Stuck in the starting gate?
It’s the only game in town, but will it be a success? MP Alan Whitehead assesses the green deal’s chances.
The green deal is on its way. The legislation to enable it – to establish the principle that you can raise a debt against the future electricity bill of your home and use it to insulate and improve its energy efficiency - is complete, and now we’ve just had a consultation on how to do it.
It’s usually the other way round, but we will find out soon more of the detail on assessors, plans, who provides the money, how it is repaid and what improvements are eligible.
What is odd about the plans is that after all the discussions and details we are no wiser about whether it will be a sweeping success or a miserable failure.
This is important because green deal requires a large number of people – the assessors the contractors, the private funding bodies, public bodies, to put a great deal of faith and investment into the process.
My take on it is that it will probably be somewhere in between – there will be some individual adopters, but not many: and the obvious water carriers for much of the work, social landlords and local authorities, will find it difficult to engage with the process and will not do so.
It is as things stand, for example quite alarming that social landlords have been excluded from taking part in the ‘affordable warmth’ element of the energy company obligation end of the green deal – the programme that underpins hard to treat homes and warmth for those in fuel poverty but who need support over and above the ‘golden rule’ cut off of the deal itself.
The ‘golden rule’ – the notion that loans will only be advanced as long as energy savings on the improvements leave bills lower than previously even after repayments have been added – remains the central problem.
How much work is done, and whether it looks to the householder to be worthwhile for the debt stuck on the bill will be the central test of making green deal work: and the government still has not resolved the issue of how the interest rate on loans expected by private financiers will affect the operation of the rule itself.
Likely rates of 6-8 per cent place big burdens on repayments and push down the amount of work that can be carried out: it does not look very probable that many householders will commit themselves to a long term charge on bills for some marginal insulation work that previously, they could have obtained almost for free. ECO looks more viable, and it may be that work on ‘hard to treat’ homes, with the large energy gain that this produces, will be the heart of the scheme: but even there the allocation of most of ECO funds for the ‘can pay’ homes and not to assist people at risk of fuel poverty seems to miss a key point about poorly insulated homes and fuel poverty: they are often one and the same, and dealing with one produces a double bonus.
This is all a worry right now, because we desperately need programmes to tackle the appalling energy inefficiency of so many of our homes, both for reasons of combating climate change and fuel poverty: and we are venturing into green deal with all the previous programmes of assistance – warm front, CERT and CESP abolished or fading away: it’s the only show in town now, and it has to work. There is still time after the consultations to get more of the fundamentals right: but I’m not holding my breath right now in the hope that this will happen.
Alan Whitehead is Labour MP for Southampton Test and chair of parliamentary groups on renewable energy and sustainable waste
We’re taking a close look at the green deal in our Focus section this week, you can read a range of articles on the subject here, and add your voice to the discussion in the forum or on Twitter using the #greendeal hashtag.