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National Audit Office concludes Green Deal was not value for money

Posted by Alex Barrett on 21 April 2016 at 11:40 am

The Green Deal was set up to encourage homeowners to install green technologies and energy saving measures. The scheme was launched by the Department of Energy and Climate Change in 2012 and provided loans to fund the installation of green measures. These were then paid off using the energy bills of the houses that signed up to the scheme [1, 2].

The Green Deal did not provide the expected reduction in CO2 emissions. Only 14,000 households signed up for the scheme, far fewer than had been hoped. The government stopped funding the Green Deal finance company in July 2015.

Now a study by the National Audit Office (NAO) has concluded that the costs of the green deal far outweigh the benefits, saying that it “has not achieved value for money”. They report that the scheme cost the taxpayer £240 million, approximately £17,000 per household. The report states that “DECC’s design and implementation did not persuade householders that energy efficiency measures are worth paying for”. The scheme failed to produce substantial energy savings.

The Energy Company Obligation (ECO) program, which has run in parallel to the green deal was also criticised. The NAO report states that although the program resulted in carbon savings of 24 MtCO2 up to the end of 2015, this was “only around 30% of what the predecessor schemes achieved over similar timescales.” The government plans to replace the ECO scheme.

The Heating and Hotwater Industry Council has urged the government to “commit to a new policy that will deliver on both fuel poverty targets and help achieve our carbon targets” [4]. However it remains unclear how they will encourage eco-friendly renovations going forward.

References

  1. The Green Deal
  2. Green Deal Initiative
  3. National Audit Office Report
  4. Response from Heating and Hot Water Industry Council.

Image: Green Deal Logo

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