Carbon Brief’s essential Green Deal news roundup
The Department of Energy and Climate Change (DECC) has launched its flagship home energy efficiency programme: Green Deal with it – to quote the new accompanying ad campaign. No, we’re not sure it works either. But it’s trending on Twitter and the media attention may help reverse a general lack of public awareness of the scheme. Here’s our roundup.
What is it?
The BBC says: “Under the scheme, households can use cheap loans to spend on energy-saving improvements, such as insulation and new boilers, with no upfront cost.”
At the Guardian, Leo Hickman is running an eco audit piece on the deal, inviting contributions from people working in the area on what the Green Deal is and what it could mean for UK energy and climate policy.
If you’re not into fancy liveblogging, though, the Telegraph and Guardian both include a good, old-fashioned guides for anyone wanting to know more. And last week, we looked around for more information on the key criticisms of the scheme.
Will it work?
In theory, the Green Deal’s ‘ golden rule‘ has it that households will not pay any more on their bills – even when they’re paying off their efficiency installation – because the savings should offset the extra cost of the scheme. The Guardian quotes a letter by energy minister Greg Barker which says:
“There are a number of important consumer protections which will be embedded into the green deal: the savings will always be greater than the costs.”
But it says commenters are worried this won’t work. It quotes Alan Milstein, chairman of the Residential Property Surveyors Association, who points to features like penalties for early repayment and advises consumers to look at alternatives.
The Guardian also points out the government is offering cashback to early adopters as an extra incentive, however.
Is it getting much interest?
Before the launch, some news outlets, including the Mirror and Telegraph, were predicting the Green Deal’s early demise, pointing out that five households had signed up to the scheme by last week.
But the Mirror today says “tweets from two Green Deal assessors suggested hundreds of assessments were taking place” according to a DECC spokesperson.
Talking of interest…
There’s been a fair amount of speculation over interest rate at which consumers will pay the Green Deal back through their energy bills. According to BusinessGreen the Green Deal Finance Company confirmed on Friday that the interest rate on payback will range from 7.67 per cent for a 25-year loan to 7.96 per cent for a 10-year loan. BusinesGreen (which also published a comment piece) writes that under this rate:
“It is possible that households will end up paying twice the amount of the initial loan in repayments, potentially deterring many people from taking up Green Deal packages. Moreover, should energy prices buck current trends and start to fall, the payments may contravene the golden rule by eventually outweighing savings.”
In a tweet, Friends of the Earth campaigner David Powell highlights that research done two years ago indicated an interest rate of over six per cent might put people off:
Image - Screen Shot 2013-01-28 At 11.33.42 (note)
Who wins?
The government’s press release today has furnished the two quotes most outlets are using to illustrate the Green Deal’s selling points. Deputy Prime Minister was all about the business benefits. According to Sky News (and everyone else), he said:
“The UK green sector is a success story. It is the sixth largest in the world and has a crucial part to play in building a strong economy. The Green Deal will support thousands of jobs – not just over the next few years, but in the long-term.”
Meanwhile, energy and climate secretary Ed Davey emphasised the creature comforts angle (quote taken this time from the Metro), saying:
“Improve the look and feel of your home, make it cosier and at the same time save energy – what’s not to like?”
But there’s speculation over whether the Green Deal will give consumers much in the way of benefits.
John Vidal isn’t sure it’s all cosy homes and jolliness. He writes in the Guardian that he fears the financing is too complicated for it to work. He also says it’s unlikely to help householders:
“I don’t trust it. […] I can only think it’s another clever instrument dreamed up by the Tories to profit City financiers and their chums in the giant energy companies – the three groups who have fleeced us rotten with their austerity measures, mis-selling and profiteering.”
Possibly rather unusually, Vidal appears to agree with the Telegraph’s Ian Cowie. He writes that the scheme’s fundamental flaw is asking people to run up more debt when most are already finding it hard to keep their heads above water. Cowie advises readers to clear their debts and then spend their new-found disposable income on whatever they like.
Energy Bill Revolution campaigner Ed Matthews from also appears in several articles. He says the current efficiency plans won’t be enough to stop fuel poverty increasing as gas prices go up, instead calling for the government to ring fence green tax revenues for insulation.
Could the Green Deal make your house harder to sell?
The Guardian investigates the claim that Green Deal installations could make houses harder to sell, as the scheme is attached to the home – not the individuals who take it out. It quotes one mortgage advisor who says this could put off potential buyers if they don’t like the improvements.
It also notes that new owners may be tied into paying for another Green Deal assessment, according to a clause in the Green Deal Code of Practice. According to barrister Rachel Tandy:
“This could mean that they are assessed as likely to use more energy. If they have outstanding energy debts the provider must also take this into account, but they are not obliged by the Code of Practice to consider any other credit problems when assessing affordability.”
Upsides of energy efficiency
Amid all the concern about interest rates and confusing financing, most outlets are still all in favour of making homes better at conserving heat.
A couple of articles remind us why all the fuss about energy efficiency started in the first place. The Independent takes us through the most cost-effective energy efficiency measures – number one being draught-proofing, apparently. And the Telegraph has produced this videoof how a nice couple converted their home into an energy-saving eco house.