The consultation on the final shape of the Green Deal (… and ECO) is coming to an end. And fair play to DECC on this one: this isn’t a consultation that follows the decisions themselves as we saw recently with the PV FITs consultation. This time they really do seem to want to get some views in on how best to deploy Green Deal (… and ECO). Indeed, I had the experience last week, along with a few other interested MPs of going along to a mini-Parliamentary consultation with the minister and a full set of senior DECC hands on precisely this subject.
The problem with many such consultations, though, is that they are only as good as the structure that frames the scope of the consultation. And here as I’ve posted on a number of occasions, there are I think a number of structural problems with ECO in particular that may well make the best consultation only very marginally effective (and I don’t think they are near to resolving the problem of interest charges on Green Deal, by the way).
I posted a while ago (here) on the amount that is now confirmed as being available annually in the ECO coffers to deal with one of the central tasks of the obligation, namely to get the seven million or so solid wall ‘hard –to-treat’ homes externally insulated and energy efficient in the foreseeable future. I calculated that the sum of less than a billion pounds annually that is available will, even if it is well invested and solid wall insulation really takes off, fall woefully short of even the relatively modest target of insulating 2.2 million homes that the Climate Change Committee sets for the middle 2020s.
All very well to be a critic, I hear you say, but what would you do? After all, these are hard times. What I think I would do is (at the risk of restructuring ECO somewhat) go down the route of funding the bulk of hard-to-treat homes where the owner could reasonably afford improvements through the issuing of ECO-mortgages. This would enable an entirely new area of funding to be accessed, and would, in principle allow the presently allocated level of ECO to go much further. It might also mean that more resources could be put towards ‘affordable warmth’ and countering fuel poverty through ECO than is presently envisaged. The riposte to this, I imagine would be similar to that levied at elements of the Green Deal programme itself: what’s the incentive to do it? After all, you can save perhaps £350-400 per annum in heating bills with a well insulated home. But to do that costs perhaps £8500 – a gap of perhaps £150 per month between money saved and the cost of servicing a mortgage, albeit on better financial terms than the Green Deal. My answer would be to introduce an ‘ECO golden rule:’ if it costs more to service a mortgage than is saved on fuel bills then the difference – for perhaps ten years of the mortgage – would be paid by ECO. Doing that, it can relatively easily be demonstrated, would allow presently known ECO funds to go much further – perhaps eight ‘treatments’ for each one presently envisaged. I’ve attempted to set all these considerations out in more detail in a paper I produced recently on the subject: you can find it on my website here: Hard to Treat Homes and ECO Mortgages.
I think this can work, albeit at a cost of doing a little more than is customary in consultations. But it would not cost any more public money, and maybe, just maybe, could enable us to reach a target for once, rather than fall miserably short of it. And then there’s all that carbon saving to be banked as well… I’m quite warming to the idea, if that is the right phrase.