Mike O’ Connor, Consumer Futures Chief Executive said:
‘A slow start should have been expected for the Green Deal, but it has clearly not fired consumers’ imaginations and in particular people are not convinced by the Green Deal financing model.
‘Installation of energy efficiency measures, not numbers of Green Deal finance plans, should be the objective. Green Deal finance is just one way of paying for measures and other sources of finance will be more suitable, depending on the consumer’s circumstances. Consumers don’t have to take out Green Deal finance to qualify for cash-back of up to £1,000, which few consumers have taken up so far.
‘The clear indication is that Green Deal finance will not deliver the rate of energy efficiency installations needed to cut bills and meet carbon targets. While Green Deal loans can overcome a lack of access to upfront capital, for many people this will not be the best incentive to insulating their home. Government should consider stronger and clearer, incentives, such as variable council tax, to encourage more consumers to take action, particularly once the Green Deal cash back money runs out.
‘There is an additional risk that low uptake of the Green Deal will push up the costs of the Energy Company Obligation (ECO) which supports households in fuel poverty who cannot afford to improve their home’s energy efficiency. ECO assumed that consumers would use the Green Deal to part-fund expensive measures such as solid wall insulation. Figures out today indicate that delivery of ECO has got off to a slow start. The cost of delivering measures depends on what energy suppliers do, however, Government needs to monitor the programme to ensure it is delivering value-for-money, and to reduce the cost of delivering the programme. This could include using government data to target those consumers who are eligible for the programme.’
Notes to Editors:
Consumer Futures represents consumers across regulated markets. We use evidence, analysis and argument to put consumers at the heart of policy-making and market behaviour. We speak up for consumers of postal services across the United Kingdom, of energy across Great Britain and of water in Scotland.