1 Nov 2012

Green Deal: Reading the Runes

I spent Tuesday at the NEC in Birmingham, visiting an exhibition entitled RetroExpo. Running inside it was a Green Deal Summit which featured a number of Green Deal(GD) notables working through their PowerPoints. That's not to be disparaging about them, there were lots of very distinguished speakers, and the exhibition is to be congratulated for assembling them all together in one place. Surely, now was the chance to learn something significant about GD?

Well maybe, maybe not. I've yet to write anything enthusiastic about GD and my feelings haven't changed much as a result of Tuesday's deliberations. For a start, it's damned complicated, so complicated that presenters kept flashing up organisation charts only to quickly withdraw them because they were too difficult to explain. Not encouraging.

It seems to get a GD going, you have to start with an assessor coming to visit your property and carrying out a survey. How much will this cost? Various answers from £130 down to nothing. If it's nothing, that tends to suggest that the assessor will be a tied agent. Would you trust such a person to carry out an independent survey? I wouldn't.

Anyway, stage two is to put the survey results into effect. There is much talk of the Golden Rule which means that the works to be undertaken have to payback in 10 years. Or is it 25? Or something else? I'm afraid I still don't know. And do you have to take the GD Finance Deal (at somewhere between 6% and 8% APR — again no one can say for sure)? What if you decide to arrange your own finance, or just pay for it from savings, is it still a green deal, and will you get the guarantee? No one could answer these either.

How much will it all cost? It was here that I did learn something new although it still didn't fill me with confidence. The government has announced some kick start money to get the GD off the ground. I though this was just window dressing, but it turns out this may just be the start and that the energy companies will soon start to subsidise GD works in the way they have been doing cavity wall and loft insulation. They are required by law to undertake carbon saving measures, expressed in tonnes of carbon per annum (it's different for each company, depending on their size). Some of this carbon-saving cash is probably going to filter through to GD providers and it may end up subsidising works such as external wall insulation (EWI), which on their own are very unlikely to ever meet the Golden Rule.

So, for instance, if EWI is estimated to cost £10,000, and the expected saving is, say, £300/annum, then the householder might only have to pay £3,000 (which gets roughly a 10 year payback), with the other £7,000 being paid for via an energy company subsidy - or ECO as it's getting called. Or at least I think that's what ECO is — once again the slippery nature of the GD makes it hard to know what is what. Was ECO a fund or a mechanism? Or both?

If I am right, then you really need someone else acting as a broker, who could fit your job together with the appropriate energy company, the one who is offering the best subsidy for this kind of work.

At least, I think that may be how it will work. I could also be completely wrong. But then, if I am, I will not be alone.

I came away surprised by:
a) how much I already knew about the Green Deal — I kept thinking "I know that" — but
b) how much I didn't understand — like how is it all going to work.

I wish it well, but I don't think the runes are looking too helpful.

3 comments:

  1. Unfortunately I couldn't make to Retroexpo I would have liked to heard the presentations. I am currently trying to write a simple sheet on how the Green Deal will work for our local Transition Group. Having trawled through the DECC web site I really don't feel I could answer anything but the most basic questions about how the system works.
    My major concern is the quality of the advice given and the work done. If you already are a home energy assessor then it is only a 3 day course to cover all insulation methods, renewables etc as well understanding how the system works. And who is writing the standards. This was brought home to me the other day when someone who has been involved in building physics for many years said something like "we are still not really sure what is happening inside a solid wall building in all situations" So what will the effect be when a bunch of contractors who used to do Loft insulation start sticking insulation on walls either inside or out.
    How many of us would be happy about saying to a local person who wants to upgrade their home "just contact your local green deal provider and they will sort it all out for you". Until we that level of confidence in the system it won't work.
    Rant over, thanks Mark for the platform.

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  2. I went to a GD seminar Today. I half expected to come away conceding that the GD is a good thing, and that I should stop being skeptical. Well,.. my list of questions increased as the seminar went on. I'm as perplexed as ever. its very complicated!

    I did learn that if the golden rule doesn't work, then the owner can add a lump sum... the plot thickens.

    I guess the general standard of energy-use out there is pretty awful, and maybe the GD is one way to make a notable improvement of the situation, but can't help agreeing with your observations Mark and Geoff.

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  3. If anyone wants a reasonably concise explanation of how the GD and ECO will work have a look at my website www.davegreenenergy.co.uk, there's a handout available on the Green Deal page. if you still have questions then you can e-mail me. (I've been developing and delivering GD adviser training as part of the Energy Advice Training Consortium.

    But I'll have a go at a few of Marks' points.
    1, The GD adviser is meant to work impartially and this will be audited. Even if B.Gas or whoever supply a free survey the report will belong to the client who will be free to take it to any provider.
    2, The job of a GD adviser is much broader than just the GD, they will also advise on low cost/no cost measures, ECO, FiTs etc. The client can either get full GD funding for a package or supplement it with ECO or their own finance etc. They could ignore the GD altogether but then wouldn't have the protection of the GD quality mark.
    3, The golden rule for domestic clients is based on standard occupancy, if 2 people live in identical houses they can borrow the same amount for the same jobs even if one is a high energy user and the other a low energy user. The low energy user will however have to sign that they understand they might not achieve savings overall.
    4, a GD plan can last up to 25 years (or 15 for a boiler), if the repayments work with a shorter plan then the client can decide whether to have a shorter plan or not.
    5, ECO is a grant scheme in 3 parts, some will go on Affordable warmth, some for part funding solid wall insulation (to enable the remainder to meet the golden rule), part to areas of multiple deprivation.

    The GD has been described as the largest whole house retrofit programme in history. It's by no means perfect and it is cumbersome but there will be trained energy advisers going into people's houses to talk about energy efficiency and ECO should provide the sort of impetus to swi that the FiTs gave to PV..

    yours, Dave Green

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