RIBA and UKERC weigh in with “serious concerns” about Green Deal

The warnings by RIBA and UKERC, issued on the same day as a Department of Energy and Climate Change (DECC) consultation on the Green Deal is set to close, adds to a growing weight of opinion suggesting the Green Deal is set to fail. 

"The RIBA wholeheartedly supports the ambitious aims of the Green Deal," Anna Scott-Marshall, RIBA head of External Affairs said. "We want the Green Deal to work, however in order to stop it failing at the first hurdle the Government needs to ensure that the outstanding issues raised in the consultation are tackled."

The Government has said the Green Deal will kick-start a £14 billion investment programme over the next decade in energy saving upgrades to households and businesses. It plans to insulate 14 million homes by 2020 through the scheme and says at its peak could create 250,000 jobs. Key to the Green Deal is the way it is to be financed. Under the scheme, households and businesses will be offered loans to pay for the energy efficiency improvements, which will be paid back over many years through the savings achieved on energy bills.

RIBA said, as well as concerns over its delivery, the institute was also worried about the level of protection offered to consumers by the scheme, the funding and incentives for take-up of the scheme, and the design of the Energy Company Obligation (ECO), a new initiative whereby consumer energy companies will have to provide £1.3 billion a year in energy efficiency upgrades for low income and hard to insulate homes.

Among its recommendations is the creation of consumer-facing guidance to deal with issues around the consents that must be obtained – such as planning permission; performance targets and performance monitoring of the Green Deal; and ensuring there is skilled specialist attention for historic buildings and traditional older buildings. 

Heavily critical of the depth of evidence and analysis presented in the Government’s Green Deal proposals, the UKERC said it wanted greater clarification as to how the Green Deal will fit with, and complement other reforms and initiatives being proposed, such as the Renewable Heat Incentive, and Feed-in Tariffs. It warned that plans to end subsidies under the Carbon Saving obligation of the ECO alongside the introduction of subsidies for all low carbon electricity supply technologies would create "a market distortion between supply and demand".

The centre also called on the Government to offer an accredited assessor service that is both subsidised and independent of the 'Big Six’ energy companies, in order to instill consumer trust in the Green Deal, and said it wanted to see the relaxation of the so-called 'Golden Rule’, the principle whereby the installment payment for the energy saving measures should not exceed the projected associated cost savings on an average bill for the duration of the Green Deal Finance arrangement, which could be for as long as 25 years. The Golden Rule, The UKERC argues, has "on balance more risks than benefits, risks inflating consumer perceptions, and should be relaxed into a general guideline, with clear arrangements for top-up finance".

RIBA and UKERC’s concerns follows criticism of the Green Deal by a number of other influential organisations, not least the Government’s own climate adviser, the Committee on Climate Change. It recently warned the Green Deal would not meet its target of 14 million homes by 2020, but instead would only reach two to three million households because the onus was on households and businesses to opt into the scheme rather than the energy companies being obliged to carry out energy efficiency measures, as they are now. 

Earlier this month, the Royal Academy Engineers also raised concerns about the 'opt-in’ element of the Green Deal, suggesting instead that householders should have to 'opt-out’ of much bigger insulation schemes that would be carried out street-by-street and housing estate by housing estate.