Besides being a very passive aggresive slogan, the title of this blog post sums up quite nicely what I'm blogging about today. A few months ago, I did a seminar for the Institute for Building & Urban Design at Heriot-Watt University, on the Green Deal. Apparently at least one person was paying attention, as he recently came back to me having found out my name rather than referring to me as "Green Deal lady". (Which I quite like, but that's besides the point). He asked me a number of questions, and has said I can share them - and my responses - on here, for your delight and delectation. A small disclaimer - I've not been as up to date with all things policy for sometime, see my previous post about time management and writing up a PhD! If I'm wrong about something, please correct me!
The process according to DECC (above)...or will it end up being more like the process below...
Q. The govt is providing money for local authorities to promote the Green Deal, how successful has this been so far?
A. I think attributing a level of success to the scheme yet in any aspect is too hasty. With a scheme like this that will take time to get to speed, and iron out the problems, at least a year should go by before reporting its success. When the tabloids were reporting it was a failure after a few weeks, that was just irresponsible journalism and likely to further damage the scheme, in my personal opinion!
My focus has been on Scotland, and I’m not aware of the impact south of the border, but up here let me turn this back on you – have you had anything through from the council on the Green Deal (GD)? Me neither! I’ve had plenty from energy companies and solar technology firms though. The difficulty has been in getting people aware of the GD, then getting them to go through with the deal. The first part is just a PR game, the second is more fraught with difficulties as outlined in my original seminar, and following presentations at the WSED conference, Austria, March 2013 and for the ECEEE summer study here).
Do you know of other bodies getting involved (NEA etc)? What approach are they taking? e.g. street by street?
I’m only aware of Local Authorities doing it street by street or area based, with the £20m pot that DECC have provided. Bodies like the NEA, NHBC etc are mostly providing commentary, case studies and training. I’m not aware of any that are acting as a provider. Organisations like the Energy Savings Trust will do anything on a house-by-house basis. Birmingham Energy Savers is a group set up by the Local Authority to act as a single point of information. They offer free GD assessments, all part of Birmingham’s Green Commission. Look it up, it’s a pretty good example of Best Practice.
Labour have said they will scrap the Green Deal if they win in 2015 - will this have an effect?
I think this could reduce the uptake of deals, but not necessarily the assessments. People will be less likely to sign up with a dark cloud hanging over whether it will remain. Labour have not (as far as I’m aware) stated what they would do with the people who have already signed up. The infrastructure has been put in place, and it will cost a HUGE amount of taxpayer money to close it down. Considering the GD is very nearly the same policy that they were proposing pre-Coalition, this promise to scrap it suggests to me that this can be put under the ‘said to get votes’ column, so its hard to know if they’d actually go through with it.
Why do you think it's had such low take up?
Two-fold.
Firstly, I think the model used (SAP) is not ideal and is therefore not great at anticipating the potential savings or costs. (See my eceee paper for this, available above)
Secondly, the interest rate is far too high. This makes the savings calculated in SAP even smaller, and therefore the measure is less likely to meet the Golden Rule. Many banks (and Local Authorities I think) are introducing their own green loan schemes, to enable you to get a low interest loan to essentially do the job of the Green Deal. An interest rate of for example, 3% from a high street bank is far more appealing than a 9% interest rate through your Green Deal provider. This is a great thing, as people are able to get low interest loans (that if paid over a long-enough time period could be paid back through energy savings), and therefore improve the energy efficiency of their homes. However, this does not help the Government statistics! Greg Barker has admitted himself that they have no way of knowing what measures are being installed from private deals, so the first they’ll know of any improvement in the stock is if they analyse their own energy data. The 71,000 GD assessments since January is pretty good, as that is people actively seeking an assessment, not people who just buy or rent a property and get an EPC. However, 677 people going on to make actual GD plans is an awful return, but we have no data on how many of the remaining 70,000 have gone to private finance deals to do the installations.
Is the whole thing simply rubbish or do you think they'll pull it round?
I think they can pull it round. They are doing a lot of analysis on whether/how its working (including a project that our research group will be working on). This will point out the difficulties of the interest rate, and for me that’s what’s going to kill it. If they can lower the interest rate, more people will be likely to do it. It also takes time to understand the true market impact of selling a house with a GD loan attached to it. Surveys before the start of the deal suggested it would put people off, or buyers would make the seller lower the price to essentially cover the cost of the loan repayments. We have to wait and see if this happens.
