Wednesday, 23 July 2014

Research uncovers green deal limitations

The government’s flagship energy efficiency scheme will only fund a small proportion of work to improve homes without subsidy, according to research.

Charity Bioregional has found green deal finance will only cover £4,000 of energy efficiency work at a typical home, with a further £10,000 of work for flats or £20,000 of work for houses falling outside the scope of the scheme.

Under the green deal households will be able to get energy efficiency measures installed without paying any upfront cost. They will pay for the measures using savings from fuel bills over 25 years.

A key element of the scheme, the ‘golden rule’, states that fuel bills should remain lower than they would have been without the improvements, even when the repayments are included.

Bioregional has been carrying out research and modelling for a scheme to retrofit 2,500 homes in the south London suburb of Hackbridge. It found the golden rule would exclude the most sophisticated measures for improving energy efficiency, even if no interest were charged on the loan.

Many of the measures that would be eligible for green deal finance - such as loft insulation, heating controls, cavity wall insulation, lagging and boiler exchange – have already been available at a subsidised rate through the carbon emissions reduction target initiative.

This means many social landlords have already fitted the measures to their properties. Homeowners have been less keen to take up the technologies, questioning how enthusiastic they will be about the green deal.

Measures that don’t qualify for green deal finance – such as solid wall insulation, double glazing, and heat exchange ventilation – could be subsidised by a new charge on energy firms, the energy company obligation. Details of how this will operate, and more information on the green deal, are expected in a consultation in the next few weeks.

Joanna Marshall-Cook, energy project manager at Bioregional, said: ‘An awful lot of social housing has already taken up the basic measures using CERT funding. I’m not sure what scope there is for social housing providers to use that unless they are going to go down the solid wall insulation route, and that would need ECO funding.’

A spokesperson for the Department of Energy and Climate Change said: ‘The green deal will tackle the issue where some technologies, like solid wall, are more expensive and that is exactly why we will have the obligation on energy companies.’

Inside Housing campaigning for social landlords to be given fair access to ECO subsidy and feed-in tariff payments. See our campaign page for more, or pledge your support

The Bioregional research

Measures covered by basic green deal finance

  • Loft insulation (providing there is no existing loft insulation).
  • Draught-proofing
  • Boiler exchange
  • Thermostatic radiator valves
  • New heating controls
  • Lagging for the hot water cylinder
  • Lagging for hot water pipe-work on external walls and floors
  • Cavity wall insulation

More advanced measures that would require extra subsidy

  • Solid wall insulation
  • Under-floor insulation
  • Double glazing
  • New doors
  • Heat exchange ventilation

Cost of basic measures: £4,000 (flats and houses)

Cost of advanced measures: £10,000 (flats) to £20,000 (houses)

Carbon dioxide reduction from basic measures: 21 per cent (flats) to 32 per cent (houses)

Total CO2 reduction possible using all measures: 28 per cent (flats) to 47 per cent (houses)

Readers' comments (2)

  • F451

    The more it is examined the less green and the less of a deal the Green Deal is exposed as. Effectively causing home occupiers to take on a 25-year loan, that is transferable in the event of the home changing hands, and yet not delivering the potential energy saving outcomes seems a very poor deal indeed.

    Why would anyone want to take out a 25-year loan for a defective product, that by the end of the loan period will be so redundant as to be beneath worthless - and how will those forced to take a loan out for their eduction, to have taken out a loan against their future pension, and to be existing on a reducing wage ever afford all the personal debt the government is forcing upon them.

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  • Aeodwrath

    Tis but a fig leaf and will not help acheive any of the stated claims. the FIT scheme was a much more ambitious and effective measure for reducing carbon and helping reduce fuel bills. RIP FIT and the new green economy industries and jobs that are being snuffed out.

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