ENERGY EFFICIENCY
Green Deal or green gamble?
Kate Ashley reports from a Labour conference fringe session on the Green Deal. T
he Government’s fl agship green policy, the Green Deal, launched on October 1 and
was the subject of debate at a fringe session of Labour’s annual conference in Manchester
The Green Deal offers house owners a fi nancial model to pay for energy effi ciency measures over a period of years, through savings on their energy bills, rather than upfront investment.
It has been cited as a “game-changer” by the Coalition, which says it will result in 14 million homes being insulated by 2020, delivering energy effi ciency and heating measures worth an estimated £1.3bn.
The speakers were united in their appreciation of the thinking behind the policy, but serious concerns remained around implementation, fi nance and take-up. The session’s title posed the question: ‘Green Deal or green gamble?’
Transition and take-up
First to speak was Dave Sowden, chief executive of the Micropower Council, who said it was “fundamentally a good idea”, but raised concerns around implementation and the transition from a heavily subsidised market to one where customers will be primarily expected to pay for it themselves.
“That transition is quite a signifi cant change,” he cautioned.
Other potential snags include whether enough attention is being given to the fuel poor, who are least likely to accept the underlying economic equations the Green Deal is inherently based on, and whether the sector will be incentivised to pay for the scheme itself.
Sowden concluded: “I’m not convinced that the Government so far has got there. Is it a green gamble? I think it is, but there are many dimensions to it. Fundamentally I think it’s the right thing to do, my money’s on it, but only if we get the transition right.”
Dead in the water? Dr Alan Whitehead MP was a robust critic of
32 | public sector executive Sep/Oct 12
the scheme, saying the Green Deal would not be able to sustain interest and investment after the initial funding ran out.
He said: “It’s probably going to come to a stop fairly early on in its career, simply because after the initial money that the Government has signed up to provide comes to an end, I think it’s very diffi cult to see how there are going to be any serious numbers of adopters.
“I think it will fi zzle out thereafter.”
However, he was enthusiastic about the principles behind the Green Deal initiative, and said the idea that a programme of its kind at the centerpiece of future energy strategy was needed was “undeniable”.
“We need it because the huge proportion of CO2 emissions from domestic property can be radically attacked by that programme, by getting our houses much more energy effi cient and at the same time radically reducing fuel poverty in homes.”
Dr Whitehead added that it could fall very short of the scale of ambition needed and the programme could be “dead in the water” by the time of the next election.
Bill Rumble stated that whilst Mark Group was one of the fi rst 22 providers for Green Deal, there were concerns around the scale of transition and the amount of information available on both cashback incentives and the level of interest rate.
He added that the big issue is around whether consumers will embrace this, with the expected 7.5% interest rate impacting on the whole equation.
“I think it’s a big idea”, Rumble said, highlighting the potential of the scheme, but added: “I would certainly put it in the gamble category. I think, frustratingly, it looks like the energy saving industry is going to backwards before it goes forwards again.”
Leap of faith
Pete Moorey, from Which?, pointed out that consumers had a high level of concern around energy effi ciency, yet a very low willingness to do anything to improve their homes, due to a lack of trust in the industry.
The Green Deal has been highlighted as a “game changer” in the market, but Moorey suggested it was banking on a “huge leap of faith” that consumers want to engage in this way.
“That leaves me very worried about whether the Green Deal will succeed,” he said.
He went on to describe the key elements of the gamble; the fi rst being whether there will be suffi cient interest from the public. People see the Green Deal essentially as a debt, and one they’d rather not incur in the current economic climate, Which? polling suggests.
The lack of a guarantee also deters people, Moorey said, and warned that there would “inevitably” be cases where people would not receive the savings they perceived as promised, which could undermine the success of the Green Deal.
He added that while Which? believes
Government has done a “good job” on consumer protection, “at the end of the day standards on a piece of paper are not enough”.
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