The revamped Green Deal may or may not win over hearts and minds but it has a lot to prove
Last week the Green Deal Home Improvement Fund (GDHIF) enjoyed its biggest week yet with funds issued surging by £8 million in seven days, taking the new scheme’s three-week total to £16.5 million.
A total of 4,490 households have applied for the GDHIF, which has been promoted as offering ‘instant’ money back for making energy saving home improvements.
Commenting on the latest figures, climate change minister, Greg Barker, said: “With the GDHIF off to such an encouraging start, it’s the perfect time to make homes more energy efficient.”
However, the previous scheme that was supposed to herald a massive change turned out to be a major disappointment. In his assessment below, Alan Gilbert, Business Manager at BSRIA Instrument Solutions, gives his view:
The previous scheme has been roundly criticised for its complexity, so the new scheme has set out to address some of these failings. In particular, the Golden Rule was at the heart of the Green Deal, intended to deliver a net saving to participants. The rule essentially required that levy payments on the Green Deal loans should be less than savings participants made through lower energy bills as a result of the efficiency improvements. While it is important for participants to see value for money, it does mean that participants could not shop around elsewhere for cheaper financing, or undertake more costly improvements. The upfront charge of £120 for an environmental assessment was also an immediate barrier to participation.
The new scheme certainly appears to offer a simpler process for qualifying for funding. For example, the first £100 of the assessment can be reclaimed. The funding structure is also easier to understand, with a £500 payment to anyone who installs energy efficient measures within 12 months of moving into their property. There will also be a further £1,000 cashback which will be available to all, irrespective of when they moved in, if they fit any combination of two improvements from a list of twelve. Participants can now also claim cashback without taking out a Green Deal loan for installing energy efficient measures, as long as the work is done by a Green Deal installer.
So, the government is to be congratulated for listening to the criticisms of the scheme and reviewing and amending the access to the funding. But, will the scheme really deliver the change that is required? Well, maybe not.
If the scheme is to be considered a success, it needs to have good engagement but it also needs to ensure that the greatest level of energy savings are achieved for each participant, as far as is practical. For example, BSRIA has long been a champion of air tightness testing in the industry, and it seems self-evident to us that this needs to be addressed in the domestic housing stock. If you live in a ‘leaky’ house with poor air tightness, you could choose to have a new front door fitted and a nice new efficient condensing boiler, but if the house is leaky, the benefit from those two funded choices will be limited.
For the Green Deal to be considered a real success there needs to be some monitoring of the return on investment, which should be maximised through installations which offer the highest energy savings practicable for each scheme participant.
Alan Gilbert, Business Manager at BSRIA Instrument Solutions – Green Deal success dependent on “[the] needs to ensure that the greatest level of energy savings are achieved for each participant”.