The Green Deal – 5 Months In (Nearly)



The Green Deal – 5 Months In (Nearly)
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
The Green Deal – 5
Months In (Nearly)
Presentation to Cambridge
Cleantech Event
Richard Mellish
Deputy Director, DECC
19 June 2013
Green Deal – energy savings help pay for home
Green Deal helps people and businesses pay for energy
efficiency improvements through savings on their energy bills.
• Green Deal is a new approach to retrofitting domestic and nondomestic buildings in Great Britain – one of the Coalition
Government’s priorities
• An affordable way to improve and renovate millions of energy
inefficient homes and businesses making them more
comfortable and cheaper to run
• Innovative new finance mechanism, supported by a legislative
framework that ensures quality work
• Here for the long term - decades, not years
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
Why are we doing this?
• With increasing world energy prices, market volatility and rising
imports: energy efficiency never more important
• The cheapest energy is that we don’t use: save money, make
our homes more comfortable and cheaper to run; address fuel
poverty; reduce overall demand for power
• UK must reduce carbon emissions. Our old and draughty
buildings account for over 38% of them.
• The easy jobs are all but done – success through bill-payer
subsidy such as CERT. A step jump in scale and sophistication
is needed for the remaining challenge
• In tough economic times, any subsidy must be better directed ,
to where it is most effective and most needed.
What’s in it for customers?
New way of approaching energy efficiency:
• whole house retrofit
• 45 improvements in total
possible under Green Deal
Cavity wall
Tackles two key barriers to energy efficiency action:
- Who can I trust to do the work?
- How can I finance it?
Real choice. Customer in control . Many access points.
Protection against future energy price rises
Energy Company Obligation supports Green Deal
Solid wall
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
Simple customer journey – 5 steps
Assessor gives impartial
recommendations on what customers need
Provider arranges quotes to customer,
provides finance and arranges for installation
installs improvements
Customer enjoys benefits and pays provider
over time through savings
Extra support: “ECO”
Support for
Available to
Solid wall insulation
Hard-to-treat cavity wall insulation
Easy cavity wall insulation
Loft insulation
People living in low income areas (lowest 15%)
People on certain income-related benefits in
private housing
Heating improvements
People on certain income-related benefits in
private housing
• Don’t need to apply separately – should be included when Providers make quotes
• Different Providers will have different offers – customers should shop around
• Worth around £1.3 billion a year; comes from energy companies (“Energy Company
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
Key Feature 1: Trust
• Assessors, Providers, Installers must be accredited –
Quality Mark to prove it
• Comprehensive advice so consumers consider all
options – not pressure selling of one measure
• Standardised advice to make it easier shop around
• Cooling off periods, protection against cold calling etc
• Insurance-backed guarantees in case of faulty advice
or installation
• Single point of redress: the Provider
• Ombudsman to handle unresolved complaints
Key Feature 2: Finance
• The property owner can pay for some or all of the cost through a Green Deal
Plan, collected as an integral part of the electricity bill
• Costs will vary from provider to provider – shop around
• Maximum amount that can be borrowed, including interest, is determined by
expected energy saving. Once plan is agreed, payments are fixed.
• Not a mortgage or a personal loan. If the homeowner moves out they stop
• “Green Deal Finance Company” – a private sector mutual offering finance at
6.96% (+ fixed admin fees) to providers. 15 investors including DECC and GIB.
• Customers can still change their electricity supplier
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
What’s in it for industry?
• Beyond the major energy suppliers: market opening empowering
new businesses, particularly small firms in the supply chain, to
enter and to innovate
• Expected £10bn private sector investment in the next decade
• Green Deal anticipates a doubling of jobs in insulation alone to
60,000 by 2015
• Many entry points to the market. Different business models
Fully integrated one stop shop
National Brand with subcontracted delivery
Merchant or trade body with local SME delivery
Local brand (LA) with subcontractor delivery
Scope of DECC’s Role
Demand and Marketing
Green Deal and ECO
Managing and Supporting
the Framework
Oversight Body
OFGEM ECO administration
GD Ombudsman
CD Central Charge Database
Testing and assurance
£23m Financial support to
8 Core Cities
39 LA Consortia
£125m Green Deal Cashback
£2.9m Green Deal With It
ECO Brokerage
GD Providers and Finance
GDAA in force
GDFC operationally live
£244m stakeholder fund
DECC, GIB, EIB investment
Testing systems
ESAS National Energy
Saving Advice Service
Setting Standards for
Training for assessors and installers Code
of Practice & Quality Mark Standards and
Assessment Tools
The Green Deal ~ 5 Months in; Progress, Pitfalls and Priorities
19 June 2013
Very early days; encouraging progress
Supply Chain is Growing. As of end April:
• 55
Green Deal Finance Providers approved
• 942
Installer organisations registered
• 152
Assessor organisations registered, employing 1,274
Market is Building
• Nearly 19,000 Green Deal Assessments
• Over £130m of contracts traded on ECO brokerage
• Bilateral deals between energy companies and delivery partners for ECO
Consumer Interest is Present
• Calls to advice line and deal visits maintained above preLaunch levels
First full publication of Green Deal numbers imminent - 27 June

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