How can the Green Deal be called a ‘success’?

After just six short weeks, the Green Deal Home Improvement fund is no more.
The cashback fund, launched on June 9, abruptly closed to new applicants on
Thursday night.

The Department for Energy and Climate said “overwhelming popular demand” meant
the allocation of £120m – meant to last until April 2015 – has already been
hoovered up by households keen to install double glazing and insulation.

But few will be fooled into thinking this is a success, regardless of how the
politicians present it.

The first phase of the Green Deal, a loan scheme where households were leant
money to install measures, paid back through their electricity bills, was
unpopular from the start. Just 2,828 households had signed up for a loan by
May this year – far short of the initial DECC target of 10,000 by the end of
2013.

There is a keen interest in the idea itself – demonstrated by the large number
of households getting assessed to see what measures could work in their
home. But the loan is too complicated, and the interest rate too high.

The Green Deal Home Improvement fund was meant to offer a simpler way for
households to cover the costs of installing energy efficiency measures.
Solid wall insulation, for example, typically costs £9,950 to install – far
more costly than cavity wall insulation and enough to put off most people.

The GDHIF offered £6,000 cashback for installing solid wall insulation, as
well as £1,000 for installing two other measures from an approved list.
There was also £500 if you had recently bought your home, and £100 towards
the cost of being assessed for the scheme.

Sound generous? It was – and it was clear from the start that households liked
the offer. The cashback you could claim completely covered the cost of some
measures – a £1,500 grant could pay for the typical £500 cost of cavity wall
insulation and £1,000 on replacement doors, for example.

Households claimed £25m in vouchers in the first four weeks, something Energy
Secretary Ed Davey said proved the Government had finally “got it right” on
the Green Deal.

“The early evidence suggests we have got it right,” he told
the Telegraph earlier this month. “We are very pleased with the
take-up – it is slightly higher than our expectations – but it is a bit
early to be clear how it will pan out.”

Well, now we know. The Government cut the cashback rates on Tuesday, and two
days later shut the fund completely, apparently surprised at its popularity.

It is unclear what will happen next. There was a total pot of £540m earmarked
for this package over three years, but we do not know if and how the
remaining funding will be released. A final figure on the number of
households that will benefit from the cashback is also yet to emerge.

DECC, which made the announcement late on Thursday, said that it “will monitor
voucher redemption rates and will consider whether to launch a further offer
should funds become available”.

Meanwhile, households lucky enough to get their vouchers approved will be
waiting to claim the cashback. Those hoping to benefit from the scheme will
be disappointed – especially if they have already paid for an assessment.
Companies who have spent months preparing to market and deliver this scheme
have suddenly lost their customers. And our houses are not getting any
better at keeping the heat in.

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