Exclusive: Government's 'Green Deal' energy efficiency scheme is so ‘complex’ it deters homeowners from signing up

Just £3.4m of the initial £244m in funding has been allocated as take-up numbers disappoint


An ambitious Government scheme to improve the energy efficiency of millions of homes is so “complex” it is likely to be discouraging the public from signing up, the head of the company funding the project has admitted.

In an interview with The Independent, Mark Bayley, the chief executive of the Green Deal Finance Company, revealed that he now only expects around 1,000 households to have energy saving measures installed under the plan in its first year. And he conceded that so far his company – which has a start-up fund of £244m to loan to households – has processed applications worth just £3.4m and signed off on only 12.

The Green Deal was launched by the Government in January with an aim of improving the energy efficiency of more than 14 million homes by 2020. But it has been plagued by a series of teething problems and lower than expected take-up. Of 71,000 Green Deal assessments completed, so far only 961 households have signed up for Green Deal financing. This offers loans of up to £10,000 to fund energy efficiency measures paid back over 25 years through savings made on electricity bills.

In his first interview, Mr Bayley admitted that the complexity of financing the Green Deal could be putting off a lot of homeowners from taking part. This can involve a number of “home visits”, multiple forms to fill in as well as delays in credit checking. “There are still too many complexities facing the consumer,” he said.

“Often it takes several visits and the documentation can seemingly come at random. Some of the information is also not clear – and is not moved from one document to another. Embarrassingly some people are saying that it takes around three weeks to do the Green Deal finance. What I’m not clear about is it why it takes us three weeks and Barclays can do a personal loan in a day.”

Mr Bayley said his company was working with the 20 firms now licenced to do assessments to improve the process and reduce the amount of time it take to get loans approved. “We are trying to cut back on these complexities,” he said. “We are looking to see if we can get to a Green Deal plan in a day.”

Mr Bayley denied that the cost of the borrowing – which is just under 8 per cent a year – was putting many householders off the scheme. He said it was lower than most personal and credit card loans – and while more expensive than a mortgage, it did not include an arrangement fee.

“You cannot say people are not interested in saving money through energy-saving improvement at the same time as saying people are worried about electricity and energy prices.

“The average rate for credit card borrowing is 17.5 per cent and yet our APR is 7.9 per cent for a £5,000 loan over 20 years.”

The Green Deal Finance Company is a not-for-profit mutual which has been supported by the Government to provide financing for the Green Deal Programme. Mr Bayley joined the company from the government-owned London & Continental Railways where he helped to deliver the high speed rail link from the Channel Tunnel to London.

He admitted that the on the face of it the take up of Green Deal finance did not look impressive but said he hoped it would significantly improve over time. “There is good and bad. It is the case that 1,000 live plans compared to 71,000 assessments doesn’t appear on the face of it a great proportion.

“But there are reasons for that. Up to the end of the summer we only had three active companies and I don’t think it would be objectionable to say they were running it on a pilot basis. Now we have 19 good to go.”

Energy and Climate Change Minister Greg Barker said: “It is still early days for the new Green Deal market but encouragingly over 71,000 Green Deal assessments have now been completed. There is clearly growing consumer interest but crucially, assessments are also inspiring action – new research this week shows that 81 per cent of households who had a Green Deal assessment said they have, are getting, or intend to install at least one energy saving measure.”

“Over 173,000 homes have now had Green Deal measures installed with the help of the Energy Company Obligation (ECO).

“As more companies join the market ahead of the winter, the Green Deal and ECO are increasingly providing consumers with a new range of choices and opportunities to keep their homes warm, cut energy waste and importantly help hard working families with the cost of living.”

Going green: All about the scheme

What is the Green Deal?

A government programme that covers the upfront cost of energy-efficiency improvements to your home. Households can get loans of up to £10,000 to cover the work which is then paid back over 20 years through energy bills.

Is it worth doing?

Supposedly easy and relatively cheap, the simple concept covers a long and expanding list of home improvements – including replacing boilers, loft and wall insulation and double glazing.

So what are the problems?

They mostly involve financing, with endless paperwork and unclear information putting off customers. Delays in credit checking mean it can take almost a month to complete finance, compared to just 24 hours with some high street lenders.

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