclusion of the mandatory safety training units.
5.3. Areas of concern
5.3.1 Eligible activities
As part of this review, the DPI and the ESC have investigated two main issues in regards to the status of foil insulation within the definition of ceiling insulation as a VEEC creation prescribed activity under the VEET, as follows:
- Should foil insulation be allowed as an eligible activity within the definition of ceiling insulation under the VEET; and
- In the event that pre-existing foil insulation is discovered prior to the installation of batts clarity is required in the VEET as to whether this would be considered an 'uninsulated' home and therefore whether certificates could legitimately be created once bulk insulation is installed.
Eligibility of foil insulation
Figure 3 provides a summary of the insulation requirements under the VEET scheme.
As specified, insulation is to be installed in accordance with AS3999-1992 which covers installation requirements for bulk insulation only and therefore could be interpreted to imply that only bulk insulation is eligible
While the VEET Regulations do not explicitly specify whether bulk or foil insulation can be installed, they do require compliance with AS 4985.1: 2002 which states that a 'minimum winter R value of 3.5 when installed either on its own (one product) or together (two or more products). While it is unlikely that foil insulation on its own could achieve a winter R-value of 3.5, this requirement seems to imply that the inclusion of foil insulation could potentially be eligible under VEET, as a complementary material to bulk insulation.
The DPI and the ESC should consider providing greater clarity over the current status of foil insulation in the VEET by issuing an Explanatory Note stating its position on foil insulation. Given the safety issues noted earlier and concerns over the performance characteristics of foil insulation in Victoria it is recommended that installing foil insulation be explicitly excluded from the VEET scheme, at least for the time being.
If the DPI decides to include foil insulation as an eligible activity under the VEET at some future date, then it is recommended that:
- A training regime be developed, possibly with the assistance of the Aluminium Foil Insulation Association, to ensure APs are properly trained in the correct installation procedures, safety and OHS requirements concerning foil insulation; and
- The ESC's post-installation inspections include a safety and compliance check for foil insulation.
Pre-existing foil insulation
AP's may encounter situations where homes have some type of pre-existing foil insulation installed in the roof space and no other form of bulk insulation. In cases where foil insulation is already installed the home would most likely have reasonable summer thermal performance characteristics but the winter performance is likely to be somewhat less than an R-value of 3.5.
Section 6 (2) of the Regulations defines a prescribed activity as 'installing a product…in a ceiling area not previously insulated'. This requirement implies that the presence of any type of insulation, including foil insulation materials, would make the house ineligible to be insulated under VEET
The eligibility requirements of the South Australian REES scheme provide a similar, but more explicit definition, of the eligibility of homes with pre-existing ceiling insulation. The REES Code specifies that ceiling insulation "…product must be installed in a ceiling area (or part of a ceiling area)….which has not been previously insulated. This excludes topping up existing insulation (that is, installing insulation on top of existing insulation)."
The DPI could clarify the interpretation of the Regulations by providing a more explicit definition of the eligibility of homes with pre-existing foil insulation. This could be addressed by issuing of an Explanatory Note that explicitly states that homes with pre-existing foil insulation are considered to have pre-existing insulation and therefore are excluded under the VEET.
Where pre-existing foil insulation exists (which would make the house ineligible to be insulated under the VEET), and given that the R-value of foil insulation is typically low, the DPI could consider including a 'top-up' insulation activity under the VEET to provide incentives to upgrade the insulation of an already insulated home to a higher level of insulation. Since the energy and emission saving benefits achieved from topping-up the insulation in an already insulated home are lower, the VEECs that could be created for such an activity would need to be proportionately reduced. This would require an amendment to the Regulations to define a new prescribed activity.
Should the DPI pursue a 'top-up' insulation activity under the VEET, detailed analysis of potential risks and safety hazards associated with installations over pre-existing foil would be a high priority. Further, to manage any such identified risks appropriately, there will be a need for the DPI to give additional consideration to pre-installation inspections, and other safety mitigation strategies.
5.3.2. Installer training
The recently mandated coursework training requirements for the ceiling insulation activity correctly cover off two very important areas of competency for insulations installers. The first competency area deals with general OHS matters and OHS related to working at heights. Some choice is provided to installers on training in general OHS in that they may elect to enrol in either CPCCOHS2001A Apply OHS requirements, policies, and procedures in the construction industry or CPCPCM2003A Carry Out OHS Requirements and CPCCCM1006A Work Safely at Heights.
