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5 reasons the Green Deal was a flop

July 31, 2015 featured image

The Green Deal, a government policy which promised so much but failed to deliver.

On Thursday the 23rd July 2015 the department of Energy and Climate Change (DECC) pulled the plug on funding to the Green Deal Finance Company (GDFC) effectively killing off the Green Deal Home Improvement Fund (GDHIF).

When the Green Deal was launched in 2013 it was set to be a monumental step forward, touted as the “Biggest home improvement programme since the second world war” by ministers.

At the time the then Secretary of State, Chris Huhne, predicted that the supply chain could support 100,000 jobs within five years, spread across the UK.

So what went wrong?

Low uptake

By the end of June 2015, measures had been installed in just 10,000 properties using Green Deal finance, with only an additional 5,600 Green Deal finance plans currently in progress.

The Green Deal fund didn’t seem attractive enough to consumers despite the excellent assessment system, evaluating the energy efficiency of homes and suggesting improvements.

Confusing figures

In May 2015 the GDFC hailed April as its “Best ever” week. Over £2.25m of applications for fitting measures such as insulation or green energy systems were made.

Over the last year there have been both positive and negative articles written in the press. So what was the truth of it, was it all just spin because of the election?

There are probably a lot more consumers investing in renewable energy and efficiency measures than are being reported in the media but just not using the fund.

The truth is many are using the excellent “Green deal energy assessment” but taking matters into their own hands when it comes to financing the improvements or new systems because it actually works out a lot cheaper than with the Governments finance scheme.

Mixed Messages

A government intent on Fracking in areas of natural beauty, claiming to be the greenest government ever and supporting companies with terrible environmental reputations (BP etc) surely will not be taken seriously by the public.

Investment in shale gas will benefit only those with already deep pockets and friends in high places, most of the gas extracted will disappear into the EU and we will not feel the benefit in the UK, not to mention the damage it could cause to health and environment.

On top of all of this a new runway at Heathrow has been proposed, not the right message for a country and a European Union attempting to cut emissions 20% by 2020.

In recent weeks the government scrapped subsidies for onshore wind and commercial solar, slashed the energy efficiency budget, lowered taxes on polluting firms and introduced a tax on clean energy.

According to The Building Services Research & Information Association (BSRIA), sudden changes to low-carbon policies have created mass uncertainty for the industry and investors.

The Government has “swept it all away” without signalling their precise intent in their manifesto. Government policies will not lead to the low-carbon society they claim they want.

Predictably, this is destroying the UK renewables industry at the point where it’s almost competitive.

Disagreement from the Industry

It’s no secret that the industry had very little faith in the Green Deal Home Improvement Fund.

The CEO of the Chartered Institute of Plumbing and Heating Engineering (CIPHE), Kevin Wellman, has consistently voiced his doubts about the scheme:

“We always felt that the Green Deal was flawed and clearly put home owners who took up the loan at a disadvantage, especially when they wanted to sell their home,” he said.

“The loan is attached to the property and added to the electricity bill, so if it was assessed for the needs of a large family wanting lots of hot water, etc.

The same rule may not apply to the new occupiers who bought it. They could be paying much higher bills in the long run.”

Financial Pressure

Secretary of State, Amber Rudd, delivered her first major speech since the general election at the Climate Change: The Financial implications, Aviva conference in London on 24th July 2015.

She stated:

“To work for everyone – and to maintain support for climate action – decarbonisation has to be sensitive to the impact it has on people’s pockets, and wider economic circumstances,”

“And that means we have to control public subsidies – taking tough decisions on what schemes and projects are supported.”

It would seem that the cost was simply too much, with small returns for consumers.

Put simply, the financial package was very poorly implemented and the stop start nature of the policy-makers has shaken business confidence and the industries desire to invest in low and zero carbon solutions.

“There has been a huge amount of time and money invested by manufacturers, merchants and their customers to try to make the Green Deal work.

We agree that in its current form it was not working. It was over-bureaucratic, the finance package was unattractive and it has been poorly implemented.

However, the concept was sound and we believe the Green Deal could have been extensively overhauled rather than scrapped altogether.

“The announcement has put paid to one of the coalition government’s flagship policies with nothing new to replace it. Regrettably, this is another case of stop-start Whitehall policy-making that shakes business confidence and damages any industry appetite to invest in low- and zero-carbon solutions to help improve cold, draughty homes and cut rising energy bills”.

What’s Next?

It is important to note that the Government’s decision to end funding to the GDFC has no impact on existing Green Deal Finance Plans or existing GDHIF applications and vouchers.

The Department of Energy and Climate Change (DECC) will work with the Government on future schemes that will be better value for money and contribute to the Conservative’s goal of insulating a million more homes over the next 5 years.

There will also be an investigation into alleged scams connected to the scheme. Cowboy firms were reportedly posing as authorised Green Deal providers and charging improvements which were then never carried out.

We will have to see what happens next with the government’s green policies. David Cameron claims to want the conservatives to be the “greenest party ever”, let’s see some proof rather than the back tracking on green energy we have seen in such a short space of time.

More people are investing in renewable energy on a domestic level, as well as investing in methods like insulation to improve the efficiency rating of their homes.

Solar PV and Solar thermal, Heat pumps and bio fuel boilers are all becoming more popular.

We at Logic4training are big supporters of the Solar industry and improvements on energy storage will mean that Solar will, eventually, get it’s moment in the sun.

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