Green Deal: a game changer?

Green Deal: a game changer? Yes, says Energy Saving Trust Chief Philip Sellwood – but let’s get our ducks in a row first…

‘Green Deal, green spiel’, as one audience member put it at a recent debate, but we shouldn’t disregard its potential. Personally, Green Deal is about more than just the nuts and bolts of how it works: it’s about the opportunity it creates.

Two striking, government-led examples show that Green Deal will have an impact. Firstly, since feed-in tariffs were introduced last April, there have been more than 41,000 (mainly photovoltaic) installations in UK homes, and calls to our advice centres on these issues have trebled.

Secondly, Energy Performance Certificates – EPCs – here in the UK has also had a major impact. About a quarter of English and Welsh homes now have a certificate with a headline A-G energy-efficiency rating. Research shows that, although householders understand this rating, they don’t tend to remember its recommendations for improvements. We have identified key ‘trigger points’, or opportunities to engage householders on energy-saving recommendations at this important time.

The range of stakeholders who need to be engaged in energy efficiency is vast: 26 million households. Over half cite inertia and potential disruption – not money – as the main reasons they don’t make energy-saving home improvements. We believe that reaching people at the key life stages is the answer to these barriers. When householders are already planning refurbishment projects – for example, when moving – they’re more likely to make energy-saving improvements.

Green Deal will tackle the other big barrier, finance, in multiple ways. Our Home Economics research shows that giving the nation’s housing stock a complete eco-facelift could potentially create a £280bn economic stimulus, and 4.7 million jobs in related trades – as well as saving around 48M tonnes of CO₂. Putting money in to get money out, and refurbish the nation’s homes, makes a lot of economic and environmental sense.

Whilst we hugely support Green Deal’s business-led approach, local authorities are also absolutely crucial. We have been working on some innovative programmes – in Hampshire, Birmingham, Newcastle and Nottingham – where whole areas of housing will have energy-efficiency measures installed. We help local authorities to find sustainable finance solutions, bringing together public and private investment in new ways to make the self-financing model work.

As we progress to complete insulation of those homes that can be most cheaply and effectively insulated, more attention is turning to our oldest housing stock – the solid-wall homes mostly built before 1920, of which Britain has 7.2M. Most people in fuel poverty live in our oldest homes.

Making it possible for people in these homes to pass the golden rule is the one of the biggest challenges Green Deal faces. The government believes that a new scheme – the Energy Company Obligation (ECO), which will sit alongside Green Deal – will address this challenge. ECO will provide additional funding to help people in solid-wall homes, or who are living in fuel poverty, to finance major refurbishments and still pay less overall on their energy bill. But there’s a difficult balance to strike. As ECO will be financed by a cost to all customers’ energy bills, it could become regressive – hitting the poorest hardest, and potentially undermining the policy intention.

Enter smart meters. We tend to think of these as shiny new computerised things, not as potential lifelines for poorer people struggling to pay their bills. However, an innovative project – the first of its kind – is helping to address fuel poverty through energy efficiency. The SHIMMER pilot, involving the Energy Saving Trust, London Rebuilding Society and HomeZone, took the opportunity of feed-in tariffs and solar PV as a starting point. SHIMMER provides real-time, monetised information on energy consumption, and delivers tailored advice and financial incentives to encourage householders to reduce carbon emissions and energy bills. Its online platform (laptop and internet access provided free) integrates smart energy management with innovative household finance applications, such as a budgeting tool and a utility switch service.

Trust is a major issue. We have found this throughout the supply chain: homeowners need to trust installers, and installers need to trust the training they receive. Training has so far tended to be manufacturer specific, rather than giving an overview of system types for each technology. A recent Which? study, for example, claims that there are instances of inaccurate advice being given about the suitability or performance of a given renewable energy system.

Following extensive field trials of heat pumps, we are working with REAL Assurance to safeguard customers. We will be publishing information on the consumer protection provided by the MCS and REAL schemes: what information the installer should and should not provide, and how they can be expected to conduct their business activity.

Green Deal, green spiel? As long as we see Green Deal as an opportunity, not the whole solution, I’m an optimist. But let’s get our ducks in a row. We need to recognise people’s ‘trigger points’, work with local authorities, understand fuel poverty, and provide trustworthy advice and services.