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Rescuing the Green Deal – a plea from Greenpeace

Which? has already challenged the government on the Green Deal to make sure that it offers a good deal for consumers. In this guest post from Dr Doug Parr, find out why Greenpeace UK also has cause for concern.

I know from being involved in energy issues for years that although efficient energy use in our homes is important, talking about it is also likely to make people’s eyes glaze over. This is sad.

It’s one of the few things that can radically bring down bills. And when it’s done right, it cuts carbon emissions, reduces our imports of fossil fuels and creates local employment.

Nearly half of UK energy use is in buildings – it should be a high priority, because all that energy has to be paid for, by households or businesses.

Contrary to the impressions from some media coverage, our backing for onshore wind added less than £5 to the average bill last year, while the increase in the wholesale cost of gas added an extra £100 in just 12 months. The only immediate way to address the costs of volatile fossil fuel prices is to reduce energy use; and the key to this is more efficient buildings.

That’s why we think it’s important the government gets its energy efficiency policies right, so we can make our homes warm and bills affordable.

Is the Green Deal really a good deal?

The idea behind the Green Deal is fine. It is good that an occupier can borrow all the money needed to make a building energy efficient and pay it back from the reduction in energy bills.

It’s also good that the repayments and investment stay with the house. People shouldn’t be put off making changes because they know someone else will benefit from them when the property is sold.

But despite the benefits of home efficiency, the Green Deal looks unlikely to help increase the uptake of efficiency measures. It may even have the opposite effect – as the marketplace for residential energy-saving measures could even collapse once it is introduced. Cavity wall insulation is forecast to drop by two-thirds and loft insulation by 90%. Notably the government has not stated a level of ambition for its new scheme.

What can be done to make the Green Deal better?

First, real incentives are needed to keep these markets moving. Government funding should be used, perhaps by a reduction in council tax or stamp duty.

Second, the UK has a particular problem with hard-to-treat homes which often have solid walls and no cavity that can be easily insulated. Dealing with these homes is expensive. We’d like to see the government bring forward a proper development plan for treating these kind of houses across the UK, with R&D, pilot programmes and innovation focusing initially on the fuel-poor households for the roll-out, and use this experience to bring down the costs.

It would also help if Green Deal finance could be kept at low interest rates. These changes will require initial government investment (and times are tough).

Greenpeace, along with more than 140 MPs and nearly 100 organisations like Asda and Barnardos, is supporting the Energy Bill Revolution campaign which calls on the government to use the money it gets from carbon taxes to help make homes super-energy efficient.

Let’s strike a contract between the government, taxpayers and bill payers to benefit the environment and bring our bills down. Polling says people will back a green transition but the government must take the lead and do its bit.

Which? Conversation provides guest spots to external contributors. This is from Dr Doug Parr, Chief Scientist and Policy Director at Greenpeace UK – all opinions expressed here are their own, not necessarily those of Which?

Comments
Guest
Phil says:
2 July 2012

I suspect eyes glaze over because the subject has been done to death, if markets are falling it’s probably because there are very few houses left that don’t have cavity wall insulation and a loft stuffed full of fibre glass. There is a limit to how energy efficient the average house can be made on top of which we’re into the realm of diminishing returns. The first four inches of loft insulation might’ve made a significant, noticable improvement but subsequent layers each make a smaller contribution and take longer to recover their initial cost.

As somebody who lives in a pre-Victorian house with solid walls and an upper storey that protrudes into the loft space just what can be done to improve insulation? It seems the only answer is to add internal or external walls which is not only expensive but reduces room size and might damage the original fabric of the building.

Guest

Phil,
I’m an energy assessor and I can assure you I still come across plenty of houses with insufficent insulation, both loft and cavity. You’d be surprised how many lofts I see full to bursting with junk, just rubbish, and owners too lazy to clear it out. (although to be fair some are infirmed and unable) I also come across plenty of people who have no idea if they have cavity walls let alone if they are filled.
This is unfortunate because currently loft and cavity insulation is relatively cheap, and it gives the best savings payback of all retro efficency improvement measures.

I’ll admit solid wall insulation is a tricky area. Good solid wall insulation is expensive and many people I see don’t really want to lose room area or spoil the exterior look of their house anyway. So it’s often a case of if you chose to live in such a property while energy costs continue to increase, and either can’t or won’t do anything about it, larger bills are something you unfortunately have to live with. I don’t think there are any energy suppliers who’ll give you a discount because you live in an older property.
Having said that there are other measures you can take to at least offset the inefficency of your solid walls. Good windows, good loft insulation, good well controlled heating system and replace that open fire with a more efficient wood or multifuel stove, or just block the chimney.

