Thursday, 02 October 2014

Green bank may not fund home efficiency

The government has refused to commit to using its £3 billion green investment bank to kick-start its flagship home energy efficiency scheme.

MPs on the environmental audit committee suggested the bank could be an important source of funding for the green deal scheme, in a report on the bank published in March.

The government’s response to the report, published yesterday, states it ‘has not reached any firm conclusions on whether the GIB ought to have a role in financing the green deal’. However, it notes its primary aim is that the green deal should be a ‘private sector-led scheme’.

The bank is intended to support private investment in environmentally-friendly projects, particularly high-risk schemes that might otherwise struggle to get financial support. Business secretary Vince Cable has said this could include offshore wind, industrial energy efficiency and waste.

The environmental audit committee recommended that the government should not rule out using the bank to support the green deal. This will see households given access to free energy efficiency improvements, with the costs repaid from fuel bill savings.

The committee also said the Department for Business, Innovation and Skills and Department of Energy and Climate Change should work more closely together on the role the bank could play in the green deal.

It said: ‘The government should conduct an urgent review to consider additional potential sources of finance for the green deal.’

Darren Shirley, campaign manager for sustainable homes at WWF UK, said the green investment bank should support the green deal so it can be made attractive to households. ‘We know it is going to be difficult to set the interest rates low enough on the green deal,’ he said.

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