As a member of Birmingham’s Green Commission and Localise West Midlands, Phil Beardmore  advocates a constructive role for government, local authorities, and established businesses. EH Smith has already done this, holding a public briefing at the end of March.

eh smith logoThis West Midlands firm stocks the most up to date ‘green’ products on the market. With energy costs rising they see that the argument for constructing energy efficient buildings has never been stronger and comment:

”Legislation on sustainability is only just starting to take effect in the UK, with much more on the way. Now is the time to understand the fundamental importance of sustainable, energy efficient and low carbon construction”.

“A lot has been written about Green Deal over the last 12 months and most of it has been less than positive…. It has also been wildly inaccurate in places. For example, did you know that up until November 2013 it wasn’t possible to complete a Green Deal plan due to the process not being complete? We have now teamed up with a Green Deal provider to offer a unique approach to this market and to enable SME companies to benefit from the Green Deal without the headache that it can bring.

On the Birmingham Eastside website and Political Concern, Phil Beardmore  described in more detail why the Green Deal scheme has not taken off and what we can expect in the future.

phil beardmore 3Local authorities everywhere launched Green Deal pilot projects. Here in Birmingham, Carillion Plc was appointed to deliver Birmingham Energy Savers, expected to be the biggest energy-efficiency retrofit project in Europe.

The Green Deal is a pay-as-you-save mechanism. The idea was that householders would not have to pay anything up front, and the cost of the measures would be recovered on a pay-as-you-save basis through the electricity bill. However, it became obvious early in 2013 that Green Deal was not working as planned.

Able-to-pay consumers by and large weren’t interested in the Green Deal as a finance mechanism because the interest rates were too high. The cost of measures overall through the Green Deal, including and excluding the interest rates, was more expensive than people could get on the open market. People with decent credit ratings could access credit at better rates than the Green Deal, or use their own savings.

People on low incomes found the Green Deal a difficult idea to get used to, for two reasons. Firstly, they tend not to plan their finances on a long-term basis, so the idea of a 25-year loan is not attractive. Secondly, they (in common with more affluent people) cannot understand why they pay the electricity company for a product that the electricity company is not providing (most Green Deal early entrants were construction companies, installers and retailers). Also, people on low incomes tend to be more mistrustful as to the accuracy of their fuel bills. This isn’t just a matter of having lower educational levels. Utility company billing systems for more affluent people are simply more reliable and accurate, because the utility companies have invested more in better billing systems for the Direct Debit customers whom they want to keep.The fuel-poor are seen as a liability by the utility companies because they don’t spend much and are a credit risk. So the payment systems that the fuel-poor use – payment-on-receipt, Economy 7, prepayment or pay-as-you-go – are more error prone because the customers that use them are not lucrative.

Beardmore commends the decision in the Autumn budget statement, hidden behind the “green crap” rhetoric, to raise the level of Green Deal Cashback, is a wise move, because in theory it should be easier to access, more transparent, and not controlled by the Big Six energy companies.

Through the Cashback householders can claim cash back from Government on energy saving improvements like insulation, front doors, windows and boilers, up to a total of two thirds of the amount to pay for the installations. The rise of Green Deal Cashback may well sound the death knell for ECO and also presents a political dilemma for the Labour Party. Caroline Flint has spoken of reforming ECO; I think the conversation may have already moved on beyond that.

A role for local authorities and national government . . .

Local authorities have become dependent on large contractors to deliver services for them. There is no reason why they should do the same with energy efficiency. They should make sure that people who can’t pay for measures outright know about alternative finance mechanisms such as the energy efficiency loans being offered by one credit union. There are small energy-efficiency businesses who are starting to make a success of Green Deal where big energy companies preferred by local authorities have failed.

If ministers are serious about ripping up red tape, they would allow local authorities to endorse local accredited providers, giving people confidence in recommended suppliers.

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Last word from E.H.Smith who asks, “Would you like to:

  • Just concentrate on installing?
  • Be paid on time, if not early?
  • Have a custom made system to manage the entire process start to finish?
  • Have local leads passed to you for installation?

If you answered yes to any of these, EH Smith Green Deal is holding a number of briefings in the New Year and would like to invite you to come and hear more.

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