By Max Clarke

The Government’s Green Deal risks failing to attract the businesses it needs to deliver its flagship energy efficiency scheme unless it provides greater clarity on how it will be financed and promoted, the CBI said today.

The Green Deal will allow people to take out loans to improve the energy efficiency of their properties, including for insulation, heating and lighting. The loans are to be attached to the property and will be paid back over a fixed period through the savings made on energy bills.

However, with a new CBI survey showing that three-quarters of the public do not even consider the energy efficiency of a property when buying or renting a home, the Government clearly needs to do more to get consumers to buy into the concept. This is a vital first step to ensure there is a market for the businesses that will deliver the scheme.

Dr Neil Bentley, CBI Deputy Director-General, said:

“Improving the energy efficiency of our homes and businesses is a sure-fire way of cutting emissions, as well as creating economic growth.

“The Green Deal is a good idea, but risks becoming a lame duck unless the Government tackles the big questions of financing and uptake.

“The Government faces an uphill challenge convincing home owners to sign up to the Green Deal, given that three-quarters admit they don’t consider energy efficiency when looking at a property.

“To ensure the scheme is a success, the Government needs to clarify how the Green Deal will be paid for in the early stages to give investors confidence, and make it simple and hassle-free for consumers.”

In a new report called A Real Deal? Making the Green Deal Work, the CBI is calling on the Government to deliver:
A financial model that is attractive to private investors with a decision by Spring on where the default risk will lie, ensuring that it does not undermine the ability of smaller firms to become providers;

DECC should also provide robust and realistic modelling to show expected payback periods, including for different types of properties;

A range of policies to encourage take-up of the Green Deal by the public, which could include rolling out Display Energy Certificates to commercial properties;

Promoting the Green Deal through targeted communications at appropriate trigger points. For example, when people are buying their first home or installing a new boiler;

And establishing a strong, recognisable Green Deal kitemark and system of accreditation to generate confidence and trust, both among potential consumers and providers.