Two alternative courses are offered in the second area of competency related to specialist knowledge of insulation installations - CPCCPB3014A Install Batt Insulation Products; or CPCCPB3027 Install Ceiling Installation.
From a brief review of the content of these courses (undertaken to ensure the appropriateness of the content) it has become apparent that there may be the need for a minor review of the mandated training requirement. Effectively, CPCC OHS2001A is a prerequisite for:
- CPCCCM1006A Work Safely at Heights;
- CPCCPB3014A Install Batt Insulation; and
- CPCCPB3027 Install Ceiling Installation.
It is recommended that the ESC consider revising the relevant Explanatory Note1 to avoid any confusion. CPCCOHS2001A should remain as the installers must complete it prior to undertaking the specialist courses on working safely at height, and installing batt and ceiling insulation. The inclusion or exclusion of CPCPCM2003A needs further investigation to determine if it adds relevant new content or complementary competencies to the suite recommended above. This will ensure that installers aren't needlessly 'out of pocket' for courses that add little or nothing to their knowledge and capabilities.
In contrast to the specific requirements for training via coursework, currently there are no requirements under the VEET for APs to have any work experience, nor does the VEET specify supervision requirements for relatively inexperienced installers. In order to enhance the level of safety of ceiling insulation activities under the VEET there may be some merit in specifying minimum work experience and AP supervisory requirements.
As noted previously the IAP has recommended that future ceiling insulation programs provide for two levels of installer training and accreditation; specifically an installer supervisor and an insulation installer. To become a supervisor an installer would require a combination of 2 years installation experience, proof of completed training, and a reference from an insulation manufacturer or distributor of insulation product. To become an insulation installer an AP should have completed a certified training program and have accumulated at least six months' experience working with a registered installer supervisor as an apprentice.
It is recommended that the ESC consider adopting these, or similar, requirements as part of the training and accreditation requirements for ceiling insulation installer APs.
5.3.3. Pre-installation inspection
Installing insulation in most dwellings requires the installer to take precautions when insulating around electrical cables built-in appliances, gas flues and other electrical equipment. Installing ceiling insulation, from within an attic space, can present hazards which the installer should make a personal assessment of and take appropriate measures to ensure their safety.
As noted, AS 3999 1992 Section 4A.3 requires risk assessments to be carried out by a person with competencies in assessing electrical risk from the installation of insulation. However, within the VEET ceiling insulation activity compliance and auditing processes at present, there does not appear to be either:
- A guideline specifying the type of information to be documented as part of the assessment to ensure that all risks are assessed; or
- A check procedure to ensure that a pre-installation risk assessment has actually been carried out.
The ESC could potentially address these deficiencies by developing an Explanatory Note describing the purpose of the pre-installation risk assessment, along with a form prescribing the types of risks to be assessed. Such a form could assist installers (particularly those with less experience) to identify and address hazards and thus reduce the risk of injury to themselves (or householders). The form would need to be completed prior to each installation, and signed by all installers on-site. The ESC could then either require that the form be submitted by APs to the ESC as part of each installation, or simply reserve the right to request copies of the completed forms for each installation. In the event that an AP was already using a similar system to identify, document, and address hazards, they could be allowed to continue to do so – subject to acceptance of the systems and processes by the ESC. Such systems and processes could be assessed as part of the compliance meeting.
Appendix B provides reproduction of the pre-installation hazard inspection templates developed by DEWHA for the HIP in association with the mandated requirement for post-installation audits of ceiling insulation under the program.1 A second example has been reproduced from the Government of SA for use by the state's tradespersons who install insulation and are licensed by the Office of Consumer and Business Affairs (OCBA). The template2 was developed by the SA OCBA in its role in implementing product safety regulations and guidelines that encourage markets to deliver safe products to consumers, and as the regulator for building work contractors including insulation installers.
5.3.4. Post-installation inspection
The ESC is considering introducing a requirement that APs obtain an independent audit of their ceiling insulation installations to ensure compliance with the Regulations (and relevant electrical safety legislation).
Subject to approval of the proposal, all ceiling insulation installations will be inspected by a qualified, ESC approved inspector before VEECs are created. It is understood that the approved inspectors for compliance audit of the VEET ceiling insulation activity will be drawn from a panel of electrical inspectors licensed by ESV.
