THE BLOG

Why Energy Efficiency Must Be a National Infrastructure Priority

21/01/2014 09:50 GMT | Updated 22/03/2014 09:59 GMT

They say honesty is the best policy, and when that policy is the Green Deal we definitely need to be honest. One year into the Government's flagship energy efficiency scheme it is clear that it simply isn't delivering on the scale required, with disappointing uptake to put it mildly. At the last count just 458 homes had installed energy saving measures against a target of 10,000 by the end of 2013, and its beleaguered sister scheme the Energy Company Obligation (ECO) was heavily cut in December's Autumn Statement.

A number of issues have been blamed for poor take-up of the Green Deal, from early IT glitches and inadequate marketing to overly-complex administration. But it is the relatively high interest rates on Green Deal loans - around 8 per cent - that have most commonly been cited for deterring consumers from signing on the dotted line.

A new report published today by the UK Green Building Council which specifically examines Green Deal finance suggests that while the rates of interest alone are not discouraging homeowners from taking up the scheme, they remain a significant barrier. So how can we fix them? The only viable way to lower interest rates, the report argues, is for Government to step in and underwrite the loans. Such an intervention is not unheard of, with the current Help to Buy scheme just one example of where Government feels it necessary to take on financial liabilities to help stimulate a market.

The bigger question is whether the Coalition considers energy efficiency within our homes a national priority. At a time when the so called "cost of living crisis" continues to make headlines and the debate over spiralling energy bills rages on, it certainly should be. Energy efficiency is the most cost effective and only sure-fire solution to cutting household's energy bills permanently. Yet if we recall last month's scaling back of "green levies", it would seem it is sometimes pitted as the opposite.

Retrofitting our 24 million cold and draughty homes - which account for more than a quarter of all UK carbon emissions - will be no easy challenge. One building will need to be retrofitted every minute between now and 2050 if we are to meet our legally binding climate change target of reducing emissions by 80 per cent come the middle of this century. So why is energy efficiency not treated as a major infrastructure project, one that is afforded the same priority as decisions on HS2 or aviation expansion?

The Chancellor and his misguided view that somehow green and growth are incompatible is the easiest figure to blame. He is now closely followed by the Prime Minister, who, like our changing climate, runs hot and cold on the green agenda, one minute arguing only the most energy efficient countries will prosper in Europe, the next reportedly ordering aides to "get rid of the green crap".

But we must also recognise there are many within the Coalition who are prepared to champion energy efficiency. The Government's promise to introduce a "Stamp Duty rebate" of up to £4,000 when installing energy efficiency work under the Green Deal - something industry has repeatedly called for - would encourage the one million annual housebuyers to introduce measures at the point of sale, a time when home improvement work often takes place. This could provide the impetus the Green Deal so desperately needs to get off the ground.

The reality is that the wider economic case for energy efficiency already stacks up. In 2011/12 the UK's energy efficiency market accounted for around 136,000 jobs and sales of over £18billion. And the Green Deal and ECO will have a huge part to play in this future market, with Government estimating the two schemes alone could support up to 60,000 jobs in 2015. Surely, as the saying goes, this is just too big to be allowed to fail.