Making sense of the Green Deal- What does it mean for us?

Last night, Thursday 13th October, saw The Bristol Energy Network and the Centre for Sustainable Energy (CSE) join forces to present an evening on demystifying the government’s proposed Green Deal and how we can make it work at a local level.  Held at the Watershed, in Bristol, the evening brought together community groups from across the city and further afield, including representatives from Bath, Frome, Cheltenham and even London.

The Green Deal is the government’s flagship measure to make energy efficiency improvements to the UK’s largely energy inefficient housing sector. In a nutshell, the Green Deal is designed to provide cheap finance to cover the upfront cost of making energy efficiency improvements within UK households. The money will then be paid back through household’s energy bills using the savings made.

Investment under the scheme will be tied to the house and electricity meter rather than the people who currently reside there. In this way, the Deal incentivises the uptake of energy efficiency measures by removing personal debt- the debt is tired to the property and therefore, removes the risk of homeowners moving to a new property before they have recovered the costs of their initial investment. 

As all participants came to recognise last night, whilst the idea behind the Deal holds some promise it is still some way from becoming a reality.  Fundamental questions remain about the structure of the Deal- how can the loans be competitively financed but still insure the interest rates are kept low? What is the upper limit to the loan? In practice, what can be done with the money available? Further questions abound over the implementation of the Deal- just who will deliver it? How will accreditation of installers work? But perhaps most importantly, questions remain over what will motivate households to take up the Green Deal?

Stimulating the debate, Phillip Morris, from CSE, gave a presentation on explained what the Green Deal is, its process and the role of the Energy Company Obligations (ECO) within it.  Following on, Simon Roberts, chief executive of CSE, elaborated how the Green Deal could work at the local level. At pains to emphasis this as work-in-progress, Simon outlined a local delivery model that would create a social enterprise, pulling together local contractors, local authorities and communities. The idea of a local delivery model is an exciting but daunting prospect. Not least because the Green Deal is purportedly a very ambitious project, but also because the way the deal has been set up. It is designed to capture big finance, it needs complex finance mechanisms to run, it involves a heavy regulatory framework and extensive accreditation systems. 

In spite of these obstacles, having a locally negotiated Green Deal delivery models seems a necessary and possibly fundamental part of making the Deal work in practice. And yet, the underlying implication here, that together we small fish can masquerade as a big fish in a big pond, was intriguingly met with proud confidence from the room.

However, turning away from the detail of the programme it was clear last night, that there will be an important role community groups can play in the deal’s implementation. For the main question remains- will many households want to have the energy efficiency measures installed? The rising cost of energy bills will help but given the hassle of having the measures installed, the relatively low levels of potential financial benefit and a lack of trust in installers, not least the energy companies themselves, all amount to being effective barriers to uptake. In contrast, community groups whilst being resource poor are much more effective at engaging people through rich locally-based social networks. And perhaps more crucially, community groups can embody more trust than many businesses, particularly the energy companies, and therefore motivate households beyond purely financial benefit.

It will be interesting to see how the Green Deal pans out over the coming months, but only when we know the legislative framework will we be able to decide what the Green Deal means for us.

 

The presentations for the Green Deal evening are now available from CSE's Green Deal event page.

Both Philip Morris' and Simon Roberts' presentation can be downloaded as one pdf, towards the bottom of the page.