There is of course a limit to just how much you can do practically to improve the energy efficiency of very old buildings. They are never going to be as efficent as modern houses designed with efficiency in mind.
Sometimes it just has to be compromise between character, energy bill levels and bank balance.

Guest
Phil says:
4 July 2012

By the sound of it then the houses left uninuslated, leaving aside those unsuitable for cavity wall insulation for whatever reason, are those owned by people who are either too poor or too old or too feckless to care. I can’t see these folk getting involved in a massive uptake for the Green Deal, especially as it stands at the moment.

As for my own situation I double glazed the whole house thirty years ago and four years ago had a new boiler installed which reduced my oil consumption by two thirds notwithstanding the severe winters we’ve had since. Adding insulation to the walls is a none starter, internally it might be OK if the house was undergoing a total refurbishment and empty but in an occupied property; forget it. The hassle and expense of removing and refitting plumbing, radiators, curtain rails, shelves, switches, sockets, fitted cupboards, sink, basins, bath and in my case stairs make it a non-starter and that’s before the reduction in floor space is taken into account.

Although easier to fit the economics for external insulation are even worse, Which? reckon on a cost of £5,500 for a three bed semi, my place is detached so would be more because of the extra wall although that might be balanced by greater savings. However the roof would need to be extended and guttering and external wires, including the mains supply, removed and replaced. Which? also calculate that the pay back time could be as much as 27 years; this on a product with a 25-30 year lifespan! Not only am I unlikely to see any benefit but if I were to borrow the money from the Green Deal the total cost would be £12,800 over the 27 years. It isn’t a saving, on the contrary it’s a complete waste of money and resources.

I’ve kept the open fire, I block up the chimney when it’s not in use but I’ve only once in 30 years had to buy any logs so can afford to be a bit profligate. It’s 30″ across and a wonderful thing to dry out in front of after having a bath.

Guest

Phil,
Sounds like your place isn’t too bad considering it sounds pretty old. Newish Boiler (pity it probably has to be expensive oil) and double glazing. If your heating is well controlled (programme timer, room thermostat and rad stats) and you have a decent amount of loft insulation, you’re probably doing better than some 1950’s, 60’s or 70’s houses. And blocking off the chimney when not in use will make quite a difference.
I agree with you about the Green Deal payback period for solid wall insulation. This is a good example of where the Green Deal will flounder, and I wouldn’t expect many to go for solid wall insulation for the very reasons you give.
This is where extra incentive in the form of subsidy is needed, otherwise the numbers just don’t add up, and it won’t happen.
For some time loft and cavity fill has been subsidised so I see no reason those with solid walls should not to some degree at least benefit now.
Remember however there are still those people who don’t want to lose room area or spoil the external look of their property. I don’t really know how they can be helped.

Guest

I agree with Phil – I have insulated my house from top to bottom – all at my considerable expense. The only real improvement I appreciate is the large reduction of external noise, The only course left is to build a small heavily insulated cubicle in which to watch TV – but would destroy the character of the house I love.

Guest

I would agree with just about all Dr Doug Parr says in the above blog. Especially where he mentions the need for real incentives.
For example, get yourself a new condensing boiler through the “Green Deal” and pay nothing up front, sounds great, but pay for it plus interest by forgoing the savings that it will provide in your energy costs. OK it has to be paid for somehow, but by the time you’ve paid back the loan the service life will be almost up and you’ll be ready for another new boiler and you might actually therefore find yourself no better off than if you’d done nothing, and stuck with patching up your old boiler for as long as possible?
Now to be fair different improvement measures will have different costs to install, have different savings potential and therefore different payback periods, but few have any really visible money saving potential over the short to medium term. So without that real and clearly realisable cost reducing incentive is the “Green Deal” take up going to be very good? I have my doubts.

Incentives like a reduction in council tax or stamp duty for houses with better energy efficency ratings are I think excellent ideas to encourage both “Green Deal” take up and energy efficiency in general. However I feel to get the Green Deal to really succeed more incentive in the form of additional subsidy will be required.
Unfortunately I don’t think the Government will come up with the incentives so the potentially very good scheme that the “Green Deal” is will flounder and credibility will be lost, and remain lost even after the penny drops and Governmental corrections are made.

They really must get it right before the scheme starts.
But I’m not sure they will.

Guest
Phil says:
4 July 2012

Question:- Green Deal repayments will be added to the household electricity bill but what happens if the owner moves? Does the loan go with him/her or stay with the house? No one’s going to enjoy having to pay for improvements to a house they no longer live in especially if they have to take out another Green Deal loan to bring their new home up to standard.

At least the loans process is simple and easy to understand:-

http://www.decc.gov.uk/assets/decc/11/tackling-climate-change/green-deal/4350-green-deal-domestic-endtoend-process-map.pdf

Not much scope for anything to go wrong there!

Guest