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UK Government’s Green Deal is an ‘abysmal’ failure

In 2010, the incoming ConDem coalition government chose to end the older system of grants for home insulation and renewable energy generation in favour of the so-called Green Deal loan scheme in which households could pay for insulation and solar systems out of the savings on their household energy bills.

However, MPs on the Public Accounts Committee have criticised the scheme – which ended last year – as ‘wildly optimistic’ with just £50m in loans taken out by just 14,000 households – an ‘abysmal’ take-up rate compared to the £1.1bn in loans that the government had anticipated.

“Householders were not persuaded that energy efficiency measures were worth paying for through the Green Deal and take-up of loans was abysmal,” according to the MPs; not least because the scheme was far too complex and bureaucratic.  However, the killer blow to the scheme was the extortionate rate of interest – up to 10 percent – at a time when the Bank of England rate was just 0.5 percent.

The MPs were particularly critical of the government’s failure either to learn the lessons from similar schemes overseas, or to run small scale trials of the scheme before rolling it out in the UK.  The result is that total government spending on the scheme (both loans and administration) was around £240m with little evidence for improved household energy efficiency or a reduction in fuel poverty.

As the cost of energy increases, alongside the need to shift to a low carbon economy, the truth is that we can no longer afford this kind of waste.  It is essential that what remaining money government still has is focused on schemes and technologies that provide the largest possible energy generation or energy saving.  In a future of increasingly expensive energy, scarcer resources, and a lack of funding, government’s remaining capital must be focused solely upon evidence-based projects and technologies that are proven to work.

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