There are far better deals than the Green Deal

 Minister Greg Barker signing off £224 million of public money this week to finance the Green Deal.

For those disillusioned with the Green Deal, there is no shortage of alternatives, many of which are more attractive and less hassle.

Energy Secretary Ed Davey was keen recently to assure the public that the Green Deal will have a significant uptake and make a difference to the lamentable energy efficiency of the UK's housing stock.

There were plenty of people willing to express scepticism, especially given the off-putting cost of obtaining an initial assessment (around £100) and the 7% interest rate on the loan which makes many measures unaffordable within the context of the Golden Rule, that the savings generated must lie within the cost of the measure.

But the Green Deal is not the only show in town. Far from it.

One of the alternatives is that there are plenty of quick win, low-cost measures you can take yourself to save energy and money on bills that are not even catered for with the Green Deal.

These include simple draught-proofing of doors and windows; installing flue gas heat reclamation on non-condensing boilers (cheaper than buying a condensing boiler); or installing secondary glazing (almost as good, but not as nearly as expensive, as installing double glazing).

But you may still need cash, even if these measures will pay for themselves quickly, at least for the last two measures, and for many larger jobs.

For this, there are many loan offers for energy efficiency on the market, beginning at 0%, and all lower than the Green Deal. We will look first at offers for householders, then businesses and the public sector.

Top of the list is the offer from the Co-operative Bank. It is offering an Energy Efficient Advance with an interest rate of just 1.04% for the first two years over the Bank of England base rate, i.e. 1.54% or an AER of 2%. Up to £20,000 may be borrowed, and you can even take a payment holiday for up to 6 months. There is an approved list of measures, which includes the usual kinds of insulation and double glazing, as well as a few renewable electric and heat technologies.

Not to be outdone, the Nationwide Building Society is also offering an energy efficiency loans scheme with interest rates from 2.29%. Its Green Additional Borrowing service allows existing mortgage customers to take out loans of £5,000 to £20,000 to fund anything from heat pumps to double glazing, insulation and solar panels.

And for some time the Ecology Building Society has offered its "C-Change Retrofit mortgage" that has a discount on its standard variable rate of 4.9%, of 0.25% for every grade improvement in the building's Energy Performance Certificate (EPC) rating that is delivered through home improvements.

Then there is the Royal Bank of Scotland's new energy efficiency loan service, which will complement its already successful renewables loan scheme. Under this, its bank managers will offer energy efficiency audits to small business customers, which will recommend behavioural changes or building improvements. Financing will be offered to cover the cost. However, the cost of an initial audit may be offputting: around £1,000. But with saving possible of around £9,000 a year, based on about £20,000 of spending, RBS says, it's still worthwhile. The interest rate is unknown at present.

Some councils offer their own interest-free energy efficiency loans to householders. For example, Wirral Borough Council, which offers a loan for loft and cavity wall insulation, central heating boilers, draught-proofing and solar water heating. Wigan Council is another example.

Even better is a set of schemes in Scotland, which include not only interest-free loans of up to £2,500 but grants of £200 as well. It's worth checking your local authority website for similar deals.

There are several differences between these types of schemes and the Green Deal. 

Firstly, the loans are unsecured. Secondly, the Green Deal aims to have many checks and balances on the quality of the work, and of the contractors who carry it out. One may only employ approved assessors and installers; but with many of the other deals on offer, any contractor may carry out the work, and of course it's a case of ‘buyer beware’.

The above schemes are generally for homeowners or tenants.

But what about businesses and the public sector?

For SMEs, there is always the Carbon Trust energy-efficiency loans, which are available at 0% interest, for amounts between £5,000 and £200,000. They are often used to upgrade heating systems but can be used for insulation and other types of refurbishment and equipment. In Northern Ireland, amounts of up to £400,000 are available.

For bodies in the public sector, there is the Salix range of funds. They are different for the different provinces of the UK, but in each case are available for schools, NHS, educational institutions, public services and local authorities. They are interest-free loans, repayable over a four-year period. With many measures paying for themselves well within this period, this results in a net zero cost or even cost benefit soon to clients. So far, over 2,230 energy efficiency projects have been undertaken in England in the last two years. This has resulted in annual energy savings of £27 million from public bodies, not to mention 159,000 tonnes of annual CO2 savings.

