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Busting Green Deal Myths

When it launches this autumn, the Green Deal will become the most ambitious home improvement programme since the second world war. It is at the heart of the Government’s strategy, not just to Green our economy but to also help family’s improve their homes, cut their fuel bills and with that, reduce the UK’s dependence on expensive imported fossil fuels. But to achieve our ambitious goals, it will need to run for nearly two decades.  A clear long term perspective, patience and pragmatism  will be vital to its success as the market for the  Green Deal builds and evolves.

In the next few weeks and months, working closely with the private sector and Local Authorities, we will put in place the final details of the scheme.  But before those details have even been announced the sceptics and the critics have been sharpening their pencils. I have no doubt that after the scheme has gone live, with the benefit of real life experience, we will want to come forward with improvements to the way it works and in due course,  additional incentives and appropriate penalties to keep it on track, as well as take account of exciting new technologies as they become available.
 However the basic Green Deal framework for allowing people to make improvements to their home without any upfront cost   which can then be paid for through electricity bills over twenty five years, from the very savings they create, leaving people better off;  that is rock solid.

To some people this sounds too good to be true and others have misinterpreted existing research or just got their facts plain wrong. So I want to address some of the urban myths about the Green Deal that seem to be doing the rounds:

  1. People won’t save money
    People can expect to save money.
    There will be two assessments to help consumers see for themselves how much they stand to save. The first assessment will take account of the average energy use of the home, and the second will look at how the occupants use the home so they can enter the Green Deal knowing how best to maximise what they will save.
    The Green Deal charge will be fixed from the start too and is designed to ensure money is saved based on existing energy prices. So if energy prices rise, which seems likely, savings will substantially increase. 
  2.  The method used to calculate the savings is inaccurate
    This isn’t true. The Standard Assessment Procedure (SAP), which is what we use to calculate how much people will save, is based on a survey of thousands of homes and is being constantly updated to take account of the latest research and experience of energy saving measures.
  3. A number of surveys and pilots have shown that people don’t save
    Research highlighted recently in the media was based on a handful of homes and included a wide range of home improvements beyond what was necessary to reduce their bills. Further, the trials were not done to Green Deal standards as they included a number of measures that won’t be fully funded under the Green Deal like solar heating which will be subsidised under a different scheme. Therefore they were not testing the Green Deal.
    Clearly Government can’t guarantee people will save money if they then change the way they use energy, for example by heating their home for longer each day. But they should still save money compared to what it would have cost to power their home in that way without a Green Deal.
  4. People will have to pay for improvement work if they want to build a conservatory
    This is simply not true. Standard sized conservatories are not included in the plans that the Communities Department has been consulting on.
  5. People will be forced to take out a Green Deal
    This is absolutely not true. The Green Deal is simply one option for funding energy efficiency measures which people may wish to consider, but no one will be compelled to take out a Green Deal Plan. Further, Green Deal is not personal debt nor standard credit scored as the finance will be attached to the electricity bill of the property.

22 pioneer providers have already signed up to be part of the Green Deal from the initial stages and more are expected, here’s what a few of them have said:

–       Sally Hancox, Director, Gentoo Group, said:
“Gentoo has a firm belief in the potential of the Green Deal to enable large scale retrofit programmes across the UK. The principles of the Green Deal are sound and as a group, Gentoo has a strong desire to enable its customers in Sunderland and others across the UK to benefit.”

–       Rob Lambe, Managing Director, Willmott Dixon Energy Services said:
“In the UK we have become too used to living in cold uncomfortable homes with increasing numbers living in fuel poverty, under Green Deal, our strong tradition of home improvement will be able to readily combine aesthetics and function with increased warmth whilst protecting against rising fuel bills and climate change – a great business opportunity”

–       Adam Hewson, Director, ReEnergise Finance Ltd said:
“We believe The Green Deal represents an important element in the overall drive to reduce carbon emissions and improve the UK’s overall energy efficiency. It is also a natural part of ReEnergise’s business model – combining energy advice, project management and finance.

–       John Egan, CEO, Enact Energy Renewables Limited said:
“Enact is pleased to be a part of the Pioneer Green Deal Provider Group. The Green Deal promises to move the renewable and energy saving market on from the consideration of individual technologies and measures to a genuine ‘whole house’ approach to improving the energy performance of UK homes. The role of a Green Deal Provider very closely matches the role that Enact has played since 1996 under its own name, and in partnership with local councils, and over the last few years on behalf of Marks & Spencer and Tesco.”

–       Phil Gilbert, Head of Energy Innovation, E.ON said:
“Green Deal has the potential to help millions of customers to improve their homes, cut their fuel bills and their carbon emissions, without needing to find the upfront investment.”

