OFT Issues Call for Evidence for Home Insulation Market

Jack Humphrey, Regulatory journalist
April 09, 2012 /

The OFT has issued a Call for Evidence to understand whether the home insulation market is working well for consumers.

The OFT has been working with the Department of Energy and Climate Change (DECC) to seek to ensure energy efficiency markets can work as effectively as possible when the Green Deal policy is implemented.

The OFT is interested in hearing from manufacturers, distributors, trade bodies, consumer groups and others, to understand whether there are aspects of this market which may be restricting the entry of new competitors, limiting consumer choice or keeping prices artificially high.

The market for home insulation has a turnover of around £700m per year and this is expected to grow with the increased focus on household energy efficiency in the Government’s Green Deal.

The OFT has received submissions suggesting that the market does not work as well as it should. One concern raised, for example, is that agreements between businesses at different levels of the supply chain can lead to competitors being unable to source as much insulation as they want, thus restricting supply to consumers.This call for evidence will help the OFT to get a clearer picture of any problems in this market, and to determine whether further work in this area may be required.

The OFT also has concerns about the high volume of consumer complaints in the market. Last year, the Consumer Direct advice service received nearly 3,000 complaints about solid and cavity wall insulation. As part of a wider project aimed at improving the way the energy efficiency sector works for consumers, the OFT will investigate the issues raised by consumer complaints and monitor consumer law compliance across the sector more widely.

Nisha Arora, Director in the OFT’s Services, Infrastructure and Public Markets Group, said: “The Government’s proposed Green Deal and Energy Company Obligation policies are likely to increase the take-up of energy-efficiency measures, so it is important that we examine the home insulation market now to ensure that it is working well for consumers.”

The OFT intends to publish its findings in July.

This independent OFT project will complement the strategic work of the Energy Efficiency Deployment Office (EEDO) and the wider DECC Energy Efficiency Call for Evidence, which closes tomorrow (Wednesday 4 April).

 

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