Chief secretary to the Treasury Danny Alexander has said the Chancellor’s autumn statement next week will deliver a £200m incentive boost for take-up of the Green Deal.
Mr Alexander did not say how the incentive would be delivered, when he made the announcement at a National House Building Council lunch today, but said further detail will come in next week’s autumn statement.
Take-up of the Green Deal has been highlighted as a major concern ahead of the start of the programme in October 2012.
The government released its long-awaited consultation document yesterday, in which it confirmed that £150, or 5 per cent of the total Green Deal package, would be offered in cashback to homeowners who signed up for the scheme, however this would be added to the loan given to home by the provider.
NHBC chief executive Imtiaz Farookhi said: “We welcome the government’s commitment of more funding to the Green Deal. Ensuring sustainable, energy efficient housing is critical; equally it is important that consumers are afforded the same kind of protection under the Green Deal as they currently receive with new homes.”
It hopes the scheme will retrofit 14 million homes by 2020 and help the UK meet its carbon reduction targets of 50 per cent (on 1990 levels) by 2025 and 80 per cent by 2050.
Chief secretary to the Treasury, Danny Alexander:
I can announce today that as part of the Autumn Statement we will provide £200m of funding for new and additional support to enable a special time-limited ‘introductory offer’ for the Green Deal.
An offer that could save early adopters hundreds of pounds. A fund to get the Green Deal off to a flying start. One that will work with the Green Deal mechanism and the ECO to motivate thousands of more consumers to take up energy efficiency measures, over the next two years.
EAL managing director Ann Watson said: “The sooner the detail of the Green Deal is agreed, the sooner businesses and organisations can ensure that the right training and qualifications are available to provide the workforce with the necessary skills and expertise to meet government’s goals.”
Liz Laine of Consumer Focus added: “I don’t think the £150 cashback will be particularly desirable. I am pretty sure homeowners will spot that they will end up paying interest on the sum over 25 years if it comes out of the Green Deal charge. We would rather see financial incentives to put long-term value on energy efficiency in the housing market through differentials on tax or stamp duty changes.”
The Green Deal is a scheme designed to offer loans to homeowners through accredited Green Deal providers and installers to make their homes more energy efficient.
Under the scheme, homeowners would take on a loan, typically between £6,000 and £10,000, which would then be paid off through a corresponding reduction in bills. Under the scheme’s ‘golden rule’, the cost of paying back the measures must not exceed the savings associated with the energy efficiency retrofit.
However the cost of finance, interest rates and consumer take-up have all been highlighted as potential barriers, with industry experts and trade bodies stating the scheme is unlikely to attract major interest until 2013/14.
Energy and Climate Change secretary Chris Huhne:
We want the Green Deal to be a game changer for British consumers who’ve been buffeted by global energy prices. The earlier you Green Deal your home, the quicker you’ll benefit from a warmer and cosier property as well as protect yourself from rocketing prices.
This big injection of government funding delivers on our promise to ensure the Green Deal hits the ground running, and make it as attractive as possible so that people start to benefit from day one.
The company has held talks with the European Investment Bank, Department for Energy and Climate Change and local authorities as it attemptsto generate low-interest finance for the scheme.
Contractors including Balfour Beatty, Willmott Dixon and Interserve are among those looking to take part in the Green Deal while trade bodies such as the FMB and ECA have hailed the impact it could have, but warned that its members need to be given the chance to win work under the scheme, with major retailers and energy companies thought to be leading as potential Green Deal providers.