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Getting a good deal from the Green Deal

Hannah Kyrke-Smith

25th January, 2012

The Green Deal and Energy Company Obligation (ECO) have the potential to reduce emissions from the UK’s ageing housing stock, create warmer homes and new jobs, says Hannah Kyrke-Smith. But will there be enough uptake?

The Green Deal and the ECO are the government’s flagship carbon reduction policies, aimed at reducing carbon emissions from homes and small businesses. We are now one step closer to their launch this autumn, with the government’s consultation on the policies now closed.

Greg Barker, the minister for climate change, said in the Guardian  earlier this month that the Green Deal will be ‘the biggest home energy improvement programme of modern times’, but we’ve been around the country and found that on the ground there is still a big risk of low uptake unless the needs of local economies and the fuel poor are ignored.

Our travels took us three constituencies where we ran workshops with MPs and local stakeholders: Hexham with Guy Opperman MP, Bristol North West with Charlotte Leslie MP, and Redcar with Ian Swales MP.

These are three distinct constituencies, differing in character and the issues they face. Hexham is a large rural constituency in the north east with high levels of fuel poverty and many off-grid properties; Bristol North West is a diverse constituency in the south west consisting of affluent areas, council estates, and heavy industry; and Redcar is a small north east constituency suffering from high levels of unemployment, people on low incomes, and vulnerable households in fuel poverty.

We brought together local people – businesses, community groups, local authorities, housing associations and more – and asked them what they see are the key challenges and opportunities for the Green Deal to help local energy saving, to give their views on the proposed policy design, and suggest improvements.

It was encouraging that most people could see the potential of the Green Deal, and are prepared to try to make it work in their local area: some local authorities are considering becoming Green Deal providers; community groups want to help encourage take-up and raise awareness; housing associations plan to continue to ‘green’ their housing stock; and local tradesmen aim to become accredited installers.

But with the proposals as they currently stand, there were many questions about how it will actually work in practice, and the workshop participants were not convinced that the Green Deal could be the whole solution to reducing energy use and creating warmer homes in their areas.

A number of problems came up in all three workshops, which need to be tackled before the policy can deliver on its promise. The details are in our latest policy insight, Getting a good deal from the Green Deal: views from local communities, but the headlines are:

·       Social issues: participants in our workshops felt the schemes aren’t yet designed to support the fuel poor.

·       Imbalance: tenants, rather than landlords, are the ones being given responsibility for upgrading properties, even though they are not the long term beneficiaries.

·       Local economy: in the current design, local economies are unlikely to see the benefits of new business generated.

·       Trust: people are wary of how the scheme will work in practice. Public trust in energy companies is very low and they are likely to be one of the main delivery agents.

·       Incentives: even schemes delivering free energy efficiency improvements have found it hard to attract takers, so the Green Deal, which is based on loans, has an even steeper hill to climb.

We came away from the workshops with five key recommendations to tackle the problems and make sure the Green Deal works for those that need it:

·       Help to encourage take-up, particularly by using the Green Investment Bank to help deliver preferential 2 per cent interest rates on loans.

·       Give more support to the fuel poor, by increasing funding through the Energy Company Obligation.

·       Make sure local economies benefit, by supporting Green Deal accreditation for small businesses and tradesmen.

·       Spread the message, by introducing a national marketing strategy and give existing community networks communications resources.

·       Help to drive real demand reduction, by making sure the most effective measures are installed first and working with local agencies to help people change their inefficient behaviours.

If the government gets the Green Deal right and integrates it with other, complementary energy efficiency measures, there is huge potential for millions of homes in the UK to shift to greener living, saving energy and money. But it is not there yet.

We’ve submitted our response to the consultation, and will be discussing it with Greg Barker in a meeting with him and the MPs involved in this work at the end of the month. The government says it is listening, but if it is then it needs to take on board the major concerns and recommendations in our report and other consultation responses to ensure the Green Deal really is a good deal. 

Hannah Kyrke-Smith is a policy assistant at environmental think tank Green Alliance

Getting a good deal from the Green Deal: views from local communities
presents conclusions from three constituency workshops held in late 2011 with MPs and local stakeholders, under Green Alliance’s Climate Leadership Programme. It is available to download from the Green Alliance website, at www.green-alliance.org.uk


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