Under Salix' Energy Efficiency Recycling Funds scheme, amounts as high of £500,000 can be loaned. This is matched by the client and fed into a ring-fenced fund, to be spent on improving energy-saving projects with a payback of less than five years. The energy savings are returned to the fund until the original project investment is repaid. After that, the client can keep the savings. The fund itself can stay in place.

There are also, for businesses, Enhanced Capital Allowances, allowing businesses to purchase energy-saving plant or machinery specified on the Energy Technology List, which is managed by the Carbon Trust. This provides businesses with a 100% first-year tax relief on their qualifying capital expenditure. So, if a business pays corporation tax of 28%, for every £1,000 spent on such equipments, the annual tax bill reduces by £56, providing a cash flow boost of £224 for every £1000 spent in the year of purchase. Of course, on top of that is the saving on energy bills.

So, for those disillusioned with the Green Deal, there is no shortage of alternatives, many of which are more attractive and less hassle.

It really is a no-brainer; everyone should be looking into these.

DECC’s own draft Impact Assessment projects says that between 2013 and 2020, six million lofts and 6.3 million cavity walls must be insulated, but the Government admits that only 700,000 lofts and 1.7 million cavity walls will be insulated under the ECO. We need as many ways to meet the target as possible, so all of these schemes are very welcome. I expect several more pay-as-you-save schemes to come on the market in the next year, now the model has been established.

Green Deal will be a lame duck: Government sets out its unambitious terms

Ed Davey, Energy Secretary, learning how to insulate solid walls. Some think he should take this up permanently...

The Government has set out the parameters of the Green Deal energy efficiency scheme, which have been met with a muted response from the industry and consumer groups.

The proposals outline the secondary legislation to be enacted, the expected extent of the work that will be undertaken, and new measures to strengthen consumer protection, reduce industry burdens, and implement the Energy Company Obligation (ECO).

But DECC confirmed that it now expects the Green Deal to take up to 18 months to get going. Its introduction "will happen gradually, building towards a 'natural peak' in the spring and summer of next year", DECC says. “Functionality will be phased in, with collection of the Green Deal charge beginning early in 2013."

The Green Deal for business will launch alongside the domestic Green Deal as had been originally planned.

DECC says the scheme will cost around £17.3 billion over ten years and bring £25.6 billion of benefits. The ECO (mandatory fuel poverty action) alone is expected to prevent the emission of 27.8 mega tonnes of carbon dioxide over two years.

The list of eligible measures has been extended from 30 to 45 measures, with fewer solid wall and more cavity and loft insulations expected than were in the original consultation. However, the annual rate of loft insulation will be substantially less than it has been in the past few years.

As a result, the Impact Assessment accompanying the proposals says, "job losses from parts of the cavity and loft insulation market are likely".

Despite this, the Secretary of State for Energy, Ed Davey, said he believes the Green Deal "has the potential to support up to 60,000 jobs in the insulation sector alone, more than doubling the number of jobs in the sector, and making a real contribution to green growth".

For comparison, 4,700 installers were employed in the insulation market in 2007/8, which covers loft and wall insulation, and another 22,000 in the wider supply chain.

"We have listened very carefully to what industry, consumer groups and other organisations have told us," Davey said in a statement. "Broad support for a managed, tested and careful introduction of the Green Deal fits exactly with our objective to provide an excellent customer experience from day one and a market where a range of new players can readily participate."

However, speaking for consumers, Audrey Gallacher, Director of Energy at Consumer Focus, said: "We are concerned that the Government has still not outlined further steps to stimulate consumer demand for the Green Deal. Without clear incentives to attract consumers, such as council tax or stamp duty discounts, we are worried that people won’t see the benefit or relevance of the scheme to them."

He added that “much more needs to be done" to help the vulnerable in society, “given the millions of pensioners, families and disabled people struggling to afford to heat their homes" and proposed that the Government should use some of the revenue that it will receive from carbon taxes "to get help to those who need it."

The Impact Assessment says that it expects that the average saving per household on bills will be £50-60 per year by 2023. But with work costing up to £10,000 per household this would take 200 years to pay off at this rate, allowing for absolutely no saving on the bill for householders. It is only designed to operate until 2030.

