The Green Deal faces another setback – but with pragmatism and ambition the scheme can still be a groundbreaking success

Richard Griffiths

On Monday we saw yet another public relations setback for the Green Deal and Energy Company Obligation (ECO), with claims from the insulation industry that – far from creating thousands of new jobs – the schemes, and the delays to their full implementation, could lead to something of a collapse.

While there may be room for debate on the specifics of the number of jobs at stake, it is fair to say there is real cause for alarm.

But, let’s be clear, this doesn’t come as a surprise. The industry, NGOs, the Committee on Climate Change, even the Office of Fair Trading, have all been warning the Department of Energy and Climate Change (DECC) about this issue for almost as long as the schemes have been under development.

Over recent years, for all their ups and downs, the various supplier obligations have helped to create a vibrant retrofit market, centred on the loft and cavity insulation. The government has been at pains to point out that these are measures that pay for themselves, and that people should be taking them up without the need for on-going subsidy and support. Instead, they say, policy should focus on more costly interventions such as solid wall insulation.

But the truth is that long and bitter experience demonstrates that households are far from economically rational, and don’t tend to prioritise insulation, even in the face of rapidly increasing energy prices. What’s more, even if you agree that the change in policy focus is necessary and justified, abrupt changes to policy, with minimal transitional periods (remember the solar feed-in-tariff debacle?), are always likely to damage businesses no matter how laudable the long-term goals.

Something needs to be done to make sure that the “soft start” doesn’t kill off enthusiasm for the Green Deal before it even begins

The Green Deal is groundbreaking. For all its issues (and there are a fair few), it will create a framework that stands to support retrofit in the UK for many years to come, driving much needed job creation and investment. But the government has, unfortunately, gotten itself too caught up in its own hype and rhetoric, and has failed to see that putting in place these frameworks is necessary but not sufficient on its own. There needs to be a more carefully managed transition to ECO from Carbon Emission Reduction Target (CERT) and Community Energy Savings Programme (CESP) that maintains that momentum we have built up to this point.

Something needs to be done to make sure that the “soft start” doesn’t kill off enthusiasm for the Green Deal before it even begins. And, longer-term, the scheme needs to be supported by incentives - both sticks and carrots - that pro-actively drive people to make their homes more energy efficient.

Without these extra steps, there is a significant danger that we’ll miss the opportunity to protect consumers from rising energy bills, cost-effectively tackle carbon emissions and avoid building costly new energy infrastructure all while generating economic growth.

It’s not too late to address these issues. There are a host of very sensible proposals on the table that will keep retrofit moving while we wait for the Green Deal and ECO - and their systems, finance and business models – to be ready to start delivering on their undoubted potential, and to push energy efficiency firmly and permanently into the housing market.

Richard Griffiths is policy and campaigns consultant at the UK Green Building Council