The Green Deal – Is It Really Green For Go?

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The Green Deal is due to be launched in October 2012 and, therefore, plans for the scheme are in their final stages. The first batch of Green Deal providers, who will arrange the finances for, and installation of, the energy saving devices, have been published. Qualifying energy saving devices have also been made public. However, there are still some key details to be published such as interest rates for the loan repayments. In this article we will ask whether the UK is really ready for the Green Deal.

Financing the Green Deal

The Green Deal is being funded by the UK government and more specifically the Department of Energy and Climate Change (DECC). The overall cost is expected to run into the billions as the Green Deal is due to run for 25 years. In March 2012, the DECC added a further £3.5 million into the pot in order to train Green Deal Assessor and Provider staff. A further £10 million was also made available at the same time which was invested in energy savings devices to be used as part of The Green Deal. There is a concern among many that the Green Deal will prove too expensive in the long run, especially if large numbers take out the loans as soon as the scheme goes live in October 2012.

Industry Concerns

Green Deal Providers hope that the scheme will generate jobs and income for their industry. An estimated 65,000 jobs could be created through the scheme. However, some are concerned that the Green Deal is too ambitious. Critics cite the government’s other environmentalist scheme, The Feed-In Tariff initiative, which was force to cut its tariffs by over half barely a year after its launch in 2010. This led to widespread disharmony, cuts and job losses in the UK’s energy industry. The fear is that the same will happen to the Green Deal.

Some critics argue that the Green Deal suits only the middle classes. They argue the less well off people cannot afford the repayments. Controversially, loft insulations, a relatively cheap improvement, are not included as part of the deal but the more expensive solid wall insulation is. The government argued that loft insulation is widespread so more people would take up the loans for the wall insulation. However, critics counter this argument, stating that selecting loft insulation would have encouraged less well off people to apply as the loan repayment would be paid off more quickly.

Public Concerns

The main concerns surrounding the Green Deal center on the uptake of the deal. Many are worried about public apathy towards environmentalist issues, especially in today’s tough economic times. There is a fear that people would be unwilling to take out loans simply to improve the energy efficiency of their home. Public trust of energy companies is also at an all time low, so the idea of repaying the loan through such companies may not appeal to many. Critics of the Green Deal argue that the Golden Rule which states repayment cannot exceed expected savings of the devices is unrealistic and will not hold true for some energy saving devices. These concerns raise serious doubts about whether enough people will take up the deal to make it successful.

The structure for the Green Deal is in place and there are just a few creases that need to be ironed out before its launch in October 2012. The main concern is that the public will not embrace the scheme. Without a large uptake, the expected jobs and income from the Green Deal will simply not materialize.

Article by Poppy Image.

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About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

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