Could the Green Deal be the real deal?

In the first guest column, Colin Timmins, of TACMA questions whether the new Government will live up to its “green” aspirations. If the proposed “Green Deal “comes into force the opportunities for installers could be significant.

TACMA (The Association of Controls Manufacturers) is the well established association for UK manufacturers and suppliers of electrical and electronic controls used in heating and hot water systems, and wider applications to control the internal environment of buildings. The association is very active in policy making, standards and directives in the UK and Europe.

COULD THE GREEN DEAL BE THE REAL DEAL?

Within the first days of taking office in 2010, David Cameron pledged to make the new coalition the greenest Government ever. Those of us who have been involved in energy conservation for some years, know that this is an area where it is easy to have good intentions but far more difficult to achieve real results.

Nowhere is this more true than in trying to encourage the millions of householders in existing homes to significantly reduce their energy use – something that is vital if the UK is going to get anywhere near its overall carbon reduction targets.

In December the new Government finalised the details of their Green Deal - a much trumpeted policy approach that will be the main focus to persuade people to take up energy saving measures.

The Green Deal concept is fairly simple; householders will be able to get selected energy saving measures installed with no up front cost. This will then be repaid through their energy bill with the cost of the repayment covered by the energy savings. The repayments are expected to last up to 25 years and transferred onto the energy bill of the new occupant if the house is sold.

Given that this scheme is targeting millions of householders it could be extremely beneficial for installers of heating controls, a technology which should be an essential part of any home energy saving strategy. So industry should rightly support this scheme.

My concern though is that if this scheme is pitched as a ‘green makeover’ it will be difficult to persuade millions of householders to take on the responsibility of a long term financial commitment for something that is still a niche interest. The question is how this scheme could be designed so that it becomes highly attractive for the majority of householders, and provides a recession defying benefit to installers.

"The Green Deal concept is fairly simple; householders will be able to get selected energy saving measures installed with no up front cost. This will then be repaid through their energy bill with the cost of the repayment covered by the energy savings."

To do this, I believe that there are three areas that the coalition Government needs to get right:

1. Focus on the right technologies. On average, 84% of energy in homes is used for heating and hot water so the biggest improvements for most people are going to come through insulation, better controls and a more efficient boiler. The Green Deal should focus on just these measures, all of which are proven and have a well established supply chain.


2. Provide a compelling offer to householders. The offer of a ‘green makeover’ is of limited interest to most people, but being warm is a major priority for everyone. Also, many people worry about the cost of replacing their heating system when it eventually breaks down.
   
   The Green Deal could offer a new, efficient heating system (with insulation and good controls included as required) with the repayments not only covering this system, but future replacements as well. In one step, a major financial burden for householders has been taken away – a benefit that would be easy to accept as an extra payment on your energy bill.


3. Get the delivery right. It is often forgotten that the major source of advice and guidance to householders on their heating system comes from the heating installer. Installers providing a quote or carrying out a service should be the ones to establish the property’s requirements for the Green Deal offer and should be able to provide details of how the finance mechanism will work.
   
   This would provide confidence in the scheme for householders, ensure that a robust technical assessment is carried out, and also motivate installers to promote the scheme as it will help customers access the funds for work to be carried out.

Such an offer would focus on peace of mind as much as energy efficiency but that doesn’t really matter if millions of households take it up and the outcome is a far more efficient housing stock.

Once householders have an insulated home, an efficient boiler and effective controls they can be educated on using those controls to save more energy – even saving more that the extra the pay on their energy bills for their new heating system. This puts energy saving in its proper place for most people – a no cost way to make tangible money savings.

I think that there is great potential from the Green Deal, both to save energy and to stimulate extra work for industry. But it does need to offer something that people already need and place value in if it’s going to be, in energy policy terms, the ‘real deal.’

What do you think of the Green Deal and Colin Timmins’ well argued hopes and fears? Send us your thoughts and comments.