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Green Deal: Breaking the golden ruleJune 2014

Alan Gilbert General Manager

Written by Alan Gilbert, General Manager BSRIA Instrument Solutions.

Re-vamped and now re-launched, the “New” Green Deal is with us. Will it be more successful than the previous incarnation? Do we now have an opportunity to make a real reduction in energy usage?

The previous scheme has been roundly criticised for its complexity, so the new scheme has set out to address some of these failings. In particular, the “Golden Rule” was at the heart of the Green Deal, intended to deliver a net saving to participants. The rule essentially required that levy payments on the Green Deal loans should be less than savings participants made through lower energy bills as a result of the efficiency improvements. Whilst it’s important for participants to see value for money, it does mean that participants couldn’t shop around elsewhere for cheaper financing, or undertake more costly improvements. The upfront charge of £120 for an environmental assessment was also an immediate barrier to participation.

The new scheme certainly appears to offer a simpler process for qualifying for funding. For example, the first £100 of the assessment can be reclaimed. The funding structure is also easier to understand, with a £500 payment to anyone who installs energy-efficient measures within 12 months of moving into their property. There will also be a further £1,000 cashback which will be available to all, irrespective of when they moved in, if they fit any combination of two improvements from a list of twelve. Participants can now also claim cashback without taking out a Green Deal loan for installing energy-efficient measures, as long as the work is done by a Green Deal installer.

So the government is to be congratulated for listening to the criticisms of the scheme and re-viewing and amending the access to the funding. But, will the scheme really deliver the change that is required? Well, maybe not.

If the scheme is to be considered a success it needs to have good engagement but it also needs to ensure that the greatest level of energy savings are achieved for each participant, as far as is practical. For example, BSRIA has long been a champion of airtightness testing in the industry, and it seems self-evident to us that this needs to be addressed in the domestic housing stock. If you live in a “leaky” house with poor airtightness, you could choose to have a new front door fitted and a nice new efficient condensing boiler, but if the house is leaky, the benefit from those two funded choices will be limited.

For the Green Deal to be considered a real success there needs to be some monitoring of the return on investment, which should be maximised through installations which offer the highest energy savings practicable for each scheme participant.

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