Green Deal gets the green light

The Energy Bill was passed into law last week, paving the way for the coalition’s energy efficiency Green Deal scheme. Alex Blackburne takes a look.

Green Deal, the self-styled ‘flagship’ energy efficiency scheme, looks all set for a launch next autumn, after the UK’s Energy Bill was approved into law last week.

Millions of homes and businesses could profit from the policy; which aims at making energy efficient improvements to existing buildings, such as cavity wall and loft insulation, with businesses shelling out the initial cost, before being reimbursed through the newly-passed act.

In their summary of the proposal, the Department of Energy and Climate Change (DECC) state how “reducing demand for energy through eliminating waste cost effectively is one of the best ways to reduce emissions”, with the Green Deal scheme at the forefront in terms of implementing such energy saving measures.

The Energy and Climate Change Secretary, Chris Huhne, claimed a “huge hurdle” had been passed after the approval of the Energy Bill, and added that the scheme would be simple for consumers to handle.
“The coalition is doing all it can to bear down on energy prices, but insulation will provide the long-term help to manage bills.

“When it’s introduced, the Green Deal will be as easy as ABC by making work affordable, providing bespoke independent advice and choice in the market from well-known and trusted high street names.”
Climate Change Minister Greg Barker insisted the scheme would not just reap energy efficiency rewards.

“As well as helping people save money through home energy improvement, the Green Deal will be a massive business opportunity,” he said.

“It’s expected to attract capital investment of up to £15 billion in the residential sector alone by the end of this decade and at its peak, the Green Deal could support around 250,000 jobs.”

However, the Green Deal does have its sceptics.

“In principle the Green Deal sounds like a nice idea, but we suspect that it won’t have much practical impact,” said John Constable, Director of The Renewable Energy Foundation.

“Consumers will be reluctant to get involved with a scheme that is complicated and involves an on-going charge on the property.”

“We are particularly concerned that the measures installed will not actually deliver the modelled savings, thus leaving householders paying for the ineffective measure and the energy they haven’t saved as planned.

“The potential for bad installation in an over-excited market is obviously real.”

Dustin Benton, Senior Policy Advisor at environmental think tank, the Green Alliance, outlined three aspects of Green Deal which were crucial to its success.

“The Green Deal has the potential to deliver very significant reductions in heat demand, but it will need to feature low interest rate and [have] a comprehensive approach to retrofits.

“[It will also need] a clear trajectory to move average home and business premises from E rated to A rated energy use by 2050, with interim targets.”

Meanwhile, Guy Newey, Senior Research Fellow in the Environment and Energy Team at the Policy Exchange, admitted Green Deal would have to run in conjunction with other schemes in order to reap its desired rewards.

“Its success will depend on how it fits alongside other policies like a clear carbon price and other extra incentives,” he said.

“It should only be seen as part of a wider effort to encourage greater energy efficiency.”

The innovative legislation is set to receive detailed guidance from the industry between now and its formal introduction in autumn next year, as it attempts to prepare homes and businesses for winter 2012 and beyond.

To find out more about Green Deal, download the DECC’s summary.