The rise of the slow starter
The green deal, mocked for its ineffectiveness, low take up and failure to register with the public has been transformed in its current iteration to such a degree that it has failed once again. This time the cause was its unexpected success.
The original scheme offered high-interest loans to fund energy efficiency work on properties, which was then paid back out of the resultant energy bill savings. The commitment, cost and uncertainty failed to attract takers however and less than a third of the originally planned loans were made by May 2014.
In contrast, the “free money” scheme that was the Green Deal Home Incentive Fund (GDHIF) only opened in June yet its entire £120m budget has already been distributed due to unexpected and overwhelming demand.
The scheme attracted thousands of applicants looking to take advantage of incentives worth up to £7,600 to increase the energy efficiency of their property.
This “free money” deal unsurprisingly led to an inundation of applicants and a government about-turn with the scheme closing with little warning and in a great rush.
Amber Rudd, parliamentary under secretary of state for energy and climate change, spun the decision by highlighting that:
“The GDHIF is a world first and in a short space of time it has proved extremely popular.
“We were always clear there was a budget which is why we encouraged people to act quickly.
“As a result, thousands more families will now benefit from Government help to have warmer homes which use less energy.”
This ‘brave face’ was not echoed by other commentators however with Richard Twinn, policy and public affairs officer at the UK Green Building Council saying:
“The sudden and immediate closure of this fund is another setback for the energy efficiency industry because companies have specifically geared up to market and deliver through this scheme.
“These constant changes are not helpful to industry. We now need urgent clarity as to whether Government will bring forward any more money to ensure continuity of Green Deal work.
“This does demonstrate that we need long-term drivers, not short term pots of cash to avoid this continual cycle of boom and bust.”
Neil Schofield, of the Worcester Bosch Group, one of the businesses that stood to benefit from increased consumer investment, added:
“The tragedy is that, for once, DECC has come up with a scheme that works. It’s a body blow and a triumph for short-termism.”
Jonathan Reynolds, shadow energy minister said:
“This is a shocking act of incompetence. It will leave many customers who have paid £100 for a green deal assessment out of pocket, with little prospect of them having the work they were promised done, and an insulation industry in despair at the stop-start nature of this government’s policy.”
DECC have yet to confirm as to whether the GDHIF will return however it is a certainty that the “free money” era of phase 2 of the Green Deal has ended for good.