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Green Deal Stuck On The Runway – But Will It Ever Take Off?

DECC has today announced that:

  • There had been 38,259 Green Deal assessments completed, where customers are given initial advice about what energy improvements they might be eligible for.
  • Of those, 241 households have confirmed they would like to proceed with work.
  • Four people have signed up for Green Deal plans
It' s a slow start - DECC expects that when the number of finance providers increases from the current five to the anticipated 50 by year end, this will spark market competition, customer interest and uptake.  But will it?

Our recent Delta-ee research with owner occupiers under the Microgen Insight Service tested customer attitudes to incentives, including the Green Deal.  Some of our findings included: 

  • People are used to paying for their system upfront – over 40% would prefer to pay cash, loans have low appeal.
  • Upfront grants are a popular incentive - even if they may not be as economically attractive as an ongoing subsidy.  This is because upfront cost is and remains a significant barrier to uptake.
  • Many customers have already heard of the Green Deal (two thirds of customers in our research had heard of the Green Deal – the same level of awareness as the FiT).  But the majority of customers said it was the least appealing out of the current incentives, evidence they currently struggle to see "whats in it for me?"
  • Customers have major concerns about taking a loan (especially at what is seen by many as a not particularly attractive interest rate) and a high number of customers are worried it would affect the value of their home.
So is the proposition under the current Green Deal ever going to be strong enough to attract thousands of customers?  If you consider some of the comments posted on the BBC website following their news story, then it seems unlikely.  Many of the comments support our recent research findings, and highlight how customers fear paying inflated prices and being the victim of mis-selling.

The Green Deal only works if the customer is placed at the centre and can clearly see "what's in it for me" (as opposed to 'big industry', 'government' or the 'greater good').  Presently, this does not seem to be happening – but if the Green Deal is ever to reach take off, it's absolutely critical.


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Thursday, 02 July 2020

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