UK Government announces £20 million Green Deal Communities scheme

The Department of Energy and Climate Change (DECC) in the UK has announced a new £20 million scheme to help authorities deliver a key energy efficiency scheme.

The Green Deal Communities scheme will enable local authorities to bid for finance from an estimated fund of £20 million. The Deal allows homeowners to make alterations to their property that improve energy-efficiency with repayment taken through the property’s electricity bill rather than from individual owners. 

To qualify for the funding, authorities will have to identify ‘target streets’ and areas in their regions that could ‘most benefit’ from the Green Deal, and then offer incentives to households in these areas to encourage them to commit. However, funding will only support those households using Green Deal finance or self-financing to install Green Deal measures.

DECC has said it will also establish a Green Deal Provider Forum to look at ‘ways of supporting and enhancing the Green Deal and the energy efficiency retrofit sector’. The forum will be chaired by Ian Cheshire, Group CEO Kingfisher Plc, and will include senior representatives from the Green Deal Provider community and broader retrofit industry, with support provided by the Green Deal Oversight and Registration Body.

Commenting on the new scheme, Energy and Climate Change Minister Greg Barker said: “If we are going to deliver the Green Deal at real scale then we need a ‘street-by-street’ vision and a ‘street-by-street’ plan. It starts here! However, local authorities really know their areas best. They know which streets and properties could most benefit from a Green Deal to improve their energy efficiency, and what local people need to provide them with a greater choice.

Local authorities will be able to bid up to 31 December 2013 or until the funds are ‘exhausted’.

Read more about the Green Deal Communities fund.

The new funding pot comes after official statistics released last month showed that despite government’s predictions that up to 14 million people would sign up to the deal, to date, only four people have Green Deal plans ‘pending’. This is just 0.01 per cent of the 38,259 householders that have had assessments to improve the energy efficiency of their homes.

Many people have criticised the government scheme, with Shadow Minister for Energy and Climate Change, Luciana Berger, saying that the Green Deal was a ‘shambles’, after Barker admitted in November 2012 that that no UK householders had signed up to take out the energy-efficiency loans, despite the application process having been open for over a month, and DECC offering homeowners up to £1,000 if they signed up as ‘early adopters’. 

Critics say reasons for the slow uptake range from customers being ‘confused’ over the deal, overly high interest rates (around seven per cent), and reluctance to attach a 25-year loan to a property – which many think will affect saleability. DECC refutes this latter claim however, pointing to a recent joint report by the University of Cambridge, University College London, and the University of Reading that found that making energy-saving improvements to homes could increase their value by 14 per cent on average, and up to 38 per cent in some parts of England. 

The deal was initially launched by government with the aim of reducing the effects of ‘leaky buildings’ (thought to be responsible for 38 per cent of the UK’s greenhouse gas emissions), cutting electricity bills and making financial savings equal to or greater than the costs attached to the energy bill.