Ministers have always said that the customer will experience reduced bills and at the same time be able to pay off the loan taken out to finance the energy efficiency measures from further savings on the bill.

But customers with bills lower than the national average may find that their repayments will be higher after a Green Deal than previously, the impact assessment says. This is because at the heart of the Deal is the Golden Rule, which limits the amount of finance that can be attached to an electricity bill, and which is based on average energy users' bills. Green Deal Providers had been told that they must now obtain a written acknowledgement of customers' awareness of this before work can take place.

The impression of financial chaos is underlined by the decision a few days ago by some business leaders from the Green Deal Finance Company to suspend work. Kingfisher, British Gas, Willmott Dixon, Carillion, Marks & Spencer and Travis Perkins are amongst those who have written to senior officials complaining that a lack of funding is hindering their work. They are calling for £40m in start-up funding to cover initial construction and early operating expenditure and a further £260m from the Green Investment Bank to secure access to capital market funding. At the current rate they say they won't be in a position to lend money until well into next year.

Rhian Kelly, CBI Director for Business Environment policy, commented that: "the Government needs to move quickly to put everything in place. It must ensure that businesses who want to get involved are in the best position to do so and put the right policies in place to stimulate consumer demand."

The main thing is the money. As Nathan Goode, Grant Thornton's Head of Energy, Environment and Sustainability, observes: "Virtually nothing is said about the Green Deal Finance Company, other than a general statement alongside other possible options in the framework document, while an answer on the disbursement of the early adopter money is postponed until later in the year. The role of the Green Investment Bank appears still to be unresolved."

The Government has still not decided how to spend the £200 million allocated in the Autumn Statement to encourage early uptake of the Green Deal. With only four months left to go till the scheme is scheduled to start, this has raised some criticism, not least from the group of Pioneer Green Deal providers who signed a Memorandum of Understanding with DECC to start work early.

Nevertheless, DECC is estimating that between £1.1 and £1.3 billion will be lent to householders by 2015.

Greg Barker tweeted optimistically: "Full steam ahead #GreenDeal but the roll out from the autumn will be very carefully managed so we grow from strong foundations".

His enthusuiasm is not shared by fellow MPs, less than half of whom have indicated that they will promote the uptake of the Green Deal, in a survey conducted by Velux, Land Securities and the Glass and Glazing Federation. The survey of 100 MPs found that more than a fifth (21%) were unlikely to promote the scheme, 20% said they were neither likely nor unlikely to champion it, while 11% were still unsure.

What will it finance?

The Impact Assessment estimates that up to one million solid wall insulations will be completed by 2022. It also estimates that 1.2 million easy to treat cavities will be filled out of the current potential of 2.6 million. Including loft top-ups of around a quarter of the six million potential and the non-domestic sector’s abatement, this contributes 9 MtCO2 of savings within the second Carbon Budget period and a further 16 MtCO2 to the third.

Just 364,000 loft insulations are envisaged up to 2015. This contrasts to 800,000 that were installed in 2009, 540,000 the following year and 870,000 last year. The full total envisaged by 2022 is just 1.7 million.

Either added to this or included within this is, “an extra 540,000 lofts and cavities" to be filled in “hard to treat cavities (and lofts if bundled with them)” under the ECO.

DECC's argument for this reduction in the number of loft insulations is that the cost of these measures has now come down, as a result of previous subsidies, in the same way that the cost of solar photovoltaic installations came down, and so requires less subsidy. This is in comparison to other energy-saving methods in the home such as external wall insulation.

However, very few external wall insulations are likely to be conducted under the scheme, as the payback period is typically far too long. What would make sense is that the measures which secure the most money and carbon saving for the least amount of expenditure should be implemented first. These are the quick wins, like topping up loft insulation and the still unfilled cavity walls around the country.

Protection for customers

Some consumer protections have been tightened as a result of the consultation, but other burdens on Green Deal Providers have been removed to save them money.

Among the protections are that Green Deal Assessors will have to tell customers before they visit whether they are independent or tied to a particular provider, and how and how much they are paid.

However, cold calls will still be allowed, but customers will be permitted a cooling off period of at least one day after a cold call has been made and before the assessment is carried out.

