The Green Deal – an Overview
Green Deal is one of the coalition’s flagship policies. Green Deal introduces a new finance mechanism to enable householders to invest more affordably in individual or packages of energy efficiency measures. Mechanisms which enable the market to provide Green Deal offerings need to be in place by autumn 2012 – crucially advisors trained and ready to provide appropriate advice; installation standards set and capable of being enforced; mechanisms of guarantee and customer redress in place; potential providers of Green Deal informed and ready to enter the new market; the necessary supply chain capacity (work force and investment in new product lines and services) geared appropriately for consumer take-up; and necessary arrangements in place to manage the transition for existing business models (such as those built today around CERT, CESP and Warm Front schemes – and devolved equivalents) without loss of jobs and skills later needed for Green Deal. All these elements of Green Deal carry attendant risks and the EEPH is uniquely placed to work with government to mitigate these.
The centrality of the Green Deal policy impacts on related policy areas which are, to a greater or lesser degree, outside of the direct control of the Green Deal team, such as: the Energy Company Obligation (ECO); fuel poverty; building regulations; product standards; local authority powers; and microgeneration. EEPH is able to help the Green Deal team through its ongoing relationships and engagement with officials across government departments and divisions.
DECC established in the second half 2010/11 four Green Deal stakeholder forums by ministerial appointment and nominated EEPH to provide the secretariat. These forums demonstrate that Government is engaging with stakeholders in the development of Green Deal. Each forum has met regularly since, and a number of taskgroups has formed around specific topics, enabling a wider network of experts to contribute and participate. The forums and taskgroups are essential to Government gathering views on policy design and engagement, and industry to hear about and comment on the latest developments first hand.
The aim of the Green Deal is to encourage home energy efficiency improvements, to be paid for by savings from energy bills – meeting the ‘golden rule’ where savings are greater than the repayments. Replacement of the current CERT and CESP obligations on energy suppliers to reduce carbon dioxide emissions from homes with the new energy company obligation (ECO) will underpin the Green Deal. The current energy supplier obligation ends on 31st December 2012. ECO is expected to focus the obligation on those properties and households which could not make energy savings without extra financial support, such as those with hard-to-treat homes and in fuel poverty. This sector accounts for about a quarter of carbon emissions.
The Energy Act provides the primary powers for Green Deal scheme to be established. DECC has consulted on the scheme, including its draft secondary legislation. The consultation closed on 18 January 2012. The secondary legislation specifies how the Green Deal will function, including qualifying measures, standards of advice and installation, and mechanisms for quality assurance and accreditation. DECC intends Green Deal structures to be in place by autumn 2012. The decisions made on the detail of the secondary legislation will crucially determine whether the policy succeeds – consumers taking up Green Deal offers, providers of Green Deal finance entering this new market, and suppliers of products and services being capable of providing the Green Deal measures and to the requisite quality standards.
New services for the provision of Green Deal advice and installations need to be market ready by autumn 2012. An independent energy survey of the property is necessary, giving advice on Green Deal options. A mechanism for assuring the quality and independence of the survey needs to be defined, standards set, training provided and sufficient advisors/assessors made available by the market for autumn 2012. Only accredited measures will be installed by appropriately qualified installers. A certification scheme will set technical standards for installation and competence levels for installers, as well as customer care and warranty requirements. Again, this scheme needs to be market ready by autumn 2012. Existing certification schemes for the range of qualifying measures would need to be adapted.
As the central policy for energy efficiency, Green Deal has implications for other related policies, some of which are the responsibility of other departments: BIS for the construction industry and skills; DCLG for EPCs, planning, housing, building regulations and compliance, and local authorities; and Defra for product performance standards and compliance. DECC also has responsibility for carbon budgets, fuel poverty, and renewables (including microgeneration). The successful alignment of these interdependent policies is crucial for the success of Green Deal fulfilling its policy objectives. DECC is reviewing its fuel poverty strategy, a microgeneration strategy is being finalised, EPCs are being reviewed, building regulations are being revised for 2013, social housing financing is under review and the role of local authorities is being considered.
