Despite a rocky start, there is a lot to be positive about the Green Deal as its first anniversary passes.
No one could refute the suggestion that the initiative has less than lived up to its ambitious aims, but it would be remiss to say it is a failure.
The Department of Energy and Climate Change’s December figures reveal that, although there are just 450 live Green Deal plans in place, more than 117,000 assessments have been carried out since the Green Deal’s launch in January 2013. This highlights that the public are looking for advice on energy saving, and appears to indicate there is a captive market there waiting to be tapped into.
These figures therefore suggest that the issues with the Green Deal lie in its components, rather than its fundamentals. In principle the initiative is very sound, but there are issues with the Green Deal offering that need to be addressed if we are to see an increase in take-up.
One factor that I believe is affecting levels of participation is the seven per cent annual interest rate on Green Deal loans, which in the current climate is too high for both commercial and domestic end users. Cutting this rate in line with the German green retrofit scheme, which the Green Deal is modelled on, would make the loan more attractive and competitive compared to alternative offerings.
Once this financial stumbling block is resolved, and taking out a Green Deal loan makes economic sense, the next step is to develop tangible incentives to encourage consumers and businesses to come on board. We believe reducing council tax and stamp duty for properties that have a Green Deal in place, and cutting business rates for those companies that have taken up the initiative, would stimulate enthusiasm for the Green Deal.
If we can provide the right financial support and incentive, combined with the Government’s simplification of the administrative process, considerable Green Deal take-up is still possible.
We’re constantly being told that the initiative is a ‘long haul’ measure, but with the right modifications we shouldn’t have to wait too long to see the results.
It’s clear the public wants help with lowering their energy bills. If the Government is going to provide financial help in the form of loans, it needs to do so at a fair and reasonable repayment rate.
Solving this challenge will be key to the success of the initiative. If we can agree and implement a solution soon, the Green Deal’s second birthday will be significantly happier than its first.
Bill Wright is head of energy solutions at the Electrical Contractors’ Association