It is confirmed that the interest rate charged on the loans would be at a fixed rate for simplicity's sake and to allow consumers to hedge against future energy prices. However providers can increase the whole charge by 2% a year, in line with the inflation target of the Bank of England, which will “allow them and customers to capitalise on some of the expected increase in savings due to expected fuel price inflation”. This will be set at the outset of the deal.

The whole process will be overseen by a separate Green Deal Ombudsman and Investigation Service, the details of which will be announced shortly.

The ECO

Energy suppliers with more than 250,000 customers will be required to take part in the ECO scheme. This will involve spending £1.3 billion a year on three obligations, rather than the two originally proposed: Affordable Warmth, Carbon Saving Communities and Carbon Savings. They will be administered by Ofgem.

The new element, the Carbon Saving Communities Obligation, is designed to target insulation measures in the bottom 15% of low-income communities, 15% of which will be targeted at rural, low income households.

This was hailed by the National Housing Federation. But its policy leader Pippa Read added that the Government should "think again about the continuing exclusion of social landlords from one pot of funding for fuel poverty, and to simplify the process of securing consent for work in blocks of flats".

Under the Affordable Warmth Obligation, any measure will be eligible for support if it reduces the notional cost of heating the property.

District heating will be eligible under the ECO Carbon Saving obligation when connections are delivered as part of a package that also includes SWI or non-standard cavity insulation.

For providers

Already, a full set of National Occupational Standards has been finalised, enabling qualifications to be developed, and the Green Deal Installer standard (PAS2030) has been published, which controls the processes and the quality of service the customer can expect before, during and after the installation.

The Green Deal Register will open in early August 2012, and accredited certification bodies can then begin applying for the power to be able to certifying assessors and installers. It will be administered by the Registration and Oversight Body, which will overlook the process.

All assessors and installers who want to be Green Deal authorised should contact the appropriate certification body to find out how they can become certified, a list of which can be found on the DECC website.

One provider, Garry Worthington, Head of Green Deal at Climate Energy, said: "we are disappointed that the Government remains undecided about its £200m fund to kick-start the scheme". He called the current plans to use this purely as a cash-back incentive over the next two years "misguided" and said they should "be used much more creatively to support regional schemes, local innovations, jobs, communities and delivery to give take-up an initial boost.

"We would also urge DECC to reconsider its support around promoting Green Deal and creating awareness of the scheme."

All in all, it looks as if the Green Deal will be a light, rather than dark shade of green.

UK Solar industry predicts 1GW of installations in the next year

We're going to see a lot more of these in the UK.

The UK solar industry now sees a bright future for itself following last Friday's decision by the Supreme Court to refuse the Government permission to appeal on the ruling that solar PV installations registered after December 12 last year and before March 3 this year could qualify for the 43.3p kWh subsidy rather than the 21p rate the Government tried to enforce.

Many companies have plans for large-scale solar in particular because they see new possibilities from the Renewables Obligation Certification scheme (ROCs), which gives two ROCs for each MWh for schemes over 5MW, and under which there is no size limit.

There is even talk of solar farms as large as those found in Europe, up to even 40MW in size, in the south of England. One player predicts 1GW of plant installed in the UK over the next year.

Emma Hughes of Solar power Portal says that "now that the feed-in tariff fiasco has reached a conclusion many are looking forward to working in the UK solar industry in 2012, especially now there is opportunity under the Renewables Obligation."

REC Solar, Canadian Solar, Q-Cells and many others are all of the opinion that if the component prices decline as expected, and energy bills continue to rise, opportunities for ground-mounted solar to become cost-effective will increase.

REC Solar is hoping to double its capacity this year by installing approximately 60MW, a large proportion of which will be ground mounted.

Superhomes

At the domestic and business consumer level, more than anything else the government has done, the installation of panels on so many roofs across the country has got people talking about energy and its importance.

All over the country this weekend, owners of homes who had installed green equipment or upgrades threw open their doors for visitors interested in doing eco-refits themselves.

Besides solar PV systems, visitors to the 'green showhomes' on these tours saw every type of upgrade from simple insulation and draught proofing measures to complete overhauls and rebuilds, involving many types of green heating from woodchip fired boilers to solar water heating systems, and even in one case, a tank which combined four different kinds of heating.

