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Green Deal success or failure?August 2014

Written by Kystyna Dawson, Senior Manager in BSRIA's Worldwide Market Intelligence.

“Due to overwhelming popular demand, the Green Deal Home Improvement Fund is closed for applications with immediate effect” reads a press release on the DECC website. The press release goes on to claim that the Green Deal Home Improvement fund has been “extremely popular” and “as a result, thousands more families will now benefit from Government help to have warmer homes which use less energy”. Sure enough they will, providing it turns out that the money claimed will be well spent; the question is however, will it really have an expected long term impact on the achievement of our energy efficiency targets and on the desired deployment of renewable technologies? The home improvement fund did not include funding for renewables and to get the RHI deal you need a Green Deal assessment.

The criticism of the previous incarnation of the Green Deal was the complexity surrounding accessibility of the funds, so the Government reviewed the mechanisms delivering a new scheme which allowed for easy access to funding. Going from one extreme to the other seems now to have caused damage to the scheme that might prove irreparable in the long term and overturn its initial success.

The scheme has been closed because the funding allocated to the scheme for this year has now been spent, less than two months after the scheme was launched; it is not yet known how many households have managed to take advantage of the scheme but it seems clear that thousands of home owners who have already paid some £100 for a Green Deal assessment will now potentially be out of pocket.

Anger and disappointment is also to be expected from installers who have often invested time and money in making themselves familiar with the scheme that was supposed to help develop their business. 

Despite clear signals coming in during the first weeks after the scheme was launched that the consumers liked its generous offer (home owners claimed £25 million vouchers within the first month - approximately half this year’s fund allocation), the Government seems to be taken by surprise with the fact that funds available within the scheme have been exhausted so promptly.  It is also not clear yet if there will be a release of additional funding to continue the support of the scheme further in this year.

However, even if it happens there will be many home owners and installers disillusioned with the Green Deal scheme. It is likely that householders will either try to be more vigilant next time causing another “rush for cash” when funds are made available again or will just become indifferent to any other long term support actions. Installers who will not be able to achieve their business targets will adopt a “wait and see” attitude next time.

There is no arguing that to deliver an improvement in energy efficiency and address climate change there is a need for Government intervention, be that through legislation or incentive, but whichever method is used it has to be introduced with a long term vision that will bring about effective and sustainable change.

Schemes like the Green Deal Home Improvement and RHI require credibility and consumer trust to become really successful. Closing the GDHI so abruptly damages both.

What consumers and industry need are clear long term drivers, thought through ideas and well managed schemes.  Without that we will constantly be going through a cycle of boom and bust that will take us nowhere near to successfully developing the house renovation market able to achieve government energy policy goals and to benefit the households.

So the current Green Deal Home Improvement scheme has been a success, yes, if you are looking at it from a short term perspective, but if you want to effect long term change the jury is still considering their verdict.

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