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Just four Green Deals signed in first five months of scheme

Only four Green Deal plans are “pending” and none have gone live, as the first detailed statistics deal another blow to the government’s ailing retrofit scheme.

The pending figure refers to a signed Green Deal plan where installation is underway, while the live figure signifies plans where measures have been installed already.

241 further Green Deal plans are “in the system”, with customers having confirmed they wished to proceed.

38,259 Green Deal assessments had been lodged up to 16 June, with 30,506 improvements recommended in Green Deal advice reports.

That translates to a conversion rate of 0.63 per cent from assessment to signing up.

The impact assessment for the scheme predicted that a third of assessments would lead to a signed deal for a household.

A goverment report this week found that a third of assessed homes planned to install some form of energy efficiency measures, though these would not necessarily come through the Green Deal.

The news comes as the UK Green Building Council has published an open letter from industry leaders expressing “major concerns” with the current scheme.

The letter was written by chief executives from housing, energy, finance and construction companies, and addressed to energy secretary Ed Davey and climate minister Greg Barker.

Signatories include Barratt chief executive Mark Clare, Carillion chief operating officer Nigel Taylor and Gentoo chief executive Peter Walls.

UK-GBC chief executive Paul King 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.”

Key Green Deal figures, as of 16 June

  • 0 live Green Deals
  • 4 pending Green Deals
  • 241 customers wishing to proceed
  • 38,259 assessments logged
  • 30,506 improvements recommended
  • £263,454 paid out in cashback
  • 206 accredited assessor organisations, 1,798 employed advisors

The most common measure was boiler upgrades, accounting for 17 per cent of recommended measures, with solid wall insulation following up with 11 per cent.

Meanwhile, 81,798 measures were installed under ECO up to the end of April, the majority for loft insulation and cavity wall insulation.

26,836 cavity wall insulation measures were carried out, along with 45,406 loft insulations under ECO.

1,565 solid wall insulation improvements were installed in the period.

These ECO improvements had a combined value of £131m.

Construction News reported last week that the number of Green Deal Plans signed was likely to be between 200 and 300 with the vast majority for single measures, and the bulk of these for boilers.

In March, energy secretary Ed Davey said he expected the Green Deal and ECO to result in a million separate home improvements by 2015.

But the scheme was dealt a further blow when it emerged that just one Green Deal had been signed in Birmingham, where Carillion is operating a £1.5bn Green Deal contract.

The figures were published today by the Department of Energy and Climate Change, in the first official statistical release.

The scheme has been running since 28 January this year.

Energy minister Greg Barker said the scheme was “only just getting started”, but that the early signs were “encouraging”.

“Today we’ve seen that 81,798 installations have taken place with the support of the new Energy Company Obligation, helping those most in need or with particularly hard to treat properties. But this is just the start. 38,259 Green Deal assessments is also a clear sign that many consumers genuinely want to make their homes more efficient; but we are keen to do more.

“78 per cent of people who have received a Green Deal Advice Report, following a Green Deal assessment, said they had, were getting or would get energy saving measures installed. This too is a great sign – many people are increasingly looking to make their homes more energy efficient and keep bills down.

“Getting software systems running and finance into place for Green Deal Plans to be signed has taken time, so the numbers here are lower. The very first wave of Green Deal Finance Providers have only just got their individual finance terms and conditions in place and gone live with their software systems that operate this whole new product. However, now the first five are up and running, the good news is that we expect up to 50 authorised finance providers to be active by the end of the year, massively increasing the access to finance in the market.

“It will take time as this brand new market finds its legs, but I now expect the number of plans signed to start steadily rising.”

Full text of the UK-GBC letter to the energy secretary:

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.

Stakeholder engagement

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.

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