Disappointing Start to Government Green Deal Scheme Prompts Better Incentives
3rd March 2014
Green Deal Scheme receives 'Better incentives'
The Government’s Green Deal scheme, initiated as part of a nationwide energy efficiency programme has had a disappointing first year, with just over 12,000 participants. Figures have fallen month-on month, and a 21% drop was recorded in December from November.
In an attempt to encourage homeowners to take part, the Government has increased the cash-back rewards substantially for some Green Deal measures including; solid wall insulation - raised from £650 to a maximum of £4,000 cash-back; double glazing - a 50% rise in cash-back incentives from £320 to £650 and insulation for ‘room in roof’ has increased from £650 to £1,000.
In addition the period for applications has been extended until the end of June this year, with vouchers redeemable now until September.
The flagship scheme initially encouraged households to borrow money for energy efficiency improvements, which could be paid back through their electricity bills. However, the slow uptake of the offer prompted the incentive of the cash-back scheme with householders contributing a percentage to the costs of the works. This figure too has been raised, from 50% to 65%, which means that more householders will be eligible for the maximum cash-back incentive.
A high percentage of the cash-back applications have been for boiler replacements, which unfortunately, have little bearing upon the overall energy usage. It is thought that many householders across Britain are under-heating their homes due to rising energy costs, although Energy and Climate Change Minister, Greg Barker, says, "Inefficient homes use a lot more energy than they need to, which consumers pay a high price for.” He hopes that the changes to the Green Deal initiative will encourage families to make improvements to their homes that will create warmer environments, in energy efficient homes and in turn, help to lower energy bills.
Brian Berry, from the Federation of Master Builders is not convinced and voiced his thoughts after their ‘report card’ was issued after the first anniversary of the scheme, "Our report card shows that the main problem the Green Deal faces is that consumers are not interested because of the limited appeal of the financial incentives currently being offered. This in turn means that most small local builders are reluctant to spend their time and money becoming certified Green Deal installers, when the potential customer base is really still in its infancy."
Mr Berry goes on to speak from a contractors point of view and believes that the Government needs to accept that tougher measures need to be put in place to increase demand, "The single most effective measure to kick-start demand would be to reduce the rate of VAT from 20% to 5% on all domestic repair and maintenance work, including energy-efficiency improvements. This would be a real incentive to home owners across the board to think about getting a professional tradesperson in to quote on a variety of repair and maintenance projects.”