Ten years ago, on this day, January 28, 2013, it all went wrong…
“Energy efficiency policy in the UK is at a watershed. On January 28th 2013, the Green Deal formally began operation. The Green Deal is a market-based, demandled financial mechanism providing up-front loans for energy efficiency measures, which are repaid using the energy savings. A new Energy Company Obligation will run alongside the Green Deal to support vulnerable customers, poorer communities and higher cost insulation measures. A commercial sector Green Deal is also planned”
Sounds great. Um…
“So what went wrong? The Green Deal was an example of a ‘Pay-as-you-save’ type scheme, where loans are taken out to pay for the energy efficiency measures, and repaid over time from the financial savings created by these measures. It seems like a no-cost solution and an obvious winner. But not the British government’s version of it. One of the reasons for this failure was pointed out right at the start by critics, but ignored by government officials responsible for designing the scheme. This was that the 7-10% APR interest rate on the loan to householders was too high – in fact several percentage points higher than ordinary loans available on the high street. It was simply not affordable.
It also made many measures unaffordable within its own context – the ‘Golden Rule’. This rule was embedded into the legislation and stipulated that the savings generated by energy efficiency measures must lie within the cost of the measures. The Green Deal was initiated in 2013 under the 2011 Energy Act. It came with no target or grants. It combined accredited energy advice and installation with finance to be repaid in a period up to 25 years. Finance was attached to the property, and recouped through extra charges on the electricity bill (even if the savings were made on a different fuel, say gas).
The result? 300,259 total Green Deal assessments resulted in only 1,815 ‘live’ plans – a conversion rate of just 0.6%”
Thorpe, D. (2016) Why the UK Green Deal failed and why it needs a replacement. Energy Post, April 18. https://energypost.eu/uk-green-deal-failed-needs-replacement/
The amount of carbon dioxide in the air was roughly 396ppm. As of 2023 it is 419.
The context was that there was a Coalition government in the UK, and the Liberal Democrats were trying to get the elephants that are Departments of State to tapdance.
What I think we can learn from this
This stuff is difficult. Wicked. Superwicked, superwicked on acid and steroids. And we’re all gonna die. We are toast, but we are not going to be toasty, at least not in winter…
What happened next
Another, smaller, scheme went tits up in 2021. And millions were screwed by energy price spikes in 2022, 23 , 24 and so on until the apocalypse…
What do you think? Does this pass the ‘so what?’ threshold? Have I got facts wrong? Interpretation wrong? Do comment on this post.
References
Thorpe, D. (2016) Why the UK Green Deal failed and why it needs a replacement. Energy Post, April 18. https://energypost.eu/uk-green-deal-failed-needs-replacement/