Thursday, June 27, 2013

Just four households signed up to Green Deal

Just four households have actually signed up to the Green Deal in a “disappointing” start to the Government’s flagship scheme to make all homes more energy efficient.
The Green Deal offers households a loan of up to £10,000 that can be paid back over 25 years through the savings made on electricity bills. Photo: Alamy
The Department for Energy and Climate Change said that 38,259 households have been assessed for Green Deal measures such as a new boiler, solar panels or heat pumps.
But only 241 have gone to the next stage and confirmed they would like to proceed with a loan.
Just four have actually signed up for the Green Deal and are awaiting finance to start flowing.
The Green Deal offers households a loan of up to £10,000 that can be paid back over 25 years through the savings made on electricity bills.
The idea is that households can improve energy efficiency of their homes without noticing any extra cost because the payment will come out of the savings made on the monthly fuel bill.
However it has suffered from teething problems as the Government struggles to organise finance, IT and issues around moving house and even clearing people's attics.
Frustrated building companies expressed disappointment that the legal contracts around the loans were not sorted out sooner so they could start installing measures.
Paul Hicks, Sustainability & Design Manager at VELUX, said it was disappointing so many people who have had an assessment have failed to carry through to a deal.
"The disappointing Green Deal results, showing conversions of assessments to be less than 1%, is a major blow to the Government’s commitment to being ‘the greenest ever’. Thus far the initiative has failed to deliver a viable framework for home improvements and consequently has simply not addressed the key issues surrounding energy efficiency in existing housing stock."
Nigel Banks, of Keepmoat, a specialist in installing efficiency measures, said builders have been unable to offer contracts because the financial packages are not yet in place.
“The take-up figures are very low, but this was to be anticipated as the legal contracts to offer Green Deal finance are not in place, meaning just a few of the 60 Green Deal providers are actually able to offer finance at present.
“It is frustrating that these legal contracts were not in place sooner but we expect this to be resolved in the next few weeks and then the take-up figures for the Green Deal will begin to build in July and August,” he said.
The UK has some of the draughtiest homes in Europe, leaking money out of the economy and fuelling climate change.
The Coalition hope to improve the efficiency of the UK’s 26 million homes through the Green Deal and other measures introduced in January this year.
The “cashback” scheme, that offers a lump sum for installing “easy wins” like double glazing and new boilers on a first come first served basis, has been a success.Some 5,118 households have claimed £263,000 cash back - mostly for boilers.
Also the new Energy Company Obligation, the requires energy companies to improve efficiency in poorer households, has made that 81,798 installations so far.
But the Green Deal is struggling.
Despite months to prepare, 600 trained builders on standby and the involvement of 40 organisations, including household names like B&Q and British Gas, it has had a slow start.
The IT system that puts the additional money on bills is reportedly struggling and lenders are still haggling over the legal terms of the loans. More mainstream DIY stores and supermarkets have not come on board to offer loans and installation.
Labour has pointed out that the financial package can actually prove expensive over time because of the interest on the loan, even if the household doesn’t notice it, and better rates should be offered.
There are also concerns the Green Deal could devalue a house if the next owner feels they have to pay off the loan and some households do not want to clear the loft.
But Greg Barker, Minister for Energy and Climate Change, said it was bound to start slowly.
He pointed out that tens of thousands of people have had an assessment.
“Some 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 is a great sign – many people are increasingly looking to make their homes more energy efficient and keep bills down.”
Over the last nine years the average household energy bill for someone with Britain’s big six suppliers has almost trebled from £522 in 2004 to £1,352 in 2013 – a price rise of 159 per cent.
Paul King, Chief Executive of UK Green Building Council, said the financial plans must be sorted out for the Green Deal to work.
“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.”
Philip Sellwood, Chief Executive of the Energy Saving Trust, encouraged more households to sign up.
“High levels of interest in Green Deal is evident, but there’s no easy answer or quick fix in terms of turning interest in action. What we shouldn’t do is lose sight of the long-term benefits Green Deal can bring to householders, the green economy, and of course our positive impact on carbon reduction.
“However complex the inner workings of Green Deal might be, we need to make the consumer engagement part as straightforward as signing up for a satellite or cable television package. That has to be our long-term aspiration.”