The rising number of programs and policies to incentivise energy efficiency retrofits in residential property is great news, but there’s a couple of big problems. The admin and extra work required of tradies to qualify for these schemes are forcing some to turn jobs away, and the complexity and duplication of programs is confusing for all involved.
According to president of the Energy Efficiency Council and chief executive officer of MAC Trade Services, Merrily Hunter, there’s a shortage of tradespeople with the required certifications across all states where schemes such as heat pump subsidies or residential retrofit subsidies are operating.
And for the tradies that are appropriately certified, the overwhelming paperwork and add-ons in terms of site works just don’t stack up. Some are leaving jobs behind as a result.
“Many tradies have backed out of these schemes because there is too much administration,” Hunter tells The Fifth Estate. “The schemes are financially complex.”
Data on trade workforce skills shortages are also likely to be under-reported, she says.
“All of our workforce calculations are based on active licensed professionals and assumes 100 per cent of those people will participate in these programs.”
This is not the case, however, as most tradespeople are either solo operators or small businesses, with an abundance of work of every kind, not just retrofit schemes, Hunter says. So work that comes with a raft of additional requirements is not going to be everyone’s top priority.
Risk versus rewards
Some tradies also have concerns around equipment manufacturers, suppliers and warranties – who’s going to be left holding the bill if the equipment has defects or the supplier or manufacturer has gone bust or vanished?
“In our experience, for every five tradespeople onboarded into these programs, only two usually stay in them,” Hunter says.
So work that comes with a raft of additional requirements is not going to be everyone’s top priority.
Trade businesses also have issues with recruitment and retention, and churn rates are high.
In addition, the requirements of subsidy programs often prevent these businesses from using the schemes as an opportunity to build hands-on experience for second and third year apprentices. If a fully licensed tradesperson is required, an apprentice can’t do the work.
“The legislation is not creating pathways for apprentices to come through – but it could be creating those pathways.”
Solar and battery installation, for example, may also stipulate that the tradesperson needs to undertake additional tasks, such as an inspection of the fire safety system installation.
Hunter says that while these are “great ideas” on the policy page, the extra work can increase the tradie’s liability beyond their usual risk burden, as well as adding more work to fixed price jobs.
“For every additional requirement, such as a geotagged photo or recycling evidence on site, it erodes the program rebate as it adds more compliance costs and more time on site.”
Policy makers need to speak to tradies
These problem stem from policy designed without engaging the people needed to put it into practice.
Hunter says we need tradespeople to be engaged in the development and design of retrofit policies.
ACT insulation policy gets it
She points to the recent ACT legislation for insulation retrofits as an example of how to get it right. A representative of the installers was included at the table, and the result was a policy with activity specifications that did not meet significant pushback from industry.
“Workforce and trades engagement with building policy is what we need, as well as robust warranties for equipment.”
Streamlining the funding flow
Another area where policy could use some finessing is reducing the amount of duplication going on. In Victoria, for example, heat pump upgrades are currently eligible for Victorian Energy Upgrade rebates, Solar Victoria rebates, small-scale technology certificates (STCs), and possibly also the recently-announced Australian Renewable Energy Agency (ARENA) postcode-based electrification program.
Hunter says the multiple schemes are costly to operate and “confusing for residents and trades alike”.
“I’m all for giving consumers subsidies to make the switch to energy-efficient and all-electric, but there needs to be some kind of consolidation. I would recommend harmonisation and consolidation where possible to cut out unnecessary or duplicative paperwork and admin costs.”
This could be in the form of one national energy efficiency program that everyone could access, which acts as a single point for demand response-based electrification subsidies. There could be a target set each year, gazetted out to 2045 to reduce the risks associated with election cycle tinkering. Within this national scheme, priority groups including renters could be included as a sub-target, Hunter says.
“A harmonisation across states would cut out so much unnecessary paperwork and admin costs.”