by Janet Wood
The Green Deal energy efficiency measure passed its last legislative hurdle on Monday, when final regulations were laid before MPs. But finalising the policy did little to dampen questions about how it would operate and, crucially, whether its terms would be attractive to consumers.
Richard Hall, energy expert at Consumer Focus, raised the question in recent evidence to the Energy and Climate Change select committee of how many householders would access Green Deal financing. He compared current activity under mandatory schemes delivered by energy companies, which he said were funding around 100,000 home insulations a month, with the 100,000 Green Deal agreements a year that the government had forecast.
The government has tried to kick off the scheme by promising £200 million in “cashback” for early adopters, but this is unlikely to outweigh fears over the 7.5 per cent expected interest rate. Shadow energy and climate change secretary Caroline Flint described this as “sky high”, and said the government should “use the Green Investment Bank to provide Green Deal finance at an affordable rate”, a proposal dismissed by climate change minister Greg Barker as a “blunder”.
Blogging on the Green Deal, Labour MP Alan Whitehead said 7.5 per cent interest was “a level which even in the early days of discussions was shown to put off 93 per cent of potential Green Dealers”. He suggested that subsidy should be built in by setting up a trust that received part of the revenues from carbon taxes.
This article first appeared in Utility Week’s print edition of 6 July 2012.
Get Utility Week’s expert news and comment – unique and indispensible – direct to your desk. Sign up for a trial subscription here: http://bit.ly/zzxQxx