MPs urge Govt to re-boot Green Deal home energy efficiency scheme

Green DealNew incentives to encourage energy efficiency should be considered by the Government because its ‘Green Deal’ pay-as-you-save scheme has failed to drive the scale of energy saving home improvements needed to cut carbon emissions and insulate consumers from high energy bills.

 MPs on the Westminster parliament committee are supportive of the principle of the Green Deal but believe the government needs to set out a clear strategy to revive the scheme and make it both clearer and more appealing to UK households.

Alternative financial incentives, and other measures and regulations, should now be considered in tandem with the Green Deal to encourage energy efficiency across wider sections of society.

 Tim Yeo, MP, Chair of the Westminster Energy and Climate Change Select Committee, said: “Stamp duty discounts and variable council tax rates could be used to broaden the appeal of energy efficiency improvements and make them even more of a money saver for households. Extra incentives certainly need to be considered, as the Government’s flagship pay-as-you-save finance scheme, the Green Deal, has only delivered a fraction of the expected benefits so far.”

“A combination of financial, communication and behavioural barriers has meant that the Green Deal has been slow to attract customers.

“Green Deal finance is, in principle, an attractive proposition, but the high interest rates attached to the loan, were putting off potential customers as many households are able to find cheaper finance mechanisms elsewhere.

 “DECC’s communication strategy has been confusing and has often conflated different energy efficiency schemes. As a result, the Government has struggled to drum up support even amongst those households that could benefit most from a Green Deal loan.

“The interest rates for the Green Deal are simply not financially attractive enough for many households to go to the hassle of setting one up.

“By its nature this kind of scheme also only appeals to a certain section of the population who are in a position to take out loans on home improvements. Broader incentives could encourage lots more households to take simpler and cheaper steps to improve the energy efficiency of their properties and save money on their energy bills.

“Insulating our homes to make them warmer will bring benefits both for homeowners and for society, as we enhance our energy security and lower our carbon emissions.”

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed