This is a guest post by Mark Wilson. I’d be interested in your views – Su
Take a step back for a moment and have a look at the Green Deal. Its every fibre is laudable, and intentions totally honourable. We, that is absolutely everyone (there are no exceptions) must reduce the amount of energy we consume. For ‘energy’ read ‘electricity’ in general and ‘heat’. Of course there are other sustainability issues that are of equal importance, but not within the sights of the Green Deal: That of our critical dependency on resources such as ‘water’ and ‘raw materials’. If we are not careful that situation will turn into a ‘Deal or no deal’ scenario, with a far less leisurely approach.
On face value the Green Deal is here for the long term. The current minister responsible for the Dept. of Energy and Climate Change, Edward Davey, says he is looking to a market that will run through to 2030. That may be the master plan, but of course it will be the activity within that market that will be proof of that particular aspiration.
The Golden Rule
The Green Deal seeks to provide energy saving measures to the consumer at no additional cost to what they currently pay for their heat and light. The government are offering a cast iron *binocular guarantee in the guise of the ‘Golden Rule’. This states that the costs of the improvement should not be more than the expected savings resulting from them, and those savings should be calculated over a period not exceeding the expected lifetime of the installation.
*Binocular guarantee – a guarantee that once out of sight is to all intents and purposes out of guarantee
Of course with flimsy guarantees come flimsy descriptions. The word ‘expected’ is paper thin, but has been given a corrugated fold in an attempt to carry the huge load put upon it by the DECC. If that paper should get wet, or even damp, even the sharpest corrugations are going to fail.
For the sake of our futures we should be trying to pick out the positives. The main one being the unswerving goal to relieve our reliance on traditional and failing energy supplies. But it’s easy to pick holes, and the government has not made it difficult. Consumer take-up of the Green Deal is reliant, at base level, on promises and expectations, which could read that “we promise to reduce the amount of energy you use, and we expect that it won’t cost you any more as a result”. The message is short of the words “but it could”.
To their credit the DECC have constructed a framework upon which the Green Deal hangs, expecting an army of Green Deal providers such as energy providers, manufacturers, retailers and industry professionals will do the rest. They expect that the Green Deal will create it’s own microcosm of an industry, generating growth in manufacturing and installation of associated products and work for energy savvy professionals in the administration of it all. But if it all comes back to the ‘Golden Rule’, is that, on its own, enough?
There have already been calls by the CIOB, UK-GBC and Carbon Trust for ‘headline’ incentives that might see a reduction in VAT associated with Green Deal installation, and a cut in stamp duty for the purchase of homes that have had a significant amount of work completed under the scheme. But the DECC has thus far cocked a deaf ‘un.
To be fair, it would seem a fruitless exercise on the government’s part to start off giving away more than they need to. Good common business sense really. This is a groundbreaking scheme after all; so one can understand the gas being set to low with a view to timing the boil. If we need further incentives, we can shout a little louder then.
The Consumer
One cannot help thinking that there will be two consumer mentalities in operation. The first being the wholly predictable “What’s in it for me”, the second, the scepticism that has been engendered by a half arsed construction industry, whose reputation for a dubious job has become insidious.
The DECC to their credit insist that Green Deal installers comply with very clear quality control standards identified in the recently published PAS 2030 (Publicly Available Standard). So arguably, with accreditation under this banner being an appreciable cost, the back street contractor will not be interested. That implies that all the larger big players are angels. I don’t think so.
The Green Deal is scheduled for launch 1 October 2012, and private companies are already canvassing consumers with invitations to register interest. However, consumer awareness is the only driver here, and whilst the Green Deal is hardly a secret, detailed publicity is notable by its absence to all but the building tech savvy.
Those able to throw off their apathy blankets will be able to discover what’s on offer from the DECC here, and you can also download details of What measures does the Green Deal cover?for both ‘domestic’ and ‘non domestic’ properties, under the page section ‘Green Deal: Commons Committee Stage Documents.