From a review of the proposed post-installation requirements as outlined in a 'checklist' prepared by the ESC (currently in draft format), a key focus of the inspection is understandably on consumer safety – an area in which the ESV inspectors have significant expertise and experience. While this is understandable, the ESC may wish to consider thermal performance in greater detail at the time of the inspection. Thermal performance is also a regulated requirement, and the quality of the installation will impact significantly on the R-value. Any inspection in this regard would be a qualitative examination not related to VEEC creation, but rather could serve to identify APs that are carrying out sub-standard work.
Because attainment of the regulated thermal performance (R-value) required by the Regulations will be strongly influenced by the quality of the installation it is recommended that consideration be given to expanding the post-installation checklist to require more detailed commentary on items such as:
- are batts fitted snugly without gaps around ducts and pipes,
- are corners of walls, ceilings and floors are properly insulated (as these are areas where heat leaks most often occur),
- Thermal bridges
- is the building frame acting as a thermal bridge,
- Compression; and
- is the insulation compressed and is there sufficient space for it to retain its normal thickness,
- Vapour barriers;
- is a vapour barrier present and is it properly installed.
Development of the specifics could be undertaken in consultation with Sustainability Victoria.
Should more detailed examination of the thermal performance of the ceiling insulation installations be adapted, it may be necessary to provide the ESV inspectors with specific instruction and training in the topic. Again it would be expected that Sustainability Victoria could assist in this area.
6.Conclusions and Additional Program Refinements
Section 6 concludes the report with a presentation of the key conclusions regarding potential risks associated with the implementation of a ceiling insulation program and recommendations to resolve outstanding issues.
The outcomes of the 'Due Diligence' review are generally in support of the re-introduction of ceiling insulation as a VEEC creation mechanism under the VEET. Concerns with the proposed VEET ceiling insulation procedures and processes arising from a comparative analysis of the Commonwealth HIP scheme and potential program refinements based on this analysis were presented in Section 5.
6.2. Additional program refinements
Potential non-risk related program refinements based on our experience in the design and implementation of energy efficiency measures such as the VEET ceiling insulation activity and our interactions with the DPI and ESC during the course study follow:
- Track industry capacity to meet demand. As noted in Table 1, the ESC currently tracks and reports annually on the number of activities for each eligible VEET measure. This provides the ESC with a basic level of program activity data to allow a broad assessment to be undertaken of the potential impacts on the insulation industry's capacity to support the program. A recommended program refinement is for the ESC to conduct more frequent, say quarterly or half yearly, reviews of the program's performance. These reviews could involve more frequent tracking and monitoring of ceiling insulation take-up against forecasts, and regular consultation with the insulation industry. This activity would assist the DPI in early identification of any potential product supply, quality and safety issues;
- Implement a public awareness raising and communication strategy on ceiling insulation. It will be important for the DPI to differentiate the VEET ceiling insulation initiative from the Commonwealth HIP scheme and support renewed consumer confidence in ceiling insulation. Given that the fallout from the Commonwealth scheme may still be top of mind for many consumers, and has caused serious inconvenience to many householders, it will be important to ensure consumers are well aware of the differences between the two schemes. Such a campaign would also aim to restore consumer confidence in the industry. A feature of the communications strategy would be to incorporate an education component that provides consumers with better and more accessible advice about appropriate insulation for their particular circumstances. Implementation of a community awareness campaign is also a recommendation put forward by the IAP, and one that is supported by this review.
- Publish list of ineligible products to increase consumer information. The ESC maintains a register of VEET approved ceiling insulation products that are eligible to create VEECs. The list is available to consumers upon request. In addition to the list of approved products, the ESC could also produce a list of products that have been submitted for approval but have been deemed to be ineligible. Consumer access to an ineligible products list would add another layer of consumer protection and help raise consumer awareness of the types of products to avoid. The list of ineligible products could also be valuable to owners and builders of new homes who are looking for insulation products and wish to avoid purchasing and installing inferior products; and
- Survey installers to assess if the new training regime is on target. Insulation installers are required to complete a minimum level of mandated coursework in order to meet the minimum accreditation requirements to become an insulation product AP. To achieve the required level competency installers will need to make a significant investment of their time and financial resources. The ESC could consider undertaking routine surveys of installers to obtain feedback on the quality and relevance of the coursework being offered. This will ensure that trainees are receiving the best value for money possible for their investment in training. There are numerous approaches to collecting this sort of information. For example, installers could be requested complete and submit a feedback survey form at the conclusion of each training session. The ESC could also undertake interviews with insulation industry manufacturers and associations. The feedback from these sources could subsequently be used to refine and update the mandated coursework training.
Page last updated: 24/06/20