Speaking at the London School of Economics, Ed Davey said the government’s flagship energy efficiency scheme will take time to develop after suffering “teething problems”.
He said the Green Deal is “unlike any normal government programme” and that “it will have to develop and evolve like any emerging market, over the next two decades”.
He added: “New business models will be challenging to develop – because they are designed to be disruptive to the old order.”
However, Davey denied that the Green Deal is failing due to the low take up of Green Deal finance plans.
He said: “The Green Deal is not just a finance package.
“First and foremost, the Green Deal is a way of helping people understand how they can save energy, how they can change their behaviour and how they can reduce their bills.”
Davey added that the Green Deal is providing good information on home improvements and providing “access to trusted companies to do the recommended work”.