The prime targets of the initiative are families perceived to be in ‘Fuel Poverty’ – not being able to keep adequately warm at reasonable cost. I took a straw poll recently amongst friends and family. Whilst the words ‘Green’ and ‘Deal’ were familiar, they could not display any subject knowledge beyond the title.
The industry knows about the Green Deal, but arrows directed at the targeted consumer have only managed a flesh wound thus far, and are failing to get to the heart of the matter, as they continue to ask what will the Green Deal do for us?
Mark Wilson is a Chartered Architectural Technologist and sole practitioner in architectural and building design solutions. He blogs weekly through his own web site BuildingDesignExpert.com, with a passion for Architectural Technology and innovation within the construction industry and its future. He is currently presenting on ‘Specifying for a Sustainable Future’ at ecoShowcase events around the UK. You can contact him via the links on his web site for Linked In and Facebook, or follow him on Twitter @BD_Expert
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Storified by Su Butcher · Tue, Jul 24 2012 03:17:18
We have discussed the Green Deal on a number of occasions in our household and building/architectural practice. We can’t see the average householder being interested in doing something to their property that will only help them break even at best. Human nature doesn’t work in that way. If people can afford their energy bills they tend not to be interested in reducing expenditure. ( E.g. We are surrounded by houses currently being upgraded but nobody has added double glazing. Agas – yes, large expanses of glass – yes.)
If people can’t afford their energy bills they want to be shown ways to save money, not to break even.
Only the keenest will get involved and if someone is keen to green their house, they can probably find other ways to do it without having to involve a third party to assess the property.
The Green Deal will never work in its current format.
The issue of accurate guarantees for savings when installng Green Deal measures is one that clearly concerns DECC and they have gone to some lengths (through use of in-use factors on measures) to try to make the estimate of savings as safe and conservative as possible. Where in-situ savings are concerned and human behaviour comes into play it will always be tough to pin down exact savings. A conservative estimate and the ultimate rising cost of fuel will ensure that savings are enjoyed by those who engage with the Green Deal. Quantifing and putting a timing on that is the tricky bit!
Much of the negativity around the Green Deal is around the fact that CERT and CESP are being replaced by ECO. If CERT and CESP continued I believe that the Green Deal would get a much more balanced reception.
Following on from Rob’s point about CERT/CESP and ECO, I’ve seen a discussion on the Linkedin Group ‘Delivering the Green Deal’ called ‘Is the Green Deal a disaster waiting to happen?’ in which Peter Mallaburn comments:
Su, I left my thoughts on this post earlier this week, but it hasn’t been published, so I am trying to recreate them now.
Firstly, to agree with Rob. Short of policing every homeowner’s use of their thermostat setting, and preventing them from opening windows to cool down instead of turning the heating off, it simply isn’t possible to give a guarantee of savings.
Secondly, the prime targets of the initiative are most definitely NOT families perceived to be in ‘Fuel Poverty’. Whilst the GDA (Advisor) must be aware of what fuel poverty is, and be able to recognise those at risk of it, this is almost a side issue for Green Deal. The advisor will be able to refer them for help in ECO, but not much else. In truth, there isn’t much in Green Deal for the fuel poor.
Rather than the fuel poor, I would say that the prime target for Green Deal is what might be called the fuel rich – or more often, we refer to them now as the ‘able to pay’. Because they are able to pay their bills, they don’t have so much incentive to reduce them, and that’s the conundrum.
The trick for the GDA is to find a message that appeals to their fuel rich customer, and it isn’t necessarily going to be about reducing their bills. It might tap into their wish to stop adding to the energy suppliers’ profits. Equally, it could be about a more comfortable home, or an improved home, or one of several other messages recently discussed by Consumer Focus.
A few of the twitter folk were discussing this recently, and we were much exercised over whether it was useful to use the word Cosy… or does this smack too much of sitting on the sofa wrapped in a duvet?
Hi Linn,
I wonder if attracting the ‘able to pay’ will be impossible. I’ve noticed this with other services and products. People are very happy to pay a great deal of money for a new car or other comparative luxuries. They have to have a reason to change their behaviour – one that appeals to them.
