On 4th July 2012, Richard Jack and Faye Wade put on their glad rags and headed for the House of Commons for the 9:30 start of the Parliamentary Renewable and Sustainable Energy Group (PRASEG) seminar: ‘Will the Green Deal Deliver?’. The seminar, chaired by Alan Whitehead MP, included speakers representing DECC, research and industry sectors, each of whom spoke for 10 minutes followed by an open floor Q & A session.
The Green Deal is a financing mechanism that is coming into action in October 2011. The Green Deal provides a loan to offset the capital cost of energy efficiency refurbishments, with the loan applied to the property rather than the homeowner. The key to the deal is that the repayments on the loan must be less than the predicted saving in the energy bills due to the refurbishments, this is known as the ‘Golden Rule’. The loan repayments are added to the electricity bill. If you want more information on the Green Deal, see Jenny Love’s recent blog.
This seminar gave us the opportunity to get an update on where we are up to in terms of delivering the Green Deal and how far we still have to go. Tracy Vegro, Director of the Green Deal at the Department of Energy and Climate Change (DECC) highlighted that the required legislative frameworks are now in place, including the passing of the Energy Act to create the new financing framework for the provision of the energy efficiency improvements and the creation of the Energy Company Obligation (ECO), which is aimed at ensuring those most vulnerable or living in hard-to-treat housing receive additional support. The need to think about hard-to-treat houses and those living in fuel poverty was further emphasised by John Sinfield from Knauf Insulation and Joanne Wade and independent consultant currently working with UKERC, respectively.
The speakers were all encouraged by the legislation for the Green Deal being put in place, but expressed concerns over whether the market and trades are ready for the Green Deal. There was particular concern over whether finance would be available at a suitable rate in time for the start of the Green deal, with John Sinfield even suggesting that the Green Deal Finance Company might be 9 months away from operation. The representatives of insulation installers present were particularly concerned that this might lead to a difficult transition period after the end of the Carbon Emissions Reduction (CERT) scheme on the 1st January 2013. With the Green Deal’s own impact assessment predicting an uptake of loft and cavity wall insulation at a rate of only 15% of that achieved under CERT, there is likely to be a huge drop off in these installations, with potentially disastrous impacts for smaller companies.
Joanne Wade (UKERC) and David Robson from InstaGroup pointed out the fact that the trades, who will actually be delivering the Green Deal, seem to get left behind. Joanne suggested that those on the ground are not engaged with the Green Deal, and questioned how we can get then engaged? Whilst David highlighted the individual installers and SMEs who may easily get forgotten as the big companies who can provide full Green Deal packages saturate the market. It was also mentioned that £2 million has been set aside for installer training, this value barely compares to the £200 million that has been reserved to incentivise consumers, suggesting that Joanne and David’s concerns are, so far, going unheeded.
The discussion was hugely informative in helping us to understand how much progress the Green Deal has made, but also highlighted how far it still has to go. The lack of representation for the heating and microgeneration industries on the speaker panel was quite apparent. Feedback during the questions session suggested that these groups need more consideration in future Green Deal planning. One microgeneration representative made the stark point that the majority of microgeneration technologies which qualify for Green Deal funding will struggle to meet the Golden Rule because of their high initial costs, something which is difficult to avoid with emerging technologies, and questioned what can be done about this.
From attending the event, it seems that having the legislative framework in place is fantastic, but this will not be effective if the market is not ready to provide the Green Deal. Given that the first Green Deals are only a couple of months away there seemed to be a concerning amount of uncertainty. The seminar did have an overriding focus on the market and only limited discussion of whether the Green Deal will actually deliver energy savings in homes; this is really where we should be prioritising our thinking.