Is the Green Deal a done deal? Luke Hildyard

The government’s flagship Green Deal initiative has had something of a kicking recently, with some rumours even suggesting that the scheme will be scrapped.

It’s difficult to understand why anyone would object to a mechanism that will enable people to improve the energy efficiency of their homes, under no compulsion, and at no cost either to themselves or the taxpayer, but that’s an unfortunate sign of the hysteria and misinformation that characterises much of the debate around energy and climate change policy.

The negative headlines are unlikely to help drive Green Deal uptake when the scheme undergoes what the Department of Energy and Climate Change are referring to as ‘a managed launch’ this October (the fact that they need to clarify when a policy launch is to be ‘managed’ perhaps explains a lot about previous launches).

If this leads to the scheme failing altogether, it would be a great shame, because there is much to commend it. The Green Deal is a simple mechanism that enables households to install energy efficiency measures at no upfront costs. Repayments are attached to the electricity bill of the particular property, rather than the individual, so there is no danger of remaining liable for ongoing payments if the original Green Deal customer moves house. The scheme’s golden rule states that any home where the projected lifetime energy bill savings from the cost of the measures are no less than the installation costs is eligible.

With sufficient uptake, the Green Deal has the potential to deliver significant positive social and environmental outcomes. Over a third of Britain’s carbon emissions come from domestic energy use. It has been estimated that roughly one pound in every four spent on fuel bills is wasted because of poor energy efficiency. In London, 55 per cent of households in fuel poverty live in homes classed as Band E or below for energy efficiency, meaning that it is unnecessarily expensive for them to maintain an adequate warmth.

Our research at Future of London indicates that there is a key role for local authorities in driving demand for the Green Deal.  Assets that Councils could use to stimulate uptake include:

• Policy levers – around factors such as planning procedures and parking charges. These could be used to
• Brand – a local Green Deal programme promoted and endorsed by the local council is likely to boost the credibility of the scheme, and allay fears around mis-selling or sub-standard workmanship;
• Data – Councils possess a number of datasets including tax records, data from planning and building control or previous energy efficiency schemes. These could be used to identify properties that fulfill the ‘golden rule’ of the Green Deal;
• Communication Channels – Council newsletters, social media feeds, websites and Council tax mail-outs could all be used to promote the Green Deal, as well as face-to-face communications from frontline staff in housing or social services departments, for example, or indeed by councillors themselves;
• Partnerships – On a similar basis, Boroughs partnerships with other arms of the local state (eg GPs or schools) and the community sector (in the form of faith groups, tenants and residents associations, transition towns and other green networks, or charities working on poverty issues or with older people)

The Green Deal also represents an ideal opportunity for local authorities to play a meaningful role in taking forward the co-operative agenda.

Some authorities are already involved in developing plans for energy co-operatives, based on the Dutch model, whereby a number of households buy their energy ‘in bulk’ at discounted rate, with the sign-up and purchasing process co-ordinated by the Council.

A similar approach could work for energy efficiency measures purchased under a Green Deal arrangement. The local authority would sign-up participants, then put the contract to provide the measures out to tender.

The Sustainable Development Commission have estimated that an area-based approach to domestic carbon reduction can reduce per-unit costs by about 30 per cent, so this would probably result in savings on the Green Deal for participating households.

These processes will not be without their challenges, of course. Throughout our research, the London Boroughs we spoke to observed the disconnect between some of the Government’s rhetoric on the Green Deal (Chris Huhne called it ‘a third industrial revolution’) and the difficulty that they’d had with previous energy efficiency schemes at frontline level, struggling to give away measures for free!

Nonetheless, it’s clear that local government can do a lot to support both the delivery of the Green Deal, and the wider effort to meet the UK’s long-term carbon reduction targets, ensuring we play a fair and proportionate role to averting dangerous climate change. In addition to these top-down incentives, the benefits to the community from energy efficiency improvements, including reduced energy bills, warmer, comfier, healthier homes and the alleviation of fuel poverty, also present a powerful driver for local authorities from the bottom up.

Luke Hildyard is a Research Associate at Future of London

For further information of Future of London’s report on the role of London Boroughs in delivering the Green Deal in London, please see http://www.futureoflondon.org.uk