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Government scraps Green Deal scheme funding

The government will scrap funding for its unsuccessful flagship household energy Green Deal scheme as a result of low take-up, according to the Department of Energy and Climate Change (DECC).

Energy secretary Amber Rudd MP announced that the Green Deal home improvement fund, which works as a cash back scheme to install efficiency measures in houses such as double-glazing and insulation, will also lose funding.

She said: “We are on the side of hardworking families and businesses, which is why we cannot continue to fund the Green Deal. It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.”

The Green Deal was launched in 2013 and offers long-term loans to UK households with no upfront cost to make homes more energy efficient through heating, boiler, microgeneration and glazing improvements. Loans, which would be paid back through energy bills, were said to have high rates.

By the end of June the government had calculated that only 10,000 properties had taken part in the Green Deal finance scheme since its launch, with an additional 5,600 plans in progress.

Despite its termination the decision will have no impact on existing plans or improvement fund applications and vouchers. Current policies including the Energy Company Obligation (ECO) scheme will also continue to provide support throughout the year to low-income households.

Which? Executive director, Richard Lloyd, welcomed the move and said: “The government can’t keep throwing money at a scheme that has spectacularly failed to take off.

“Ministers should now work with the consumers to put together a realistic new approach that is genuinely good value and helps people to save money by saving energy.”

The government has promised to do exactly that as it announced its search for a new ‘value-for-money’ approach that also can also support the objective of insulating a million more homes over the next five years, as well as tackle fuel poverty.

Peter Bonfield, an engineer with experience in household energy and building design, has been commissioned for an independent review to look at ‘standards, consumer protection and enforcement of energy efficiency schemes’ to make sure that the system “properly supports and protects consumers”.

The news comes after a series of governmental moves to end green energy policies such as onshore wind farm subsidies, as well as cuts announced this week to solar subsidies.

Julie Hirigoyen, chief executive of the UK Green Building Council, said: “With each passing day, this government puts an end to another green policy. Government’s strategy on dealing with high energy bills through home energy-efficient is now dead in the water.

“While the Green Deal was by no means perfect, the principle of enabling households to install energy-saving measures without paying upfront costs was sound. The irony is that the scheme was finally becoming established and the number of plans was growing. This is yet another announcement with no forewarning that will leave the energy efficiency industry battered and bruised.”

Other experts criticised the scheme’s demise, with Greenpeace UK’s head of energy Daisy Sands calling it a “false economy” and saying a new “ambitious programme for warmer homes is sorely needed”.

Ed Matthew, of the Energy Bill Revolution, said that the UK has “among the worst-insulated homes in western Europe” and claimed the government needs to make home energy efficiency an “infrastructure priority”.