Will the Green Deal prove to be a Good Deal after all?
After a prolonged delay, the Green Deal came into fruition at the beginning of last week.
8th February 2013 | Peter Rolton: Chairman, Rolton Group
Previously heralded by Climate Minister Greg Barker as ‘the biggest home improvement programme since the second world war,’ serious aspersions are now being cast over its feasibility.
Brought in to combat the ever-increasing energy bills of UK consumers, which have more than doubled in the past eight years alone, the admirable concept which allows those otherwise unable to improve the efficiency of their homes to do so now looks to have been warped by several emergent factors.
First, the upfront price of a Green Deal assessment. This is typically between £70 and £120, and though some providers will deduct the cost from their final bill as an extra incentive, the fee must be paid whether or not consumers then decide to go ahead with the suggested changes. As the Deal is specifically targeted at those for whom financial consideration takes top priority, the appearance of this charge has already made potential users wary of other ‘hidden costs,’ hampering uptake.
Second, the worryingly high interest rates. It would appear that in several instances, savings made by the installation of energy efficient technologies would be nullified by the cost of repayment when combined with interest, which is determined by the service provider and could reach up to 9.3%. This breaks the ‘golden rule’ of the green deal, which promises that expenses will always be outweighed by savings, rendering the scheme completely unviable to those it most desperately needs to reach. An article in this week’s Sunday Times highlighted this flaw, with the Green Deal emerging as the least cost-effective way to improve domestic energy efficiency when compared with other schemes and high street loans.
Third, it’s becoming increasingly complex. Should a Green Deal user sell their home, the new owners will have no guarantee that their repayment plan will remain the same, as these are assessed on an individual basis. Not only must they then take on the cost of improvements they did not instigate, but will be doing so with no certainty of the financial implications. The bandying about of terms such as ‘estimated cost’ and ‘should not exceed savings’ do nothing to detract from the feeling of ambiguity which now surrounds the initiative. For those who can’t afford to own property, the water is even muddier; what incentive is there for landlords to invest in long term, expensive commitments when they do not pay the fuel bills? Without intervention, the poorest have no option but to continue to bear the burden of traditional fuels as the price goes up.
Fourth, and most crucially, is the lack of awareness. A recent YouGov survey found that more than four in every five people have not even heard of the Green Deal, an obstacle of momentous proportions. The Prime Minister has stepped in to state that the lack of a proper marketing campaign is a deliberate move which gives providers the chance to cope with demand as it grows. He claims that ‘this is a programme we want to build over the months and years ahead,’ but when compared with the gusto once used to promote the scheme, his words start to look like smoke and mirrors.
In order for consumers to see the Green Deal as something worth committing to, it must stand strong on three key points: it must be compelling, easy to understand, and provide tangible benefits for users. Sadly, the proof is not yet in the pudding. Instead, the UK appears to be left with the ruins of yet another promising idea from ‘the greenest government ever’. Unless radical changes are made to the implementation of this initiative, it will simply reinforce the perception of superficial ‘greenwashing’ by the Government, which does nothing to help those most in need.
Post Categories: