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Group to tackle Green Deal interest rate as 57 projects finished

The number of Green Deals completed rose to 57 in September, according to the latest government figures.

Statistics from the Department of Energy and Climate Change state the number of ‘live’ Green Deals increased from 12 in September.

The number of new Green Deal plans – where a customer has a quote and wants to get the work done – rose by 99 in the month to 392, which is a much larger monthly increase than those seen in August or July.

The number of pending plans – where a plan is signed and work has begun – grew by 133 to 505 in September.

Green Deal assessments rose in September, following August’s decline, to 13,967. September’s figure is the highest number of assessments in a month since the scheme was officially launched in January.

The number of measures installed under the Energy Companies Obligation in August also hit its highest level since January at 49,964.

The Green Deal has come under the spotlight again in recent weeks after Labour said it would scrap the current programme and replace it with a new scheme if elected in 2015.

Labour shadow minister Jonathan Reynolds told Construction News this month that the current scheme was a “disaster”.

The UK Green Building Council has now launched an industry task group to find ways of reducing the interest rate on the scheme, cited as one reason why consumer take-up of Green Deal finance has been so low.

The organisation said the current rate being offered by the Green Deal Finance Company is 6.96 per cent, with the APR for Green Deal Plans ranging from 7.9 per cent to 10.3 per cent.

UK-GBC said reducing the rate could allow more measures to meet the scheme’s ‘golden rule’ whereby the cost of the improvement must be exceeded by the value of energy saved.

A number of contractors have complained about the low numbers of Green Deals done.

Carillion is undertaking a £40m restructure of its energy services business, blaming slow take-up of the initiative for the move.

The contractor is on the 16-member task group, which also includes Gentoo, Keepmoat and Willmott Dixon, with The Green Deal Finance Company as an observer.

Christoph Harwood, partner at environmental finance firm Marksman Consulting and chair of the task group, said: “We aim to take a practical view on Green Deal interest rates and help policy-makers understand their options. 

“We are unlikely to come out with a silver bullet solution but what I hope we can do is inform the debate.”

UKGBC policy and public affairs officer Richard Twinn said: “It is no secret that the Green Deal has got off to a slow start, with the cost of finance repeatedly blamed.

“It is essential that we now shift the debate onto finding solutions so that we can make the Green Deal a success.”

The task group will present its findings in January 2014.

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