Many of those on the tours had had their interest in the subject first aroused by seeing solar panels on neighbours roofs.

This indicates that a chief aim of government policy has succeeded: increasing public awareness in energy matters, even though investment in photovoltaic technology in this country is not cost-effective at the level of subsidy initially set by the feed in tariffs.

But although many of the thousands of people on these tours knew about the Feed-in Tariffs, a high level of ignorance was revealed about the follow-up schemes, the Renewable Heat Incentive and the Green Deal, indicating the huge amount of work that the Government yet has to do to publicise these initiatives.

The 'Superhomes' tours were organised by volunteers in many towns and cities in England and Wales, either by the network members themselves, or local Transition Towns groups.

Several were oversubscribed, indicating the increased popularity of the subject, further evidence of which was the changed nature of last week's Ecobuild exhibition in London, which was far more upbeat, corporate and mainstream than it had been in previous years, with much floor space taken up by solar and heat pump installers.

Speaking at the Ecobuild exhibition, Energy and Climate Change Minister, Greg Barker said: “This is an aspirational agenda. We know people are always looking to improve their home even in times of austerity. It’s part of the British DNA.”

John Gaffney, who organised a tour in and around Llandeilo in Carmarthenshire, said “many of the homes we have seen this weekend who have solar photovoltaic panels installed still think it is worth the investment even with the reduced tariff."

“It seems so complicated from the outside, knowing what to do," said one of the super homes tourists, Peter Jones of Llangadog, "But seeing what other people have already done is a terrific help in getting ideas about what is possible in your own circumstances."

A highlight of this tour was a home which had both water and space heating supplied by both a ground source heat pump and solar water heating panels, with the electricity for the pumps supplied by photovoltaic solar panels supported by FITs. “We generate more energy than we need, so we are still actually paid by the energy supplier after we have used all the energy ourselves," said owner Caroline Langdon.

Green Deal red tape removed

Last week, Greg Barker sought to remove doubts that the Green Deal implementation would be delayed, but did say there will be a “managed” roll-out of the scheme, meaning that some aspects will launch before others, chief of which may be the Energy Company Obligation, which is simpler to arrange.

He said that the Government would be responding to the Green Deal consultation in April and secondary legislation would appear “by summer recess”.

"This doesn't affect the planned October launch,” he said.

He told attendees to the exhibition that red tape was being removed from those who wanted to become accredited installers, including the requirements to have a surety bond in place prior to being authorised; to hold warranties for the 25 year length of the plan when they were longer than standard industry warranties, e.g. for boilers,; and the requirement that installers pay for an Independent Conciliation Service.

Instead, a new Green Deal Ombudsman capable of handling complaints will be appointed.

"Remove stamp duty"

UK Green Building Council chief Paul King has called the Government’s handling of the solar FITs “catastrophic” and said it is now crucial that the Government instills confidence in businesses preparing for the Green Deal.

This weekend, many visitors on the superhomes tours expressed fears that if they invested in renewable heat systems that the tariff rate for these would be reduced in the future. Many appeared unaware that tariff rate reductions did not affect those whose installations had met the deadlines.

In this respect the public perception arising from the solar FITs fiasco has been extremely damaging.

To rebuild confidence, and create more publicity, Paul King has called on the Government to link the Green Deal with stamp duty and council tax, making less energy efficient homes pay more through the tax system.

He said it didn't matter if the implementation of the Green Deal was delayed if it meant that its integrity would be preserved and the fine detail was in place and did not have to be amended subsequently.

He said: “I would much rather delay it rather than go and blunder it as it will take 10 years to get it out of the public consciousness.

Collective energy purchasing

In a further bid to engage consumers with energy purchasing, today, Ed Davey has written to all of the energy suppliers asking them to support collective purchasing schemes as another way of helping householders engage easily with the electricity market and bring prices down.

He wrote: "I want to make it easier for consumers to club together and use their collective purchasing power to engage with the market and to get good deals on their gas and electricity."

This was a key part of the Consumer Empowerment Strategy that Ed Davey launched as a Minister in the Department for Business Innovation and Skills last year.

