Calderdale’s Energy Future expects householders to cut 25% of their carbon emissions by 2020, based on 2005 levels. To achieve this target, the Council will encourage households to buy in to the Green Deal, with the Council aiming to become a Green Deal provider.
As part of its programme of swingeing public spending cuts, the Coalition Government has withdrawn previous subsidy schemes for home energy efficiency retrofits like insulation. Instead, it has introduced the Green Deal -a scheme for householders to pay for improvements to their home energy efficiency by taking out loans. The idea is that they will repay the loans out of savings on their energy bills, over the lifetime of the energy efficiency measures – 25 years. The measures will be things like installing insulation, upgrading to more energy efficient domestic appliances and installing micro-renewables.
Estimates are that this will reduce the number of lofts that get insulated each year by 93%. Yes, mad or what?
A Calderdale’s Energy Future cost/benefit analysis, carried out by Leeds University and funded by the Department of Energy and Climate Change, shows that Calderdale households’ savings on energy bills would more than repay the energy efficiency investments within a few years. But that assumes that the Green Deal arithmetic adds up, and the evidence is that it doesn’t.
Climate Change Committee says Green Deal will lead to less insulation
The Committee on Climate Change, which advises the UK government, has said that entirely market-based schemes like the Green Deal haven’t worked anywhere else in the world and it isn’t likely to work here either. And the government’s own initial impact assessment in December 2011 predicted that the Green Deal won’t work. The June 2012 revised version of the impact assessment doesn’t substantially change the picture.
The Climate Change Committee recommends that the big six energy companies should pay for home energy efficiency retrofits
The Climate Change Committee has recommended that the government should require the energy companies to pay for all the home energy efficiency improvements needed to meet the 2022 target for reducing household carbon emissions. The CCC says that home energy efficiency retrofits should be carried out street-by-street, on a whole house basis – in other words, that each house should be thoroughly retrofitted in line with its individual requirements.
The Energy Bill Revolution alternative – the government should use carbon taxes to pay for home insulation
As an alternative to the Green Deal, the Energy Bill Revolution Alliance is calling on the government to use carbon taxes to pay for insulating the UK’s homes.
June 2012 update to Green Deal impact assessment
The government’s recent revision of its Green Deal impact assessment predicts that as a result of the Green Deal, the number of loft insulations will fall by about 83%, from about 900,000 in 2012 to 150,000 in 2013. This is better than initial impact assessment which predicted a 93% fall in loft insulations. But it’s still pretty disastrous.
The revised Green Deal impact assessment predicts less of a fall in cavity wall insulations following the introduction of the Green Deal than the initial impact assessment’s predicted 67% fall. The revised assessment predicts a fall of merely 43%.
The new impact assessment follows government changes to the original Green Deal proposals. In the face of widespread criticisms, the Coalition government has allowed some additional lofts and cavity walls in low-income areas to become eligible for the new, Energy Company Obligation (ECO) subsidies.
The ECO is a new requirement that the government is placing on energy companies, to spend some of the money they receive from customers paying their gas and electricity bills, on providing customers with subsidised energy efficiency/carbon reduction measures.
ECOs will replace, at a lower level, the current energy efficiency subsidies to customers that energy companies have to provide through the Carbon Emissions Reduction Target programme. So ECOs will reduce the amount that the big six energy companies have to give back to customers to help them improve their energy efficiency – at a time when the big six energy companies are profiting from scandalously high energy prices to customers.
The government’s initial Green Deal impact assessment
The original calculations were that with the Green Deal, loft insulation would fall from just over 1million a year, as carried out by current government schemes like Warm Front, to 70,000 a year. 2 million a year are needed to meet climate targets. Cavity wall insulation would fall from the current 510,000/year to 170,000 – far below the Green Deal target of 1.4 million/year. The initial impact assessment estimated that solid wall insulation will increase through the Green Deal, but not to levels that will cancel out the reductions in loft and cavity wall insulation.
Changing building regulations to make people sign up to Green Deal?
On 19th March, the Chairman of the Committee on Climate Change wrote to the Department for Communities and Local Government to “strongly support” the idea of changing building regulations, so that they would require loft and cavity wall insulation to be carried out whenever boilers are replaced or houses are extended. He says that since around 10 million boiler replacements are likely over the next decade, this new regulation would “buttress the Green Deal through creating demand and therefore provide more confidence that a market will develop.”
Energy Royd invited Calderdale Councillor Barry Collins to comment on Calderdale’s Energy Future’s reliance on the Green Deal as the way for householders to reduce their carbon emissions. Councillor Collins said, “It wouldn’t be useful for me to be involved in a debate which has already become polarised. Our position as the Council has been openly agreed in an open Cabinet meeting, and prior to that in public consultation meetings.” Around one hundred people attended the public consultation meetings.
The Green Deal is a privatised home insulation programme, following cuts to public spending on home insulation
The Green Deal is a change from previous policies of publicly funding improvements to household energy efficiency, through schemes like:
- the Warm Front scheme
- Big Six energy company subsidies for customers’s home energy efficiency improvements through the Carbon Emissions Reduction Target programme,
- local authority subsidies for low income and fuel poor households’ energy efficiency retrofits
Unlike the Green Deal proposals, which are likely to benefit better off households, current means-tested home insulation programmes benefit low income households. These programmes are due to be phased out by the autumn of 2012.
In 2011, the Coalition government’s Comprehensive Spending Review cut 80% of Leeds City Region local authorities’ funding for domestic energy efficiency improvements and carbon emissions reduction. As a result, Leeds City Region local authorities – including Calderdale – have had to replace their publicly- funded household energy efficiency schemes with attempts to stimulate the market for domestic energy efficiency improvements, in order to make the new Green Deal work.
Since the local market for energy efficiency measures has been shrinking in the recession, because people have less money to spend, this is likely to prove difficult. Chris Brown, Housing Regeneration Manager for Bradford Metropolitan Borough Council, has said, ”There is a question of whether the market will work without subsidies being available. We would suggest there needs to be subsidy available to entice customers to take up the measures.”
This means that Calderdale Council needs to try and attract private sector “partners” who will spend their Energy Company Obligations in the area. Together with other Leeds City Region local authorities, Calderdale Council intends to become a Green Deal Provider. This will require Leeds City Region to borrow the millions needed to provide upfront funding for the Green Deal, which participating households will then repay out of the savings on their energy bills.
Energy Company Obligations (ECOs) are new requirements that the government is placing on energy companies, to provide some subsidies for home energy efficiency improvements for fuel poor households and those in old stone houses which are expensive to retrofit (also called hard to treat houses). They will come into effect in September 2012 and replace the previous energy company subsidies for home insulation, which will end in December 2012.