23 Responses to “Busting Green Deal Myths”

  1. Hi I think its important to look at some positives here – we have been running an information site about the green deal now for most of this year(www.thegreendealhub.co.uk) and in the last two months we have seen a siginificant increase in interest from Homeowners, Installers.Providers and Assessors most of whom are looking forward to the start of the scheme whilst appreciating at the same time it is not fully fledged yet. Yes there are unknowns, but that always the case with something new it just needs time to settle -we are sure it will be a success. Simon

  2. There were quite a few questions also covered recently by Ed Davey which i thought may be useful to have a link to;
    http://www.decc.gov.uk/en/content/cms/news/gdchat_edd/gdchat_edd.aspx

  3. Chris Kulski says:

    It’s good to see some clarity on the information out there coming from DECC.

    I am in contact with a lot of potential Green Deal businesses who would benefit from some clear answers now on issues such as deemed to comply. I think the way the MCS scheme has played out left some businesses sceptical although this seems to be finding it’s feet again, especially in light of the relationship between Green Deal and FiT’s.

    Further govt. promotion surrounding Green Deal would be good, we need to protect small and sole trader businesses and ensure there are as few barriers to entry as possible whilst delivering a good level of service in order to give the Green Deal the kick start it will need come January.

  4. John Martin says:

    Currently heavily involved in Green Deal and try hard to promote it to installers particularly sole traders and small businesses, however it is clear there is much scepticism in the industry and this seems to be fuelled by the inconsistent and seemingly ever changing message coming from DECC.
    Clarification is needed urgently on many issues not least now the confusion surrounding the ‘deemed to comply’ route for Gas Safe registered and MCS approved businesses. The sheer volume of approvals that need to happen by the launch date is mind boggling and no one can progress as much of the detail required to operate has not been confirmed, or in many cases even considered.
    It would be a shame for the Green Deal to go off half-cocked and fail through being rushed through to meet what was always an unrealistic timeframe.

  5. Ian Wright says:

    Thank you very much for posting this response to the persistent myths the media seems to be spreading about the Green Deal.

    I’m not sure why the media is so opposed to the green deal scheme as it is clearly necessary. As someone who has moved to the UK from Canada, I’m appalled at the standard of insulation in most UK homes. Also, I’m amazed double glazing is not standard on most homes as well.

    Hopefully the media’s attempts to derail the Green Deal don’t work. I hope the government has the resolve to see them through.

  6. James Lloyd says:

    The electricity market reforms and launch of the green deal/ green investment bank is all very welcome, in ensuring that the UK continues to progress the required transition to a low carbon economy.
    James Lloyd
    Climate Change Adviser – Gloucestershire/ Cotswolds

  7. Biff Vernon says:

    Mr Barker, how does your Myth 1 busted square with the DECC website that says: “For domestic properties, we are proposing the charge can either remain the same in subsequent years, increase by 2% each year or that the interest rate can vary in line with an index closely associated with energy prices.”?
    Which is it?

  8. Tony Cranwell says:

    Dear Mr Barker,

    Thank you for taking the time to clarify certain matters within the up and coming Green Deal and I believe John Williamson remarks above are spot on. This is bold and new forward thinking and soon, i for one hope, practice. There will be problems, concerns and without doubt adjustments but you have to start a journey to arrive!.

    The Green Deal is that, a start, just like the Wright Brothers started ther journey back in 1903, did they and others at that time believe other pioneers would be on the Moon 66 years later? UK population in 1903 was around 40m today its around 64m, over the past 400 years (and most in last 100 years i suspect), fossil fuels which took 400 million years to natually develop, have been used. Cost are only going one way, up. We all of course however, wish to maintain our life style and secure our childrens future life style. So, be sceptic by all means but dont ignore the obvious, being, we no longer have the luxury of doing nothing, and we are the ones responsible for the what has been used up in the recent past, (thanks Messrs Wright).

    So dont be swayed Green Deal.

    I am a DEA and although I dont agree with all of Roger Parkers comments above, i do agree that The Big Boys will take over our young self employed industry, but, I still support the principles of The Green Deal.

    I cant get too hung up on the pros and cons of cost savings etc at this stage but do I do know one thing for sure, all those nice people who hold all the big fossil fuel reserves outside of our borders will one day keep it for their own domestic use. One day!

    So Mr Barker bring it on and let the journey and challenge begin.

  9. Paul Mills says:

    I can absolutely see why the uptake among SMEs has been so slow. Many will be looking to their colleagues who committed significant time and financial investment into the foretold coming demand for “Thousands of additional installers required” (sound familiar?) for PV.

