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Green scheme is not yet the real deal

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Greg Barker’s recognition that the mechanics of the Green Deal are not going to work for everybody is undoubtededly welcome

As the climate change minister seems to have realised, for many households, the mathematics do not add up - improved energy efficiency will not yield a long-term financial saving.

Hard-to-treat homes, with no cavity walls or connection to the gas grid for example, will be more expensive to heat and insulate than typical properties. Therefore a return on investment is less likely to accrue.

Those in fuel poverty cannot afford to heat their homes properly at it is, so their scope to cut fuel bills through energy efficiency improvements is limited.With energy efficiency improvement installed, any slim savings may be eaten up with increased energy use to increase the comfort levle of the home.

It seems illogical that low-income households should be prevented from installing measures such as wind-turbines or solar panels through the Green Deal

Luke Hildyard

So Mr Barker’s acknowledgement that the new Energy Company Obligation “will provide additional funding for the vulnerable and those in hard to treat homes who may need additional support” is particularly welcome.

The recent NLGN and British Gas report, Paint the Town Green, proposes a re-focused supplier obligation, mandating energy companies to meet specific targets in terms of carbon reduction and energy efficiency improvements to the homes of the fuel poor (measured according to the Standard Assessment Procedure or SAP rating). Suppliers would be required to meet these targets from homes who were unable to access the Green Deal

This would represent a move away from the overly-prescriptive targeting of particular areas and demographics in favour of a clear focus on the key objectives of Climate Change mitigation and Fuel Poverty alleviation.

Our report also recommends a heightened role for local authorities in driving Green Deal take-up. Again this is something that the Government appears to have acknowledged. Energy secretary Chris Huhne recently suggested that “councils will be able to promote the renewal of whole neighbourhoods” through the scheme. This makes a great deal of sense. If Green Deal providers from the private sector partner with local authorities, they will enlist their local knowledge and communication channels for marketing the scheme, as well as the endorsement of a trusted local body.

Pilot studies also indicate that the economies of scale achieved through an area-wide approach could reduce costs by 20-30%.

Our main criticism of the Green Deal as it stands concerns its failure to encompass microgeneration. The Government’s retention of the Feed-in Tariff and the Renewable Heat Incentives demonstrates its recognition of the need for household energy generation from renewable sources. It seems illogical, therefore, that low-income households in particular, should be prevented from installing measures such as wind-turbines or solar panels through the Green Deal, particularly when there is no public money at stake.

This represents a contradiction that will need to be addressed sooner rather than later. However, if forthcoming legislation acknowledges both the limitations of the scheme, and those of central government in its implementation, the Green Deal overall will be a positive step towards tackling climate change and fuel poverty.

Luke Hildyard, researcher, New Local Government Network

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