Huge apologies for your previous comment disappearing into thin air, but glad this excellent version was rescued from the spam filter.
In my most optimistic moments Green Deal is a hugely exciting game changer. Maybe not in its precise form right now, but certainly for the future. I’m thinking about the way it creates an integrated team to promote and manage home improvement and energy saving measures, bringing together the marketing, communications and project management nous of Providers with the insight of well trained Advisors and the technical skills of the best Installers and tradesmen. The Green Deal will forge new working relationships between all these groups of people. It could change the whole RMI sector for good.
But….
The Green Deal will fail in a storm of Daily Mail fury and consumer cynicism if it leads to a wave of bodge jobs and scams.
As you may know, I am chairman of TrustMark, the Govt backed scheme that registers approved local tradesmen for RMI work.
We estimate that the Green Deal will lead to a vast surge in home repairs and maintenance work (“Sorry Mrs Miggins, I can’t install your lovely insulation until you get that leaky roof fixed…”). Assuming a 25% take up of Green Deal work in the pre-1980 owner occupied stock, we estimate an additional £2 billion per year in ‘ancillary works’, ie. essential repairs and mauntenance. That, of course, does not include the value of any additional home improvement work purchased by the homeowner at the same time (the new kitchen, which might as well go in if you’re insulating the solid walls etc).
That’s billions of pounds of work every year that falls outside Green Deal funding and outside Green Deal protection.
I met with Age UK yesterday and other groups concerned with protecting vulnerable people. We are united in our desire for a more energy efficient housing stock. But more importantly, we need to ensure all households know how to find vetted, inspected and insured local tradesmen, rather than leaving Green Deal customers at the mercy of findanyoldbuilder.com.
Educating the public is where Green Deal will fall down. If you consider that most people don’t know:
a) that they need planning permission to tarmac their over their front garden
b) that they need planning permission to put up garden buildings
I work with the general public dealing with various aspects of architecture, planning etc and even the afluent and well educated have little knowledge of government policies that relate to building.
Solar panels succeeded becuase reputable installers were able to advertise the benefits in the broadsheets. Gren Deal will need the same sort of publicity.
How will they get their heads round this?
I have to agree with Liz that Green Deal will be a game changer. Indeed it is already. It has it big flaws and failings and will not be the solution or the big bang the industry expected, but …
The industry is now awake to the fact that we have failing building performance and that something needs to be done. It is sad that even recently designed/built buildings would attract Green Deal attention.
Green Deal has and will energise the industry into looking at many aspects of performance and build quality. I foresee a shift in on site quality management driven by PAS 2030, but also the consequence of failing installation and associated works.
Green Deal will undoubtedly force us to enhance and improve our relationships with each other inside the industry, but importantly with customers and clients (who have now been tagged as consumers).
Green Deal will drive us to more effective means of communications – embracing social media with eg ‘consumers’ may be the communication route of choice.
We have a new language in common use, from small SME builders to major GD providers. (We do need to be aware though that promoting Green Deal to customers as an ‘eco’ solution may turn off all but the green converts (who probably dont need GD anyway)
The green deal is widening technical debates for example on how to improve hard to treat buildings. Something that should have been sorted a long time ago.
Green Deal is making us question very seriously how we fund measures to improve carbon and fuel waste in our homes and buildings. Borrowing money at 7% may not work, but looking to Germany and New York where green deal equivalents are funded as low as 1%, with no golden rule, do work.
We have a long way to go, we are really just at the top of the iceberg in greening our building stock, but we do have to move fast if we are to meet carbon reduction targets for the UK.
Combine Green Deal with other game changers (for eg Building Information Modelling and the rise of CSR ) and with the current economic environment, makes for a very exciting and challenging sector.
Are we up for it?
I agree that a lack of marketing for the green deal is a problem, but the 7.5% interest rate is the bigger concern. I have written a more detailed analysis on my blog if interested: http://www.thegreenentrepreneur.co.uk
That’s a well-thought-out answer to a challenging quetison
It’s great to come back to articles like this and read the comments after all this time! How things have changed so dramatically