A new House of Commons Public Accounts Committee report highlights failures with the design and implementation of household energy efficiency schemes, namely the Green Deal and the complementary Energy Company Obligation (ECO), put public money at risk and must not be repeated.
The committee consludes that the Department of Energy and Climate Change (the Department) implemented the Green Deal in 2013 without adequately testing the design of the scheme with consumers.
In practice, householders were not persuaded that energy efficiency measures were worth paying for through the Green Deal and take-up of loans was abysmal.
Richard Twinn, Policy Advisor at the UK Green Building Council, said: “The Public Accounts Committee report makes clear that implementation of the Green Deal was woefully inadequate. The wildly optimistic forecasts about take up were never realistic, and this point was made strongly by many in the industry at the time.
“Most of all the Green Deal simply didn't appeal to many of the householders it was trying to attract. The interest rate was unappealing and there was - and still is - a fundamental lack of demand for energy efficiency among homeowners which the scheme did not address. Calls for structural incentives such as stamp duty continually fell on deaf ears, and ultimately it was the taxpayer who lost out.”
Other key findings of the report include:
- The Department’s forecast that the Green Deal Finance Company would provide loans worth more than £1.1 billion by the end of 2015 was wildly optimistic – the actual figure was £50 million.
- The finance company has incurred large financial losses as a result of the low demand for green deal loans resulting in the Department writing off some £25 million of the amount it loaned to the company.
- While the complementary Energy Company Obligation scheme has led to energy efficiency improvements in over 1.4 million homes, the Department does not have the information it needs to measure progress against its objectives.
- In particular, it cannot tell what impact the schemes have had on reducing fuel poverty.
