The demand by the UKGBC comes one year from the launch of the government’s ‘Green Deal’ energy efficiency strategy which has been plagued by a disappointing take-up among consumers, while the government simultaneously cut the schemes sister policy the Energy Company Obligation (ECO).
The UKGBC is calling on the government to create a national retrofit programme to help permanently reduce consumer energy bills while also creating thousands of new jobs.
“Improving the energy efficiency of our cold and draughty homes is the only way to permanently cut households’ spiralling energy bills and will be a major driver of economic growth” said UKGBC Chief Executive Paul King. “Government must make energy efficiency a top national infrastructure priority, as important as decisions on HS2 or aviation expansion.”
A new report published today by the UKGBC has found that more attractive Green Deal finance could help to boost the scheme. While the interest rate on Green Deal loans, currently 8-10 percent, is not the overriding issue, a lower rate of interest could increase take-up.
The report, produced by a Task Group of UKGBC members and other organisations, sets out a number of potential options for reducing the interest rate. These include a government subsidy of around £300 million for every £1 billion of Green Deal plans taken out by householders, a change in Green Deal policy relaxing the ‘Golden Rule’ in order to enable households to repay loans more quickly and alternative sources of finance from social investors or community funding.
“The report finds that while current interest rates are not the biggest barrier to take up of Green Deal finance, lower rates would make the scheme much more attractive to consumers” said Christoph Harwood, Partner at Marksman Consulting, who chaired the Task Group. “However, given the Green Deal requirements, this cannot be achieved through a standard market solution and so financial intervention at either a local or national level would be required to deliver a lower interest rate at the large scale required.”
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