Government predicts 93% fall in loft insulation work, putting carbon targets at risk

Work on some of the most energy efficient home insulation measures will dramatically decline when the flagship energy efficiency scheme, the Green Deal, goes live later this year, the government has admitted.

Official estimates obtained from the Department of Energy and Climate Change (DECC) by Building show that the rate of installation of loft insulation is expected to fall by 93% when the Green Deal and the Energy Company Obligation (ECO) are introduced, while cavity wall insulation will fall 70% (see graph, below).

If borne out, the installation rates will fall to a fraction of the level needed to hit wider carbon reduction targets set by the Committee on Climate Change.

While installations of solid wall insulation, which requires more building work, are predicted to soar under the estimates for the Green Deal, this is a more expensive way of reducing carbon emissions.

The falls are due to projected low uptake of the Green Deal, and because existing schemes, such as CERT, which subsidise loft and cavity wall insulation, will cease at the end of 2012.

Ministers are now considering urgent policy changes to improve take-up. This will include using a £200m fund, announced after the government’s estimates were made, to provide a direct “cash back” payment to householders that take part.

In addition, the communities department is set to introduce “consequential improvements” in Part L of the Building Regulations when it consults on changes later this month. This could force homeowners to undertake Green Deal energy improvement measures to their home when they carry out other major works, seen as a key driver of Green Deal uptake.

New estimates on uptake, taking into account any policy changes, will be issued with the final policy detail in July. The changes come amid growing concern over how the Green Deal will work, including the ability to get long-term warranties for the work, and the impact of solid wall insulation on older buildings.

A spokesperson for DECC admitted that the consultation on Part L will examine how to increase uptake of “energy efficiency measures in existing buildings”.

She said: “We do not agree that there will be low uptake of the Green Deal. We want it to benefit as many homes as possible which is why we’re making it more ambitious and effective than anything before.”