He said particular you want to see schemes that reached out to “include more vulnerable customers and people who don't shop around for their gas and electricity".

The purpose of the letter is to encourage all energy suppliers to engage with these organisations on their ideas.

Personal carbon trading "could fill the Green Deal gap"

Personal carbon trading is at the heart of a new proposal from academics to reducing energy use in buildings and help meet the aims of the Green Deal.

It comes in the form of a strategy document, Achieving Zero, being launched today by Dr. Brenda Boardman of Oxford University's Environmental Change Institute, which she hopes will help transform the UK’s built environment in a fair and equitable way.

Clinching the Green Deal

Dr. Boardman claims her recommendations will "lift millions of people out of fuel poverty, and improve the UK’s energy security" in a way that is "considerably cheaper than providing new energy supply".

The report comes at a critical time, as DECC's mandarins are now mulling the responses to questions about the Energy Company Obligation (ECO) and Green Deal's implementation in the recent consultation process.

The Environmental Industries Commission’s Executive Chair, Adrian Wilkes, has pointed out that "its successful implementation will be no easy feat" since it must "have widespread appeal and take-up from all sectors and demographics if it is to be successful".

Not only does it need the "required skills for Green Deal Assessors", but a broad "list of qualifying measures, products and systems" to cope with "the disparate number of building sizes and uses".

Most importantly, "it is vital that the scheme is felt to be financially viable in the eyes of both the suppliers and the consumers," he said.

Dr. Boardman's low carbon diet plan

Dr Boardman, who has long been a passionate advocate of domestic energy efficiency as a way of curbing fuel poverty, takes the view that the Green Deal must be seen strategically as part of the move towards the 2050 zero carbon use target.

“The change in perspective is substantial," she said, launching her report at Salford University, "as in future the value of our homes and offices will be linked to their energy efficiency.

"Reducing our demand for energy becomes an investment for every property owner.”

Achieving zero describes a triple-win situation through jobs, improvements to infrastructure, and energy security.

“We already spend ￡35bn a year on improving and maintaining our buildings," she says. "We need to refocus 40% of this into energy-efficiency and spend less on expensive kitchens and conservatories.”

Her key recommendations include:

• progressively more challenging, legally-binding standards of energy efficiency for properties, based on Energy Performance Certificates in homes and display energy certificates (DECs) for business properties
• a network of Low Carbon Zones set up by local councils that target the worst performing homes, especially those occupied by the fuel poor, using the legal obligation to eradicate fuel poverty (where reasonably practicable) by 2016 under the Warm Homes and Energy Conservation Act 2000
• remaining emissions in households being mopped up "through some other policy that covers all energy use, such as personal carbon allowances (PCA)".
•  

Personal carbon allowances

PCAs have been promoted by Dr. Boardman before. They give individuals an annually reducing carbon budget and they are rewarded if they live within their budget by being able to trade surplus allowances.

DECC has previously rejected them as unnecessary, given the existence of the Emissions Trading Scheme.

However, the failure of this scheme to provide sufficient incentive to invest in large low carbon infrastructure due to the oversupply of credits and their consequent low price, has led to scepticism and the Treasury's crestfallen contemplation of the cost implications of its commitment to introducing a carbon price floor.

PCAs, because they promote fairness and personal lifestyle change, remain attractive and for this reason are the explored by a new book, "Sharing for Survival: Restoring the Climate, the Commons and Society" to be published next month, co-authored by a group of campaigners that includes the late Richard Douthwaite.

PCAs are being used in practice now by one pioneering firm to reward employees and stakeholders for making energy efficiency improvements.

Green consultancy WSP Environment and Energy's scheme has 2,200 individuals taking part on a voluntary basis from 15 different organisations, including National Grid, Ecclesiastical Insurance and the London Borough of Haringey.

Its director, David Symons, says the scheme helps "staff understand that sustainability is relevant to them".

One of the scheme's members, Inga Doak, Head of Environment at Invensys Rail praises the scheme, as it "demonstrates pro-active leadership... It was fascinating to see people's perceptions of their carbon footprint and it helped to blow some carbon myths out of the water."

