Shockingly low numbers of households move forward with Green Deal scheme
Less than one per cent of the 38,000 Green Deal assessments carried out since the government’s flagship energy efficiency programme launched in January have signed up to the scheme.
According to the statistics, by the 16 June, 241 Green Deal Plans had been requested. However just four have taken their plans further.
Not one household is yet to actually go into the ‘final stage’ of the Green Deal, having had their measures installed and started to pay back the loans through their energy bills.
Despite the low numbers translating into installations, the numbers of assessments taking place has continued to rise, with 28 per cent more happening in May than the previous month.
Greg Barker, minister for energy and climate change, blamed ‘getting software systems running and finance into place’ for the slow start to the scheme.
Construction leaders have called for urgent action. In an open letter (see below) orchestrated by the UK Green Building Council (UK-GBC), chief executives from housing, energy, finance and construction companies urged the government to address ‘major concerns’ with current retrofit policy.
Paul King, chief executive of UK-GBC, said: ‘It is obviously disappointing that more Green Deal assessments have not been turned into finance plans, and it shows just how crucial additional incentives are to drive take up. But we simply cannot let this fail – retrofitting the UK’s housing stock is too important for reducing energy bills, improving health, creating jobs in the construction sector and avoiding costs of new generating capacity – and no one has a credible alternative.
‘Business leaders are saying loud and clear that we need to forge a new consensus between politicians of all parties, the private sector and the public around retrofit, to depoliticise something that simply has to be done. It will require some tough choices, but it is absolutely in the public and nation’s best interest to address this as a matter of urgency. The Green Deal provides an important foundation to build on.’
Housing and regeneration specialist Keepmoat’s sustainability director, Nigel Banks, said: ‘The take-up figures are very low, but this was to be anticipated as the legal contracts to offer Green Deal finance are not in place, meaning just a few of the 60 Green Deal providers are actually able to offer finance at present.
‘It is frustrating that these legal contracts were not in place sooner but we expect this to be resolved in the next few weeks and then the take-up figures for the Green Deal will begin to build in July and August.
‘We need to be more patient with the Green Deal scheme and as a nation we need to be more passionate about building and creating more energy-efficient homes’.
Full text of the UK-GBC’s letter
Rt Hon Ed Davey MP, Secretary of State for Energy & Climate Change
Rt Hon Greg Barker MP, Minister of State for Energy & Climate Change
Luciana Berger MP, Shadow Minister for Energy & Climate Change
Re: Ensuring success for the Green Deal and the retrofit agenda
We are taking the unusual step of writing the same letter to all three of the main political parties, setting out our major concerns with current retrofit policy and our belief that we can only address this most urgent of challenges with a greater degree of cross party consensus, and collaboration between Government and industry.
Government’s own figures show that meeting our legally binding carbon targets requires a high level of retrofit across the UK’s 26 million domestic properties, at an average of one home per minute between now and 2050. Clearly this is a monumental task, but it also represents a tremendous opportunity: to reduce energy bills, improve health, provide jobs in the construction sector, and avoid additional costs of new generating capacity.
However, to have any chance of successfully tackling this, it will require Government – either this one, or indeed any future one, to address the following major issues:
Green Deal interest rates
The current rate of interest for Green Deal finance is in danger of acting as a major disincentive to take up, as well as minimising the extent of the measures available in a Green Deal package. Taking inspiration from the effect of recent Government intervention to support new build homes, Government should explore, with stakeholders, what options are available to reduce risk associated with providing Green Deal finance – even if this means greater intervention in the market.
Long term structural incentives
Even if Green Deal was available at a much lower cost of finance, long term structural incentives would still be needed to ensure sufficient uptake. Council Tax or Stamp Duty could be used to send a signal to consumers and the market on the direction of travel, and both could be applied in a fiscally neutral way to HMT. Regulation could also be used, in particular Consequential Improvements, which Government itself has estimated would lead to an additional 2.2 million Green Deals being taken up.
There needs to be a better on-going dialogue between Government and those trying to deliver the Green Deal on the ground, in order to overcome obstacles, reduce unnecessary complexity, identify future issues and learn lessons. At the very least this should take place through a high level industry advisory board co-chaired by a minister and a senior industry figure. It could also involve a more operational body, or ‘hub’, which Government has previously expressed support for.
Long-term certainty and political consensus
There is an increasing sense that the Green Deal, and indeed energy bills more generally, are being used as a political football, which is not good for confidence in the market. These challenges will affect any party, or parties, of government and very bold decisions will be required. We believe there needs to be a new consensus forged between the main parties around retrofit, to depoliticise what is ultimately a long-term challenge that it is in the nation’s interest to successfully address.
Paul King - Chief Executive, UK Green Building Council
James Cameron - Chairman, Climate Change Capital
Mark Clare - Group Chief Executive of Barratt Developments Plc
John Frankiewicz - CEO, Willmott Dixon Capital Works
Peter Hindle - General Delegate, UK, Ireland and South Africa, Saint Gobain
Ian Marchant - CEO, SSE Plc
Gene Murtagh - CEO, Kingspan Group Plc
John Sinfield - Chief Executive, Knauf Insulation
Russell Smith - Managing Director, Parity Projects & Acting Chairman of RetrofitWorks
Nigel Taylor - Chief Operating Officer, Services, Carillion Plc
Peter Walls - CEO, Gentoo