A cross-party committee of MPs has delivered the strongest blow yet to the green deal, the government’s flagship programme for energy efficiency, calling it “unattractive and uncompetitive”.
The latest figures for the green deal – formally launched in January after several delays – show that only 384 households have yet signed up for improvements, out of more than 71,000 households that received assessments under the scheme.
The green deal is aimed at encouraging people to install loft, cavity and solid wall insulation, which would reduce energy bills and the heat leaking from the UK’s draughty homes. But so far the main beneficiaries have been middle-class households receiving free subsidies for new boilers.
At current rates, critics have pointed out, it could take 160 years for all of the UK’s housing to benefit.
However, the All-party parliamentary group for excellence in the built environment released a report on Tuesday that roundly criticised the scheme. “Financially, the green deal is unattractive and uncompetitive. It is overly complicated and it doesn’t work for social housing organisations,” they said. The group of MPs also found that “there is currently little financial incentive for households” to improve the energy efficiency of their homes. The committee found the framework of the green deal was “not as strong as it needs to be”.
At present, loans for green deal improvements to properties are charged by lenders at about 8% interest. This is in contrast to mortgage payments, which from many lenders are currently charged at less than 2.5% on average. Householders applying for loans to improve the properties on which they have a mortgage are currently charged by most lenders at their ordinary mortgage interest rates for the improvements, which lenders generally approve of because they both reduce household outgoings and increase the value of the property.