Feature Industry Comment Salvaging the Green Deal
Steve Bratt, CEO of the Electrical Contractors’ Association (ECA), claims the government must take rapid action to rescue the Green Deal
Left: we need a Green Deal that works. Losing it puts us at risk of losing a national domestic green retro-fit programme for the next decade. The industry is ready to deliver and the solutions are out there
been taken into account. There are also still relatively few GDPs who can pro- vide a full package of finance and installed work.
Second, loan interest at seven per- cent is, despite political messaging, very prohibitive for end users. Germany runs its green retro-fit scheme at interest rates of between one and two percent. By comparison, our rate seems very discouraging. For most customers in the domestic market, extending the mortgage for a green retro-fit is cheaper, easier and less risky than taking on a Green Deal.
Solving the problem
hen the Green Deal was launched in January this year, we knew the initiative had the potential to create work for electrical contractors, but we were very concerned that a lack of promotion from the government meant the policy could sleepwalk into obscurity.
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That warning we gave in January has now very much come to pass as the industry and Labour take the coalition to task over what seems to be a failing initiative. Although thousands of Green Deal assessments have been carried out, very few have been converted. Nine months into the programme, there is very little to show from an initiative which was billed as the biggest building refurbishment project since the end of the Second World War. Government
seems more inclined to put its effort into telling us that this initial failure is really part of a master plan, than actu- ally enticing the public to take part. Many installers are concerned, and many deeply affected, by the lack of work coming through, with order books near empty as the Green Deal fails to deliver clients to contractors.
Reasons for failure
There are clear reasons why the Green Deal has so far failed to inspire the public and industry. First, the adminis- tration of Green Deal quotations follow- ing an assessment is arduous and expensive. The cost of getting to the client quotation stage is high for Green Deal Providers (GDPs) by the time the cost of the assessment and tending has
ECA questions Green Deal figures T
he Electrical Contractors’ Association (ECA), has responded to claims made by climate change minister Greg Barker that around 300,000 measures had been installed through energy efficiency schemes to the end of September. ECA head of Energy Solutions, Bill Wright, commented, “The 300,000 figure that the minister is quoting can’t be an
accurate reflection of the success of the Green Deal. The latest figures from DECC show that there are 57 Green Deal plans up and running at present - hardly a good return on the £3.75m the government has invested in marketing the scheme. “The statistic that the minister is using is based on uptake figures for the Energy Company Obligation scheme, which
funds energy efficiency improvements for those who are at risk of fuel poverty. This is a very worthy initiative, but it is not the true Green Deal. “The Green Deal has the potential to be a real game changer in terms of energy efficiency and reducing energy bills for consumers, but more needs to be done to encourage the public to participate. We believe the interest rates of seven per- cent on the loan are too high, and serve to discourage people from getting on board with the initiative. “Furthermore, we feel the government needs to offer tax breaks in the form of reduced stamp duty and council tax for prop-
erties that have a Green Deal in place. This would give homeowners an additional return on investment and encourage take-up on a larger scale. With a better offer in place, we would also support an increase in marketing spend for the initiative. “There’s a very real danger that the Green Deal could fail unless we see a tangible increase in uptake from consumers. If we lose this opportunity, we are faced with the threat of losing a vital national energy efficiency initiative. The public deserves a Green Deal that works, but big changes need to be made if it is going to become a reality.”
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The good news is that the Green Deal can be turned around, but the government needs to take decisive action, and very soon. Cutting the cost of administration, fast tracking the registration of GDPs, and reducing the interest rate to a more attractive level, are obvious first steps to encourage growth. However, new moti- vational Green Deal incentives are neces- sary too. These should include lower Stamp Duty when a newly purchased house is made more energy efficient, and a lower Council Tax rating. These mea- sures have been requested recently by both the UK Green Building Council and the Liberal Democrats, along with a call to revive the legal requirement for green consequential improvements - one of too many lost energy saving opportunities of current times. With rising energy prices, the under- lying financial case for domestic energy efficiency measures is increas- ingly sound. Domestic savings from energy efficiency can vary due to the usage of the property, but if the UK’s home owners can see a clear financial benefit from energy efficiency work, then significant Green Deal take-up is still possible. The government’s cur- rent message is that the Green Deal is a long haul measure. This is fine in prin- ciple, but without decisive action to boost uptake, it simply won’t deliver on either promise of lower energy bills or increased work for contractors. We need a Green Deal that works. Losing it puts us at risk of losing a national domestic green retro-fit pro- gramme for the next decade. The indus- try is ready to deliver and the solutions are out there. The government must respond and re-work the initiative, so that the consumer can truly benefit, and industry can reap the rewards.
Electrical Contractors’ Association (ECA)
www.eca.co.uk T: 0207 313 4800
Enter 213 DECEMBER/JANUARY 2014 Electrical Engineering
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