From:
Ryan Johnson,
Managing,
Director Emplas

That the Government has scrapped the Green Deal shouldn’t come as a surprise to anyone and it will be missed by few.

With an aim of improving the energy efficiency of more than 14 million homes by 2020, the Green Deal was launched by the Government in October 2012 but it started to stumble and stutter almost immediately. Too much complexity meant that industry and consumers simply never got to grips with it.

In its first year fewer than 1,000 households signed-up for energy efficient home improvements through the scheme. There were too many stages, too many assessments. The Green Deal loan itself, which was paid back through electricity bills, is too complicated and the interest rate was too high compared to other finance options.

For our own industry, long and protracted discussions about whether windows and glazing would or wouldn’t be included in the scheme meant that it never really secured meaningful industry buy in.

The Golden Rule – the principle that the cost of the work must be less than the expected savings over the length of the Green Deal programme – was simple in theory but less so in practice in glazing, introducing new partial payments for homeowners where the cost of delivery were judged not to meet the Rule.

Further complexities around qualification as a Green Deal Installer, payments and routes to market suppressed industry take-up. This was evident from the off. The Emplas State of the Market Survey revealed that just two years after its launch 98% of those polled did not expect to win any business through the Green Deal in 2014.

This represented a hardening position compared to 2013 2013, when a third of respondents said that they hoped to win business through the programme. None of those polled as part of this year’ study had won business through the Green Deal in the preceding 12 months.   

The Green Deal, to quote a footballing analogy, ‘lost the dressing room’ and lost it almost right at the start of the programme. Government failed to make it accessible to industry and without its support and the negative headlines which accompanied the scheme, it failed to move forward with any real momentum.

But we must also be careful not to dismiss it or the principles which lay behind it. That the £120m allocated to the Green Deal Home Improvement Fund in July 2014 – something that was meant to last until April this year – was hoovered up by homeowners in just six weeks, is evidence of the demand for energy efficient home improvements.

The Government has its own drivers. The UK's housing stock is among the least energy efficient in Europe, and is responsible for nearly a quarter of our annual carbon emissions. This is coupled with binding EU targets to cut carbon emissions by 20% before 2020 and a projected 40% by 2030. Given the ‘leaky’ nature of our housing stock and the forecast that 85% of it will still be standing in 2050 and the importance of energy efficiency in homes is clear.

This may have been temporarily lost on a Government looking to shrink the cost of the state by up to 40% but it can’t afford to be for long.

Announcing the Government’s decision to scrap the Green Deal, Energy and Climate Change Secretary, Amber Rudd, said that the Government could no longer afford to operate the scheme.

Pledging a commitment to energy efficiency in the future she said: "Together we can achieve this Government's ambition to make homes warmer and drive down bills for one million more homes by 2020 - and to do so at the best value for money for taxpayers."

Consciously or sub-consciously, she has hit the nail on the head. The Green Deal was developed in the absence of effective consultation with industry and at what cost to it and Government. If it wants industry to step-up and support it in reducing UK emissions, it needs to think far longer term and far more simply.

The Green Deal has at best raised awareness but ultimately failed to deliver a meaningful impact. A Government which is focused on cutting bureaucracy and state administration might now wish to consider a cut in VAT on energy efficient home improvements. This would be more effective and far simpler to administer, delivering direct benefits to industry and to consumers.