The Department of Energy and Climate Change (DECC) has announced a new £20 million Green Deal Communities scheme to help local authorities drive ‘street-by-street’ delivery of the energy efficiency scheme.
Under the proposals, local authorities in England will be able to bid for funding from a £20 million pot to encourage take-up of the Green Deal, which allows homeowners to make energy-efficiency improvements to their property (such as installing double glazing) with repayment taken through the property’s electricity bill rather than from individuals.
In order to qualify for the funding, local authorities will have to identify ‘target streets’ and areas in their regions that could ‘most benefit’ from the Green Deal, and then offer incentives to households in these areas to encourage them to commit. However, funding will only support those households using Green Deal finance or self-financing to install Green Deal measures.
Proposals will be judged on:
- number and total value of Green Deal plans that will be delivered;
- ‘credibility’ e.g demonstrating secured ECO funding to compliment Green Deal financed plans and specifically identifying the streets/areas targeted;
- creativity in offering local incentives to drive demand;
- sustainability in the long term (i.e. beyond the DECC funding); and
- consistency with state aid and procurement rules.
DECC has said it will also establish a Green Deal Provider Forum to look at ‘ways of supporting and enhancing the Green Deal and the energy efficiency retrofit sector’. The forum will be chaired by Ian Cheshire, Group CEO Kingfisher Plc, and will include senior representatives from the Green Deal Provider community and broader retrofit industry, with support provided by the Green Deal Oversight and Registration Body.
‘Street-by-street’ vision needed to deliver Green Deal
Commenting on the new scheme, Energy and Climate Change Minister Greg Barker said: “If we are going to deliver the Green Deal at real scale then we need a ‘street-by-street’ vision and a ‘street-by-street’ plan. It starts here! However, local authorities really know their areas best. They know which streets and properties could most benefit from a Green Deal to improve their energy efficiency, and what local people need to provide them with a greater choice.
“The Coalition is committed to helping hard pressed consumers and this £20 million funding will help more families benefit from the Green Deal, making homes warmer and more efficient, and protecting consumers against rising energy bills.”
Local authorities will be able to bid up to 31 December 2013 or until the funds are ‘exhausted’.
The new funding pot comes after official statistics released last month showed that despite government’s predictions that up to 14 million people would sign up to the deal, to date, only four people have Green Deal plans ‘pending’. This is just 0.01 per cent of the 38,259 householders that have had assessments to improve the energy efficiency of their homes.
Many people have criticised the government scheme, with Shadow Minister for Energy and Climate Change, Luciana Berger, saying that the Green Deal was a ‘shambles’, after Barker admitted in November 2012 that that no UK householders had signed up to take out the energy-efficiency loans, despite the application process having been open for over a month, and DECC offering homeowners up to £1,000 if they signed up as ‘early adopters’.
Critics say reasons for the slow uptake range from customers being ‘confused’ over the deal, overly high interest rates (around seven per cent), and reluctance to attach a 25-year loan to a property – which many think will affect saleability. DECC refutes this latter claim however, pointing to a recent joint report by the University of Cambridge, University College London, and the University of Reading that found that making energy-saving improvements to homes could increase their value by 14 per cent on average, and up to 38 per cent in some parts of England.
The Green Deal was initially launched by government with the aim of reducing the effects of ‘leaky buildings’ (thought to be responsible for 38 per cent of the UK’s greenhouse gas emissions), cutting electricity bills and making financial savings equal to or greater than the costs attached to the energy bill.