The home refurbishment mountain

Dr. Boardman sees PCAs as complementary to actions which reduce the carbon emissions burden of things that are outside individuals' control, like the state of the buildings they use.

The rate of activity required to meet the Green Deal targets is staggering: for every hour over the next 39 years, 82 existing buildings should be retrofitted to the level of band A on the energy performance certificate, Dr. Boardman calculates.

This is a 25% faster than has been achieved over the last 40 years.

If this were to be done, by 2050, all of the UK’s 28 million properties would be so well-insulated that they would require no external energy for space heating.

Electricity use, per property, would be halved and supplied solely from renewable electricity on the grid as a result of policies on lights and appliances, the report says.

How would this be financed? The report envisages that building improvements will continue to be the responsibility of the property owner, with Government providing zero-interest loans to low-income owner occupiers.

Once minimum standards are attained, properties would become more valuable, and be an asset in which lenders may have an equity stake.

Other financial inducements could come in the form of reduced tax liability (stamp duty, council tax, VAT), but at a scale required to ensure popular support in conjunction with the regulatory framework.

The size of financial incentives is inversely proportional to the certainty of the regulatory environment, particularly on minimum standards, Dr. Boardman says.

Value for money

An emphasis on reducing energy demand would result in the most cost-effective cuts in the UK's carbon emissions, with the benefit of lower bills and greater comfort for consumers.

The alternative, being touted by some in the Coalition Government, of a higher level of new, expensive electricity-generating capacity, implies considerably higher bills for users, thus pushing more households into fuel poverty, without providing any improvement in the level of energy services or spreading wealth by improving building value, or raising public awareness of energy use.

It therefore represents greater value for money.

Crucially, it all rests on the level of the interest rate at which capital is lent to finance the work and the period over which it is to be repaid.

Dr. Boardman concludes, "The UK cannot meet its legal obligations on eradicating fuel poverty by 2016 and 80% reduction in greenhouse gases by 2050 without most, if not all, of the proposed initiatives".

Construction industry and public "not ready" for the Green Deal

The UK construction industry is largely unaware of - or unprepared for - the opportunities which the Green Deal represents, and the Government has a long way to go to convince the public to take part, according to two new pieces of research.

A survey by the Chartered Institute of Marketing Construction Industry Group has found that only 35% of product manufacturers believe that the Green Deal - due to be implemented in under 14 months - represents an “important opportunity", and only 31% have suitable products ready to meet the demand.

Organisations surveyed - 100 manufacturers and 15 installers, who will be required to renovate the nation's 29 million homes - appear unclear as to what opportunities the Green Deal represents for them and what they should be doing about it.

Yet the Government believes that by 2017 there will be a workforce of 100,000 qualified installers. Furthermore, the products and systems supplied to home owners will need to be approved by the UK Accreditation Service in just over a year.

Moreover, these products must not disappoint the home owner once installed but must work effectively. The British Standards Institute is developing a Publicly Available Specification (PAS 2030) for this purpose.

Installers must also be fully trained and home owners must know how to take advantage of their new products in a year's time.

What motivates the public?

When questioned, suppliers said they believe that home owners' reasons for installing energy-saving services are mostly driven by financial considerations: reducing energy costs (33%), for generating extra income (22%).

They see the principal benefits being reducing energy bills (55%) and generating renewable energy at home (45%).

This is backed up by a second report, The Green Gap, by YouGov for utility and environmental consultancy Gemserv, which found that 61% of homeowners would consider installing technology such as solar PV panels, hydro power or using biomass fuel to generate their own energy.

However, over half said the technology is too dear, a third didn't know how much cash they would get back, and over half - 54% - didn't know that the Green Deal is about energy efficiency in the home.

14% thought it was to do with protecting outdoor spaces like forests, and 9% thought it was about encouraging take-up of low carbon cars.

Chris Ashworth, author of the CIMCIG report, Taking Sustainability To The Consumer, said this was a wake-up call to installers and manufacturers who seem to be failing to grasp the enormous earning potential of the Green Deal.

He said: "The main challenge for manufacturers in this sector is to understand the motivations of the UK consumer.

"As a committee, (the institute) is dedicated to helping marketers in the construction industry develop best practices and capitalise on opportunities.

"In the current market conditions it takes initiative and imagination to create sales."

