Green Deal slammed by MPs as “disappointing failure”

Government's flagship Green Deal finance scheme, which was intended to reduce energy bills and reduce carbon emissions, has been branded a “disappointing failure” after its first eighteen months of operation.

Antony Oliver
15 September 2014

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A report published by the influential Energy and Climate Change Committee of MPs said the scheme to help householders finance insulation and other energy efficiency measures had simply caused frustration and confusion in the market.  

“Rather than facilitating access to energy efficiency measures and creating momentum in the market, the Green Deal has caused frustration and confusion for both consumers and businesses in the supply chain,” says the report.

“Unless the package is made more attractive to a wider group of consumers, Green Deal finance is likely to remain unappealing to many” Energy and Climate Change Committee

“Only 4,000 Green Deal plans have so far been initiated. As a result, carbon savings through Green Deal finance have been negligible.”

The report says that a combination of financial, communication and behavioural barriers had prevented customers taking up the scheme. It added that the costs of the scheme had also contributed to its failure with cheaper loans often available to finance the improvement elsewhere.

“Frequent changes to both the Green Deal and the Energy Company Obligation (ECO) have created uncertainty and insecurity and have alienated many customers,” said the report. 

“Failure to plan an appropriate communication strategy has meant that DECC has been unable to drum up support even amongst those households that could benefit most from a Green Deal loan,” it added. 

The MP's concluded that while the scheme does avoid the need for upfront costs to install energy saving measures they said that in reality it would only appeal to a small number of households due to the complexity of the scheme. 

The committee recommended that the scheme be amended to include alternative financial incentives alongside the  Green Deal to encourage energy efficiency across wider sections of society. 

It also said that stamp duty discounts or variable council tax rates might also help to encourage greater uptake of energy efficiency measures

“Unless the package is made more attractive to a wider group of consumers, Green Deal finance is likely to remain unappealing to many,” the committee concluded.

For details of the report visit the Energy and Climate Change Committee website here.