Ultimately, it is kickstarting people looking at their energy use, and wanting to lower their bills. We’re seeing a lot more coming out of the Big Six energy companies in terms of help and advice and deals for customers, and this will also help. I think ECO will do more for reducing energy demand and costs than the Green Deal, but if the interest rate comes down, I think it could take off.
A. I think attributing a level of success to the scheme yet in any aspect is too hasty. With a scheme like this that will take time to get to speed, and iron out the problems, at least a year should go by before reporting its success. When the tabloids were reporting it was a failure after a few weeks, that was just irresponsible journalism and likely to further damage the scheme, in my personal opinion!
My focus has been on Scotland, and I’m not aware of the impact south of the border, but up here let me turn this back on you – have you had anything through from the council on the Green Deal (GD)? Me neither! I’ve had plenty from energy companies and solar technology firms though. The difficulty has been in getting people aware of the GD, then getting them to go through with the deal. The first part is just a PR game, the second is more fraught with difficulties as outlined in my original seminar, and following presentations at the WSED conference, Austria, March 2013 and for the ECEEE summer study here).
Do you know of other bodies getting involved (NEA etc)? What approach are they taking? e.g. street by street?
I’m only aware of Local Authorities doing it street by street or area based, with the £20m pot that DECC have provided. Bodies like the NEA, NHBC etc are mostly providing commentary, case studies and training. I’m not aware of any that are acting as a provider. Organisations like the Energy Savings Trust will do anything on a house-by-house basis. Birmingham Energy Savers is a group set up by the Local Authority to act as a single point of information. They offer free GD assessments, all part of Birmingham’s Green Commission. Look it up, it’s a pretty good example of Best Practice.
Labour have said they will scrap the Green Deal if they win in 2015 - will this have an effect?
I think this could reduce the uptake of deals, but not necessarily the assessments. People will be less likely to sign up with a dark cloud hanging over whether it will remain. Labour have not (as far as I’m aware) stated what they would do with the people who have already signed up. The infrastructure has been put in place, and it will cost a HUGE amount of taxpayer money to close it down. Considering the GD is very nearly the same policy that they were proposing pre-Coalition, this promise to scrap it suggests to me that this can be put under the ‘said to get votes’ column, so its hard to know if they’d actually go through with it.
Why do you think it's had such low take up?
Two-fold.
Firstly, I think the model used (SAP) is not ideal and is therefore not great at anticipating the potential savings or costs. (See my eceee paper for this, available above)
Secondly, the interest rate is far too high. This makes the savings calculated in SAP even smaller, and therefore the measure is less likely to meet the Golden Rule. Many banks (and Local Authorities I think) are introducing their own green loan schemes, to enable you to get a low interest loan to essentially do the job of the Green Deal. An interest rate of for example, 3% from a high street bank is far more appealing than a 9% interest rate through your Green Deal provider. This is a great thing, as people are able to get low interest loans (that if paid over a long-enough time period could be paid back through energy savings), and therefore improve the energy efficiency of their homes. However, this does not help the Government statistics! Greg Barker has admitted himself that they have no way of knowing what measures are being installed from private deals, so the first they’ll know of any improvement in the stock is if they analyse their own energy data. The 71,000 GD assessments since January is pretty good, as that is people actively seeking an assessment, not people who just buy or rent a property and get an EPC. However, 677 people going on to make actual GD plans is an awful return, but we have no data on how many of the remaining 70,000 have gone to private finance deals to do the installations.
Is the whole thing simply rubbish or do you think they'll pull it round?
I think they can pull it round. They are doing a lot of analysis on whether/how its working (including a project that our research group will be working on). This will point out the difficulties of the interest rate, and for me that’s what’s going to kill it. If they can lower the interest rate, more people will be likely to do it. It also takes time to understand the true market impact of selling a house with a GD loan attached to it. Surveys before the start of the deal suggested it would put people off, or buyers would make the seller lower the price to essentially cover the cost of the loan repayments. We have to wait and see if this happens.
Ultimately, it is kickstarting people looking at their energy use, and wanting to lower their bills. We’re seeing a lot more coming out of the Big Six energy companies in terms of help and advice and deals for customers, and this will also help. I think ECO will do more for reducing energy demand and costs than the Green Deal, but if the interest rate comes down, I think it could take off.