The need for the right marketing

The report found a disconnect between the sales and marketing departments of manufacturers, while marketing did not seem aware of initiatives being taken by the sales departments.

The Institute recommends that marketeers change the language they use in communicating with the public. “The language of low carbon is not seen as relevant to the choices people make in their everyday lives" says the report.

It is for this reason that the Zero Carbon Hub, which supports the building of new zero carbon homes, is recommending the use of the term “a new way of living".

The Institute has recognised that the Zero Carbon debate is actually impeding progress in motivating the public.

Currently, DECC's Behavioural Insights Team is researching how people can be influenced by incentives, joint action in their communities, and by behavioural feedback.

So far, it has found that homeowners need simple, clear and powerful information to help them make decisions.

The barriers for them include: a lack of understanding, lack of awareness, a conservative attitude to change, mistrust of installers, and cost.

The CIMCIG report breaks down the public into different segments who need to be approached in different ways: 'positive greens' make up 80% of the population; 'waste watchers' make up another 12%; ‘concern consumers’ make up 14%; ‘sideline supporters’ are 14%; ‘cautious participants’ are 14%; ‘stalled starters’ are 10%; and the ‘honestly disengaged' make up the last 18%.

The report concludes by saying the entire construction industry must work together - trade associations, manufacturers, contractors, wholesalers and installers - in an effective supply chain, in contrast with others such as energy companies and major retailers who have recognised the opportunity and are starting to act. Otherwise, traditional retailers risk being marginalised as the Green Deal becomes mainstream.

Installers of solar electricity systems for the Feed-In Tariffs have already shown how to take advantage of government support. For example, the Green Home Company has secured private finance to allow it to install free solar photovoltaic systems in the Kent area.

One positive initiative is where energy companies have been partnering with merchants to make it easier to buy insulation at subsidised prices, by creating online calculators so that homeowners can work out how many rolls of insulation to buy, and by offering free delivery.

The Energy Saving trust's website Think insulation is also a useful one-stop shop for consumers.

To help stakeholders DECC has set up four forums through which it is developing support for accreditation, capacity and innovation, and how to maximise energy efficiency.

Join me for a free webcast on sustainable home renovation

Join me for a free Webcast presentation on sustainable home renovation, and ask any questions you like. It's Wed. 12th January at 5pm. Register here! http://www.earthscan.co.uk/tabid/101760/Default.aspx

Greening homes to become easier with one-stop shop

A new Green Homes Service will from April 1 2008 provide a single point of contact for people for home energy audits, plus advice on how householders and landlords can save water, reduce waste, green their travel, and connect to grants and offers from energy companies.

It will result in a regional network of one stop shops to be rolled out nationwide by 2011. Home energy use is responsible for 27% of all carbon emisiions.

Launching the service on November 20, Environment Secretary Hilary Benn said: "There's a lot of help out there, but itís hard to know where to start. The Green Homes Service will cut through the confusion by providing a one stop shop, including a green MOT for your home and a green home makeover."

Managed by the Energy Saving Trust - revamped with an additional £100m - the Green Homes Service will also link people with the successor to the Energy Efficiency Commitment (EEC) from energy companies for discounted or free products such as cavity wall and loft insulation. The EEC has only had limited success so far because of consumer confusion over why the likes of British Gas and nPower want customers to spend less money with them.

The service will also offer a range of existing and new grants and cheap loans, and pilot a premium service for a green home makeover using trusted suppliers and minimising hassle.

The EEC's successor (previously announced), the Carbon Emissions Reduction Target (CERT), will save 4.2 million tonnes of CO2 per year by 2011 through efficiency measures with a typical saving of £90 on fuel bills. CERT also offers incentives for energy companies to install more renewable energy.

The Energy Saving Trust has so far only been a reactive service (people contact it). It will soon be able to be proactive and take the message directly to people's doors.

The Service is part of the Act on CO2 campaign. Over 500,000 people have already visited the web-based Act on CO2 calculator to work out their carbon footprint and obtain a customised plan to reduce it.

This calculator is, by the way, not as good as this one from Carbon Footprint Ltd - a member of the London Chamber of Commerce and the Carbon Trading Group of the Environmental Industries Commission - EIC.