Green deal is a 'disappointing failure', says committee of MPs
Posted by Tasha Kosviner on 15 September 2014 at 9:30 am
The green deal has been a ‘disappointing failure’ which has caused ‘frustration and confusion for both consumers and businesses’, an influential cross party Westminster committee has concluded today.
The Energy and Climate Change Select Committee said that better insulated homes would be of benefit to both homeowners in the form of warmer, more efficient homes and society, in the form of greater energy security and lower carbon emissions. But with only 4000 green deal plans issued so far, carbon savings resulting from green deal finance have been ‘negligible’.
In their report, Green Deal: watching brief (part 2), the committee blamed the poor take up on a combination of financial, communication and behavioural barriers. The high interest rates associated with the loans have put off many potential customers as they are able to find cheaper finance elsewhere, whilst the government’s communication strategy has caused confusion by conflating the green deal with a number of other energy efficiency schemes, such as the energy company obligation.
The green deal is a finance scheme where households can repay the cost of energy saving installations through their electricity bills. The idea is that the cost of the repayments does not exceed the savings made from having the measures installed.
Committee chair, Tim Yeo MP said:
“The interest rates attached to the green deal are simply not financially attractive enough for many households to go to the hassle of setting one up. By its nature this kind of scheme also only appeals to a certain section of the population who are in a position to take out loans on home improvements. Broader incentives could encourage lots more households to take simpler and cheaper steps to improve the energy efficiency of their properties and save money on their energy bills.”
The report suggested alternative financial incentives such as stamp duty discounts or variable council tax rates linked to the energy efficiency of homes, to encourage a broader range of households to improve their properties.
“We urge DECC and the Treasury to consider such ideas,” the report said.
The committee’s findings were welcomed by John Alker, Director of Policy and Communications at the UK Green Building Council.
“This influential cross party committee has now added its voice to a crescendo of industry and independent experts, who have long called for greater incentives to boost demand for energy efficiency and the green deal,” he said. “Energy efficiency is too great an untapped opportunity for this message to fall on deaf ears once again. Government needs to treat energy efficiency as a national infrastructure priority, which means a long-term programme of incentives and support, enabling the private sector to get on and deliver lower bills for householders.”
Click here for YouGen's response to the report
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