Ed Davey defends green deal interest rates

Ed Davey, the energy and climate change secretary, defended the government's green deal loan scheme on Tuesday, saying the interest rates of around 7% for householders to undertake energy efficiency works are not excessive.

The flagship scheme, launched in January, allows householders to repay long-term loans for installing up to 40 different energy saving technologies via their electricity bills. But it was widely criticised at its launch for failing to provide enough incentives for the householder and for being overly complex.

"I would not expect many people to apply for finance yet. It's a bit too early," said Davey. "I won't concede that loan costs are too high. You have to compare it with unsecured loan and not mortgages. This is a great deal," he told delegates at Ecobuild, a sustainable building show in London.

"We are not trying to pretend that we have everything right. There will be issues to address. We will be responsive to get rid of the niggles," he said.

Davey fuelled rumours that the scheme had been poorly taken up by the public, citing "legal reasons" for not disclosing how many households had so far asked for assessments on the energy efficiency of their homes or the number of people who had applied for loans.

"Our plan is to issue monthly reports starting this spring," he said.

Eight million homes need solid wall insulation, 6m could get more loft insulation."

"The relative cost of the loans is higher than most mortgages. People are challenged by the numbers. It adds fuel to their fears of taking up more debt. More credit checks are occurring. You can understand, but there's the creeping [idea] that this will make it harder for some householders to access finance. There is more room to be flexible and to bring costs down," he said.

The industry was divided on the initial take up. "It is delivering. Based on the feedback we have had, it has changed the nature of the conversation about energy efficiency," said Paul King, chief executive of the Green Building Council. "There is a very live discussion about the creation of a new industry with the potential of 26 million customers in the UK. It is possible to see an explosion of interest in a few years' time."


However, some small companies said they feared that green deal would undermine their businesses.

Stephen Bull, who runs a plumbing and heating firm with 2,000 customers in London, said that the green deal scheme was complex, expensive for small builders to take part in, and could undermine his business.

"We want to make sure we don't get left behind and I want to become an installer. But it seems to be a very much a top-down approach, set up by big business for big business. It seems only suitable for them. We could actually lose our clients to big multinational companies.

"In principle the idea is good and I want it to work. But even if I become a green deal installer, I would not necessarily get the work from my existing clients. I am struggling to understand it.full article
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Green Deal 1800 homes have been assessed

The scheme is meant to overhaul the UK’s inefficient housing stock. A month since the scheme officially launched on 28 January in England and Wales and 25 February in Scotland, the number could seem underwhelming for a scheme which is meant to revolutionise the whole country.

As the first Green Deal statistics were published by the Department of Energy and Climate Change, ministers defended the scheme for its role in driving a “promising new market”.

Energy Secretary Ed Davey declared he is confident that consumer interest “will grow and grow”.

Mr Davey said: “The number of businesses getting on board is increasing daily – highlighting the growing confidence that the Green Deal offers fantastic new opportunities. Forty firms are already authorised as providers, with a further 629 registered to carry out installations and 619 individuals registered to offer assessments. This underlines that the Green Deal is very much up and running.”

Campaigners expressed fears for the future of the scheme given the UK’s rising fuel bills.

Friends of the Earth said in a statement: “The Green Deal is heading for trouble without lower interest rates, more money to tackle fuel poverty and tough regulations on landlords renting out dangerously cold homes. 1,803 homes have been assessed, not actually insulated – it’s still early days, but the initial signs aren’t good.”
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The landlords who need to meet 'green' deadline

WEST Midlands landlords have been warned that they must go green under new laws or they won't be able to rent out their homes.

If they do not improve their properties' energy efficiency, says local energy expert Ron Fox, up to one in ten buy-to-let homes will be ineligible to be let in five years' time.
Ron, who runs Staffordshire-based green energy company Noreus, said that owners won't be allowed to rent out properties with the two lowest efficiency ratings of F and G under new laws coming into operation in April 2018.

Also, from 2016, landlords cannot refuse tenants' "reasonable" requests for green measures, such as improvements to insulation.

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British Gas profits boosted by colder weather ?

British Gas has reported a rise in profits for 2012 after colder weather led to people using more gas.

Profits from its residential energy supply arm rose 11% from a year earlier to £606m. It said gas consumption had risen by 12%.

But there has been some criticism that the company increased its prices in November when profits were rising.

Centrica, which owns British Gas, reported an adjusted operating profit of £2.7bn for 2012, up 14% from 2011.

Centrica chief executive Sam Laidlaw told the BBC that the firm's profit margins per household "actually went down", adding that the company had made just under £50 profit per customer household.

"A 5% margin on the business is the sort of margin we require" to make investments in new sources of energy, he added.

Centrica's dividends to shareholders have risen 6% and the company is also returning £500m to them.

Profits were up 16% to £312m at British Gas' residential services unit, which covers services such as boiler repairs.

Audrey Gallacher, the director of energy at Consumer Focus, said: "Perhaps we should not be surprised to see higher profits after a cold winter and with the prospect of significant investment in our energy infrastructure.

"But this announcement comes after more price rises last year, record numbers in fuel poverty and not long after the energy regulator warned of higher still energy prices for the foreseeable future," she added.



Cheapest tariff

British Gas raised its gas and electricity prices by 6% in November, which Mr Laidlaw stressed was "lower than any of our competitors".


All of the big six energy suppliers raised prices this winter, prompting Prime Minister David Cameron to step in and say he was going to force them to put customers on their cheapest tariffs.

Energy regulator Ofgem provided details of its plan last week, which will also limit the number of tariffs that suppliers can offer and force them to make bills clearer.



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