    Now, those same individuals have been left high and dry by cuts to the FiT scheme.We were promised the scheme would be seen through (ring any bells?) and that the government was committed to in the long term.

    Once bitten.

  10. Anne Handley says:

    Myth 1. People will not save money. I think it’s true that people will save only a small amount of money until the loan is paid off. The rule is that the repayments will not exceed the savings (no guarantee that they will be substantially less than the savings). My experience as a DEA and working on various energy efficiency projects is that the people most interested in making energy improvements to their homes tend to be over 50, or at least over 40 – perhaps it’s a reflection of home ownership? Are people of this age going to want to take out a deal that will only pay them real savings in 10, 15 or 25 years time? I come into this category and I know I wouldn’t. But if it meant my Council Tax would be substantially lower, then I might, because at least some of the benefit would be immediate.

    • Peter Simmons says:

      ‘Are people of this age going to want to take out a deal that will only pay them real savings in 10, 15 or 25 years time?’

      It’s generally people of this age or older who are most aware of the threat of climate change and want to do something about it. You seem to think everyone fifty and older is as selfish as you and if they don’t see making a profit in their lifetime, they aren’t interested. Actually, most will be leaving their houses to their children who will benefit directly, if benefitting society and homo sapiens generally doesn’t move them. Your attitude that unless it benefits you financially and directly you aren’t interested. Doesn’t strike you as selfish Anne?

  11. Mike Shamash says:

    Its good that you are continuing the discussion on the Green deal in public.

    As an “outsider” it seems that leaks and quotes from “sources close to Number 10″ seem to be driving the Green Deal policies. Indeed there have been reports that DECC are briefing the media saying that the Green Deal for business is being delayed. http://www.businessgreen.com/bg/news/2168953/decc-confirms-green-deal-delay-businesses
    It would be better to publish important updates such as this as news releases (if they are true).

    In terms of point 4 – I think the reporting on Uttlesford DC where they have been implementing “consequential improvements” for 5 years with no problem is a better example of how this could work in principle. Surely this is more constructive than responding to talk about conservatory taxes.

    Please stay strong to (what I think is) the principle aim behind the green deal – lets do everything we can to improve the energy efficiency of our buildings to prevent climate change as well as to help people and business reduce their energy bills.

    Mike Shamash
    http://www.thepeoplespower.co.uk
    Cheaper energy together

  12. [...] Department of Energy and Climate Change Blog [...]

  13. Matthew Paba says:

    I recently heard that a home owner tried to remortgage their home. This would have been fine except the owner had acquired some free solar panels under the ‘rent a roof scheme’. Now because the property has a second charge against it, only a handfull of mortgage companies are interested in the property.
    As I understand it, the green deal is finance secured against the property. what are the council for mortgage providers saying about the take up by their members?
    this causes me concerns as we want to provide structural insulated panels systems and timber frame construction to builders under the gd scheme.
    Matthew Paba
    Greenspan SIPs
    Fischer SIPs UK
    http://Www.fischersips.co.uk
    Info@fischersips.co.uk

  14. Roger Parker says:

    Mr Baker, pls do not disparage the messenger or the sceptic, as you need challenging thought as much as any of your out-of-touch ministerial colleagues.

    It is a truism that a good product or service sells itself. So this then questions the need to flog this Scheme to the public. Solar PV with FiT payments did not need promoting, it promoted itself, until your Government arbitarially crushed an emerging people-investor-driven market. And the underlying reasons for that crushing are the same and highlights the fundamental flaws with this Green Deal Scheme.
    It is fundamentally flawed because:
    1). it is Treasury driven to remove public-funded energy-eficiency measures and pass the cost onto private energy-fuel bill-payers.
    2). It also passes what would be owner/landlord energy-efficiency expenditure from them and onto future bill-payers.
    3). None or minimal Savings will be seen as any reduction in fuel costs gained will be cancelled out by the finance charge for upto 25years!
    4). Where higher household usage and the Golden Rule have permitted significant e-eff’ expenditure,resulting in a significant finance charge levied on the bill, any future occupancy change to a low usage/low bill household will then see what becomes a disproportionately high finance charge on their bill.
    5). Green Deal and the Golden Rule will discriminate against low usage households.
    6). Independent Green Deal Assessors and smaller provider enterprises will be squeezed out by the Big Boys offering free GrnDeal assessments and free this and that if one takes the Big Boys offerings. The announcement of this Big Boys 22Pioneer GD Provider Group is indicatve of just what is to come.
    7). The Government espouses its own Cut Red Tape Challenge but the Green Deal has seen a massive edifice created of Rules and Regulations.Even now Mr Baker is conceding theScheme will need more Rules & Regs to keep it on track.

