Incentives question mark over Green Deal

A lack of incentives for consumers to take up the government’s Green Deal home renovation scheme has left question marks over its viability.

The Green Deal, set to come into effect next autumn, aims to improve the energy efficiency of the existing housing stock in the UK by kick-starting £14bn of private sector investment.

But the government’s consultation on the detailed plans, launched on Wednesday, gave little indication of how consumers would be persuaded to take up the scheme.

The consultation document merely said: “The Green Deal is a commercial offering and therefore it is likely that Green Deal providers will offer all kinds of incentives as part of the finance package.”

Ingrid Holmes, programme leader on green finance at think tank E3G, said: “The complexity of the Green Deal has been vastly under-estimated and a series of incentives will be key. Without that detail it leaves businesses without the certainty to go forward with this as something they can put faith in.”

Richard Giffiths, policy and campaigns consultant at the UK Green Building Council, said: “It would have been nice to have seen incentives and the consultation all together, but now we will have to wait for the Chancellor’s autumn statement.”

Griffiths said this was concerning given that consultees only have eight weeks to respond, in a period which includes Christmas and New Year.

The government did, however, propose to cap the amount of cash consumers can be offered to take up the green deal.

It said providers would only be able to offer a maximum of £150 cash back to consumers or 5% of the installation costs, whichever is smaller. It argued this was to reduce the opportunities for fraud and subsequent damage to the scheme’s reputation.

Griffiths said this cash back would not make or break the scheme and what was needed was stamp duty or VAT exemptions to make consumers take-up the Green Deal offer.