ECO Scheme Still More Successful Than Green Deal

5th July, 2013

Five months after its launch, not a single household in the UK has completed the process of making their home more energy efficient under the government's Green Deal, according to figures released this week. Nearly 40,000 assessments in which experts visit properties to see what measures would best be undertaken have been carried out. Nevertheless only four households are registered in the system as finalising Green Deal plans, whereby works are installed and paid for by the scheme's financing. A further 241 households have confirmed they would like to proceed with financing. But not a single household has what is known as a "live" Green Deal plan, where the works have been undertaken and details of the repayments on electricity bills have been passed to its energy supplier.

The figures include data up to 16 June. More than 5,000 people have registered for the scheme's "cashback", with 968 being paid a total of just over 250,000. Virtually all of the cashback payments 99% of them were for boiler upgrades, with just one for loft insulation and one for solid wall insulation. Last year the climate minister, Greg Barker, wrote in the Guardian: "Eight million solid wall homes have had no affordable solution to insulate. The Green Deal will change that." Barker said on Thursday that the reason for the small number of plans in their final stages was because few companies have been setup to offer the finance. "It's only the last few weeks, in fact in some case the last few days, that the first wave of Green Deal finance has been available through a very limited number of companies, I think five in total... so you wouldn't expect them [householders] to have gone all the way through the process. But there are another 50-plus companies hard on their heels that we expect to come into the market in the next few months so by the end of the year the Green Deal Finance Company say it could be as many as 60. Now that would be transformational."

There was more substantial progress in helping the fuel poor benefit from insulation. More than 80,000 households had energy efficiency upgrades under a parallel scheme called the energy company obligation (ECO). Unlike the Green Deal, whereby homeowners must take out a loan to cover improvements, paid back through additions to energy bills, the ECO requires energy companies to fund improvements for lower income households. "It's only just getting started, but the early signs are encouraging. 38,259 green deal assessments is also a clear sign that many consumers genuinely want to make their homes more efficient; but we are keen to do more," Barker said.

Consumer experts expressed concern at the initial take-up for the scheme. The executive director of Which? magazine, Richard Lloyd, said: "These figures reveal a worryingly slow start for the Green Deal. The government must ensure consumers have detailed information about the companies offering Green Deal finance and their packages, so they can decide whether it represents good value for them. "With rising energy prices the top consumer worry, measures that help people make their homes more energy efficient are vital to help save money on bills. However, as with any financial product people should consider their own personal and financial circumstances, tread carefully, check the small print and shop around."

Mike O' Connor, the chief executive of the consumer watchdog Consumer Futures, said: "A slow start should have been expected for the Green Deal, but it has clearly not fired consumers' imaginations and in particular people are not convinced by the financing model." The Guardian revealed on Thursday that energy suppliers are still struggling with the IT systems and legal arrangements they need to offer households insulation and other improvements under the scheme.

Concerns surrounding the policy have prompted a group of construction companies, led by the Green Building Council, to write to Barker, Ed Davey, the energy and climate change secretary and his shadow Luciana Berger, asking for a cross-party consensus to salvage and improve it. They also urge strengthening measures, such as a discount on stamp duty or council tax for households taking up Green Deal offers.

Neil Schofield, head of government and external affairs at Worcester Bosch Group, which makes boilers, said: "The official figures tell a sorry tale, but we still believe the scheme can work if it is reformed and installers are made a central part of the sales process." Dave Timms, the warm homes campaigner at Friends of the Earth, said: "Today's figures are a disaster but not unexpected. The Green Deal's potential has been absurdly overhyped by ministers to cover the fact they didn't have a comprehensive strategy for insulating the UK's cold, expensive to heat homes. "Saving energy is vital for making energy bills affordable and tackling climate change, but with only four households taking up loans since the Green Deal began, the government's efforts are falling embarrassingly short. Lower interest rates, more incentives and tough regulations on landlords to improve the worst insulated rented homes would all increase the take-up of energy efficiency measures."


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