Utility Week

UTILITY Week 4th April 2014

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/288477

Contents of this Issue


Page 25 of 31

26 | 4Th - 10Th AprIL 2014 | UTILITY WEEK Customers Analysis S ome 16 months aer its launch, the Green Deal is still struggling. The latest figures from the Department of Energy and Climate Change (Decc) reveal that only 33 Green Deal plans were agreed in February – the lowest increase since the first 100 plans were agreed in May 2013 – bringing the total up to a mere 1,754. Decc has stated that, alongside the Energy Company Obligation (Eco), more than 517,000 households have had energy- efficiency measures installed and are "warmer, greener and cheaper to heat". However, the majority of this (98 per cent) has been done by Eco, with the Green Deal unable to live up to its billing as "the biggest home improvement programme since the Second World War". There have been suggestions that the interest rate of the Green Deal finance plan, which starts at 6.96 per cent APR, is a deterrent. However, in a report in January, the UK Green Building Council (UK GBC) found this "not to be the case" and said reducing the interest rate "would not be a silver bullet solution". One of the main barriers highlighted by UK GBC was "a fundamental lack of demand". This is backed up by anecdotal evidence by Green Deal provider Elite GDP. Its chief executive, Garry Stevens Smith, conducted a straw poll of 996 people, which revealed "absolutely disgusting results". Only 16 peo- ple surveyed had heard of the Green Deal. Official figures from a Decc survey on the awareness of the Green Deal do not paint a much brighter picture. In the department's tracker survey of the scheme, only 10 per cent of respondents were aware of the Green Deal in November 2012, just ahead of its launch. This had increased to just 23 per cent a year later. On top of this, almost half of people sur- veyed by Decc were unable to state what any of the key elements of the Green Deal were – including the cashback incentive and the fact that it is a pay-as-you-save scheme. John Alker, director of policy and commu- nications at UK GBC, comments: "Clearly the marketing has been pretty poor." Although the latest government figures reveal that 163,096 Green Deal assessments were lodged up to the end of February 2014, there is a general consensus in the industry that these are being done on the back of Eco, and there is not sufficient organic demand for the Green Deal scheme. Consumer watch- dog Which? claims that only one in ten assessments have been paid for. One way to promote awareness would be to undertake a major advertising cam- paign. Decc is considering spending money on a national campaign, which it hopes will spark interest in the initiative. But more needs to be done to encourage take-up of the Green Deal. One approach could be to follow the example set by the transport sector with its variable vehicle tax, whereby the most effi- cient and least polluting vehicles benefit from a lower rate. This is a recommendation by the UK GBC, which is calling for the intro- duction of variable stamp duty or council tax rates, so that the more energy-efficient homes will pay less. Alker warns it is "crunch time" for the government to try to save the scheme, add- ing that Decc needs to introduce strong and "permanent tax incentives". He believes Decc needs to "make energy efficiency a prerequisite for anyone getting an extension this summer". This would drive up demand for the Green Deal, not only by forcing homeowners who are extending their home to boost the efficiency of their property under the conse- quential improvement scheme, but by ena- bling them to install the measures at a time when they are more inclined to do so. Philip Sellwood, chief executive of the Energy Saving Trust, agrees that targeting those who are already doing work on their property is one way to give the ailing Green Deal a significant boost. "Targeting is the key," he says. "House- hold are roughly three times as likely to con- sider energy-efficiency upgrades when they are doing other things in their homes." Aside from targeting those who are undertaking home improvements, Sell- wood believes data such as that held by the Department for Work and Pensions could be used to focus on "those households that will benefit most". He adds: "It is time to focus a bit more relentlessly on those colder, least energy- efficient homes, because they tend to also be our most vulnerable homes." Sellwood says this emphasis on fuel-poor households could also incorporate a shi in messaging away from the financial benefits to promote the improved comfort levels and health benefits that accompany a warmer home. So far, the Green Deal has failed to live up to its promise and climate change minister Greg Barker's goal of 10,000 plans by the end of its first year, but there is a view that – with a few tweaks – the scheme can work. The one major factor currently preventing this is, as Stevens Smith puts it, "the sheer lack of awareness". The green what? Lack of consumer awareness of the Green Deal has seen take-up almost grind to a halt. Mathew Beech asks what can be done to raise the scheme's profile and encourage households to participate. Number of GreeN Deal PlaNs iN uNique ProPerties (cumulative total at eND of each moNth) 2,000 1,500 1,000 500 0 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Dec 13 Jan 14 Feb 14 Nov 13 awareNess of the GreeN Deal Wave 1 (3,562 respondents, November 2012) 10% Wave 2 (3,409 respondents, March 2013) 19% Wave 3 (3,424 respondents, November 2013) 23%

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 4th April 2014