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Issues with the Green Deal

Some of the administration costs of the Green Deal are to be waived for two years in a bid to help encourage more companies and organisations to join it and stimulate the market (Greenwise Business - link broken). The Department of Energy and Climate Change (DECC) has confirmed that no-one seeking to become a Green Deal assessor, installer or provider will have to pay fees for registration until 2014. Meanwhile the government has appointed Gemserve and its partner REAL to be the overseer for assessors, installers and providers and to monitor the Green Deal code of practice for the next three years.

Energy Minister Greg Barker has described the Green Deal as a 'game changer' writing in his blog in The Guardian. In counter argument to an earlier Guardian story that claimed insulation rates would drop by 83% under the Green Deal, the minister said, :

"The government's ambition for the green deal goes much further than the current system of cheap loft-lagging and cavity-wall insulation paid for through levies on everybody's bills. It both recognises the opportunities presented by the growing green goods and services market, which now supports 1m jobs, and that in tough economic times, government subsidies must be targeted where they can have most impact and enduring value.

One fact about loft insulation is that the market is shrinking. 99% of lofts have some kind of insulation. By the end of the year about 200,000 – only about 1% - will remain without any insulation; and well over half have the maximum level. So it's inevitable that forecasts show the number of loft insulations will fall: there are fewer of them to do.

The reason for this is far from failure – quite the opposite. The job has largely been done thanks to government subsidy schemes which have to date focused very strongly on lagging our lofts with the result that almost all of us have benefited. And in tough times, it doesn't seem right that the government should continue to promote indiscriminate subsidy for measures which pay for themselves, when there are so many other challenges where subsidy is needed more. Insulating your loft is still a good idea, it pays for itself, and the green deal means you can do this without upfront costs - what better platform for an industry to diversify and innovate?"

However in comments, Guardian blogger Damian Carrington countered the Minister's positive assertions about the scheme saying:

"We agree that the Green deal is a major and crucial plan I accept there are lots of good things in it and you point about solid wall insulation is well made. But where I disagree is that I fear the policy focuses on the means, not the ends.

The end goal, surely, is to reduce energy bills and carbon emissions by the greatest amount and at the least cost, that simply cannot mean causing a plunge in loft insulation of 83% and cavity wall insulation of 43% on the means - the market you argue is a game-changer - what do you say to David Kennedy, ceo of the government's official adviser on climate, who says: "We think there is a significant risk in leaving it to the market, as that has never worked anywhere in the world and is unlikely to happen in the UK."

Carrington also claimed that the Minister was ignoring the CCC (Climate Change Committee) data which stresses a figure of 1.4 million cavity wall insulation installations per year is needed.


One of the main issues is that the public still hasn't heard of the Green Deal in sufficient numbers and therefore many people still don't know what it is, as Brian Smithers wrote in The Huffington Post (UK) blog

"There is still a widespread lack of understanding of how green technologies can help people improve their energy efficiency and reduce bills. For example, Rexel's recent energy efficiency survey found that over a quarter of Brits would be motivated to save energy if they had access to financial subsidies, yet 90% hadn't heard of schemes such as Carbon Trust Loans, which offer businesses an interest free loan of between £3,000 and £400,000 to reduce CO2 emissions through the introduction of clean technology."

But it also turns out that fewer than half of UK MP's intend recommending the Green Deal to their constituents (http://www.bdonline.co.uk/news/mps-bemused-by-green-deal/5038151.article)

So, all things considering, it still doesn't look very promising!

And while I am about it, here's another one, Blue Chip companies have stopped working with the Green Deal Finance Company over concerns over funding:

http://www.businessgreen.com/bg/news/2182850/exclusive-blue-chips-halt-green-deal-financing-company?goback=.gmp_3765259.gde_3765259_member_122631824#disp

"A group of companies expected to finance the government's Green Deal energy efficiency scheme have issued a stark warning to the Deputy Prime Minister that its flagship policy is in jeopardy as a result of funding delays."


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