Green Deal — success or failure?

Published:  04 September, 2014

BSRIA, Green Deal
Questioning the effect of Government energy-saving initiatives — Krystana Dawson.

BSRIA’s Krystana’s Dawson wonders how effective the Government’s ever-changing approach to financing energy-saving home improvements will be in the long term.

Due to overwhelming popular demand, the Green Deal Home Improvement Fund is closed for applications with immediate effect,’ reads a recent press release on the DECC website. The press release went on to claim that the Green Deal Home Improvement fund had been ‘extremely popular’ and ‘as a result, thousands more families will now benefit from Government help to have warmer homes which use less energy’.

Sure enough they will, providing it turns out that the money claimed will be well spent. However, will it really have an initially desired long-term impact on the achievement of our energy-efficiency targets and on the deployment of renewable technologies? The reason for asking that question is that although the home-improvement fund did not include funding for renewables, getting the RHI requires a Green Deal assessment.

The criticism of the previous incarnation of the Green Deal was the complexity surrounding accessibility of the funds, so the Government reviewed the mechanisms and delivered a new scheme which allowed for easy access to funding. Going from one extreme to the other seems now to have caused damage to the scheme that might prove irreparable in the long term and overturn its initial success.

The scheme has been closed because the funding allocated to the scheme for this year had been spent within two months of the scheme being launched. It is not yet known how many households have managed to take advantage of the scheme, but it seems clear that thousands of home owners who have already paid some £100 for a Green Deal assessment will now potentially be out of pocket.

Anger and disappointment is also to be expected from installers who have often invested time and money in making themselves familiar with the scheme that was supposed to help develop their business.

Despite clear signals coming in during the first weeks after the scheme was launched that the consumers liked its generous offer (home owners claimed £25 million-worth of vouchers within the first month — approximately half this year’s fund allocation), the Government seems to be taken by surprise with the fact that funds available within the scheme were exhausted so promptly. It is also not clear yet if there will be a release of additional funding to continue the support of the scheme further in this year.

BSRIA, Green Deal

However, even if it happens, there will be many home owners and installers disillusioned with the Green Deal scheme. It is likely that householders will either try to be more vigilant next time, causing another ‘rush for cash’ when funds are made available again, or will just become indifferent to any other long-term support actions. Installers who will not be able to achieve their business targets will adopt a ‘wait-and-see’ attitude next time.

There is no arguing that to deliver an improvement in energy efficiency and address climate change there is a need for Government intervention, be that through legislation or incentive. However, whichever method is used has to be introduced with a long-term vision that will bring about effective and sustainable change.

Schemes like the Green Deal Home Improvement and RHI require credibility and consumer trust to become really successful. Closing the GDHI so abruptly damages both.

What consumers and industry need are clear long-term drivers, thought-through ideas and well managed schemes. Without that, we will constantly be going through a cycle of boom and bust that will take us nowhere near to successfully developing the house renovation market able to achieve Government energy policy goals and to benefit the households.

So the current Green Deal Home Improvement scheme has been a success, yes, if you are looking at it from a short term perspective, but if you want to effect long-term change the jury is still considering its verdict.

Krystana Dawson is a senior manager, heating special projects, with BSRIA.

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