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MCS Case Study
- Details
- 16 February 2012
Background: In November 2008 the Department for Energy and Climate Change (DECC) awarded Gemserv the role of Licensee of the Microgeneration Certification Scheme (MCS). This is an independent scheme which certificates microgeneration products and companies installing renewable technologies (such as solar panels and biomass products), applying robust and consistent standards.
As a Government endorsed scheme, the MCS underpins DECC's financial incentive schemes, such as the Feed-in Tariffs scheme (FITs) and the Renewable Heat Incentive (RHI). These incentives are provided to microgenerators using both products and installers certificated under the MCS for installations up to 50kW of electricity and 45kw of heat. Payments are currently made for generated electricity. In the near future they will also be made for generated heat. The MCS is also incorporated into other Government led policies including planning permission for consumers for certain renewable energy technologies, and the Standard Assessment Procedure (SAP) for Energy Rating of Dwellings.
The Objective: DECC commissioned Gemserv to develop MCS into a scheme that would be self funded by its members and the microgeneration industry whilst still supporting government policy. Gemserv was also tasked with extending the scope of the technologies covered by the Scheme, to include micro hydro and micro Combined Heat and Power (CHP). Gemserv also had the additional challenge of introducing competition into the Scheme by increasing the number of certification bodies able to grant MCS certification.
The role of MCS Licensee meant that Gemserv was responsible for the day to day running of the Scheme. This includes helpdesk services, website maintenance, marketing and the provision of intelligent secretariat duties to the 12 different technical working groups, as well as developing the governance underpinning the Scheme. Gemserv was also commissioned later by DECC to develop a database to support the roll-out of FITs. This database is now an integral part of the Scheme.
The Solution: In the last three years, Gemserv has stayed true to its core values in maintaining independence and integrity throughout its work. Our first task was to transform the MCS so that funding by the industry could be viable, without having a detrimental impact on the market. Gemserv worked with stakeholders including trade associations, Government and industry participants. We ensured that the MCS was seen to be sufficiently valuable to the industry for them to contribute and participate without government funding.
The next challenge was to undertake financial modelling and analysis to establish an appropriate funding model for the scheme. This required working with stakeholders to gather information on current issues within the consumer market such as the prohibitive cost of microgeneration, estimates of future market demand, current economic conditions, financial pressures on the microgeneration industry and environment initiatives or policies which could have impacts on the market. We developed an appropriate funding model that did not make participation prohibitive, particularly for smaller companies, but ensured that the MCS was a viable ongoing concern. The model is under permanent review due to the fast changing nature of the market and the number of new environmental initiatives that impact on the microgeneration sector. The development of the MCS database was initially funded by DECC to support the roll-out of FITs. It is now a key contributor to the funding of the Scheme, as it collects the per installation fees. The database is used by installers on the scheme to register installations. It supplies the customer with a certificate which is used to claim government incentives – hence the link to FITs.
The design, build and implementation of the database by Gemserv had a massive impact on all stakeholders involved with the roll-out of FITs. A user group was set up for FIT Licensees, DECC, Ofgem and MCS to liaise and work through any "teething issues" to ensure the smooth roll-out of the FITs incentive scheme. This high level approach to simple governance principles provided industry and stakeholders with what was required at the time; more governance will be developed as the industry changes.
For the development of the micro CHP and micro hydro technology standards, Gemserv provided secretariat services for technical working groups put together by stakeholders, including running consultations to complete the standards for both of these technologies. Other technical working groups meet on an ad hoc basis to ensure all standards are kept up to date and in line with any updates within the international standards arena.
This work is still central to the ongoing service to the Scheme and is integral in ensuring its reputation can be maintained internationally. Gemserv has also increased the number of certification bodies granting MCS approval from one single certification body up to the current figure of 16, including one based outside of the UK. The introduction of healthy competition, coupled with a healthy market demand supported by government initiatives, has meant that the Scheme membership has grown to just over 4,500 installation companies and just over 5,000 products being approved to the MCS requirements.
Alongside the day to day activities, marketing of the Scheme requires close liaison with consumer bodies and consumer-facing organisations, such as the Energy Savings Trust, to ensure best understanding of the consumer market and consumer preferences for heating and power. This includes assessing attitudes towards the low carbon / renewable energy agenda and concerns with microgeneration that would affect the success of environmental initiatives such as the MCS. This understanding meant that Gemserv was able to develop and undertake marketing activities for the scheme which stimulated uptake; the MCS mark has a high profile and is valued in the industry. Finally, Gemserv is responsible for ensuring that new environmental initiatives, both at the UK and EU level, are incorporated into the MCS where appropriate, and where they will additionally stimulate the market. Such initiatives include FITs, the RHI and the General Permitted Development Order (GPDO).