    In sum, the Government has put all its eggs into this fundamentally flawed basket. I fear this Green Deal will be a monumental flop because basically it expects high-usage Bill-payers to be the ones fighting the War on Carbon. When this flop becomes increasing evident, to save face, the Government will throw £millions of incentives at this Scheme to try and keep it afloat instead of being Statesmanly enough now or then to acknowledge it is fundamentally flawed and scrap it.

    roger.parker6304@yahoo.co.uk
    commercial energy assessor

  15. Thank you very much for all the hard work that’s going into this transformational planning.

    I’m excited about the Green Deal, it strikes me as a clever, forward-thinking solution and intimately connected to improving national life quality and happiness.

    It’s hard to quantify all the ramifications, quite apart from environmental responsibility and savings on bills clearly comfortably warm people are likely to be happier and more resistant to illness.

    I think you’re definitely on the right track!

  16. John Williamson says:

    Thanks for this Gregory. Great clarity.

    Trust and confidence are the vital influencing factor here.

    As a topical example, take a consumer like me living off the gas grid, with immediate need to replace broken oil heating system. There is an easy choice and a difficult choice.

    The easy choice is to replace an dead oil boiler with a new oil boiler that will last for another 20 years. The outlay is less than a third of a bio-mass boiler. It’s safe on servicing, and easy to fuel up. The captial outlay and risks are low and known. It’s also 100% guaranteed to create plenty of polution for a good 20 years as who’d be daft enough to replace a new working boiler again?

    The difficult choice is to have home alterations and a bio-mass boiler, investing 30k upwards. One payment of £950 is currently offered in support. Yet this is nil polution for 20 years and a pioneer advocate. Those willing to make the difficult choice need to be able to trust there’ll be support in 2013 and have the confidence it will be reasonable against the cost and risk.

    Consultations, papers, and words are all fine. But to engage pioneers to spend and support commitments actions are needed (even if they are ‘non-precendent on long range policy’). This doesn’t need to be perfect from day one, and won’t be. How much would it cost to support early pioneers for 12 months from now? In proportional terms, what % of the annual Govt revenue raised from poluting energy sources would this be?

    With 2020 getting nearer by the day (no-one can argue that one!), winning stories on social networks are a brilliant source for more radical change in the public commitment to energy saving. Delays and worries about the Green Deal for the domestic sector embed further the culture of ‘why change’ – and the UK has that in bucket-loads already.

    There are two choices. The easy one – delay decisions (because then we may not have to take them). The difficult one – take decisions, but change them with learning and experience.

    Pioneers take difficult choices. Pioneers are leaders.

  17. Where can the customer find an approved list of Green Deal tested products or Green Deal standard products so they can make informed decisions and or check work being completed is using such items.

    • Green Deal Team says:

      Hi Richard,
      Thanks for your question.
      We will have a single list of qualifying improvements for domestic and non-domestic buildings covering a range of measures across the insulation, heating, glazing, lighting and Microgeneration industries.  Green Deal products will need to fall within a category of the qualifying Green Deal measures that have been recommended during an assessment for the building in question and will need to comply with the requirements of the Green Deal Code of Practice.

    • Hi Richard,

      You’ve asked a very valid question. If you visit http://www.thegreendealhub.co.uk you’ll find a load of info. on The Green Deal, services, home improvements, training etc. Hope this helps – it’s good to get a view of it all there is to know in one place.

    • Stephen Shaw says:

      Hi Richard,

      Green Deal Central seem to have some good information on the matter. They have a PDF which provides a end to end customer journey which I found really useful. http://www.greendealcentral.com/greendeal.php and you could use it as a checklist. It’s just below the info graphic image.

  18. Eric Monson says:

    I live and work in west of Scotland where, in my experience, there appears to be only a very limited public awareness of Green Deal, and really only an emerging interest within the SME sector (which gives cause for concern given, a) the knowledge, up-skilling and accreditation requirements to ensure adequate industry capacity to service GD demand, and b) the local sustainable supply chain opportunities that may be lost should that fail to happen timeously).

    While I realise that the Scottish government will be responsible for promoting GD up here – and one would imagine this should be high on their list of priorities given the key policy drivers and energy / renewables commitments contained within the Climate Change (Scotland) Act – is it possible to say if the UK government intends spearheading a high profile national campaign to raise public awareness throughout the UK? if so, when do you anticipate this would begin to roll out?

    The recent announcement by the UK government regarding investment in 1000 GD apprenticeships in England is encouraging – sadly, the Scottish government remains silent on this matter to date.

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