The Green Deal: Sustainability suspended
There have been lots of predictions for 2012 and few, if any, deliver any sense of optimism. Casting my mind back, I recall that this time last year we had hoped for good things to come in the area of sustainable construction.
Out of the new coalition, with its Liberal Democrat green credentials, eventually arrived the Green Construction Board. Unfortunately, perhaps due to its late formation, we did not see much progress in 2011, and to be frank after reading the coverage in this magazine last week I believe that there is depressingly little desire at the top of government to make much happen this year either.
To be frank, I believe that there is depressingly little desire at the top of government to make much happen this year
I am not blaming the Green Construction Board. I applied to join their ranks myself last summer. I too was swept along with the apparent enthusiasm of ministerial advisers with high ideals, but seemingly low authority. There are some good people on the board, although I note it still lacks a professional working cost manager. The problem lies much further up the ministerial food chain. I think the mindset in the Treasury regarding sustainability issues in our sector is less towards supporting a new Green Construction Board and more epitomised by an attitude that says “Green Construction …? Bored!”
I am sure others share this view. I recently had a chat with Jonathon Porritt, one-time chair of the Green Party, as well as being a non-executive director of contractor Willmott Dixon. A man who you would imagine knows a few things about sustainability, the green agenda and its impact on construction. He confided that he would have been happy to assist the Green Construction Board, had he been asked. Other eco celebrities spring to mind, such as Tim Smit from the Eden Project in Cornwall or David Attenborough. Surely it would have been sensible for Her Majesty’s government to employ some of these high-profile green opinion formers to help shape policy for one of its most significant industrial sectors. Without the involvement of big names to help to create impetus, as well as headlines, some might see the “green” board as nothing more than a red herring.
However I suspect that no one wants to upset the chancellor, who has moved eco issues to the bottom of his wish list. At the last Conservative party conference, George Osborne declared defiantly that “we are not going to save the planet by putting our country out of business”. After this declaration, the U-turns kicked in faster than a ride at Alton Towers.
The mandatory introduction of display energy certificates all but disappeared and is now “under review”. The shock cut in feed-in tariffs immediately meant 4,500 employees at Carillion’s solar division had a miserable and worrying Christmas, having been put on notice. There are now grim predictions for the future of other contractors in this sector.
Without the involvement of big names to help to create impetus, as well as headlines, some might see the ‘green’ board as nothing more than a red herring
Then at the end of last year we had the release of the Green Deal, through which the government wants to reduce utility bills and cut emissions at no cost to itself. It was a 238-page paper, had £14bn worth of proposals and was soon backed by an apparent £200m of investment and incentives. The plan wants to encourage private companies to meet the cost of up-front activity to make homes more energy efficient and reduce their carbon footprint. All sounds good, but the support has been muted at best.
I have yet to see a definitive reaction from the Green Construction Board to these proposals and I am not sure as to its level of input into the Green Deal. Perhaps it is not in its purview to do either. If it was not consulted, perhaps it should have been.
For not everyone is impressed with the Green Deal, and other plans affecting things such as improvements in loft and cavity wall insulation. The year closed with the chair of the Climate Change Committee, Lord Turner, criticising the government for the lack of ambition in its use of limited funds. Furthermore, conservationists such as the Institute of Historic Building Conservation point out that the new proposals for enhanced insulation won’t work in a good deal of the UK’s older housing stock and may in fact be harmful. It reportedly describes the Green Deal as “seriously flawed”.
It may be that 2012 is the year our industry is feted for its work on the Olympics, but somehow I don’t think it will be allowed to even approach the starting blocks in the race for global eco supremacy.
Richard Steer is chairman of Gleeds Worldwide
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Readers' comments (3)
I believe Mr Steer is absolutely correct in regard to his concerns about enthusiasm towards the Green Deal. In principle the ‘Green Deal’ is a very exciting and positive scheme that should be supported and encouraged, however there are still some key concerns that need to be addressed if the scheme is to be the success it could be.
The ‘Green Deal’ is a framework to enable private firms to offer consumers energy efficiency improvements for their homes, community spaces and businesses at no upfront cost, and recoup payments through ongoing charges on energy bills.
The financing mechanism allows consumers to pay back through their energy bills. This means consumers will offset the ‘Green Deal’ cost against the savings in energy use and therefore savings on their bill. It also means that if they move out and cease to be the bill-payer at that property, the financial obligation doesn’t move with them but moves to the next bill payer of the property in question. The charge is only paid whilst the benefits are enjoyed.
There are a number of important consumer protections which will be embedded into the Green Deal. The most important of these are:
1. The expected financial savings must be equal to or greater than the costs attached to the energy bill. This is known as “the golden rule” of the Green Deal.
2. The measures must be approved and the claimed bill savings must be those accredited through this process.
3. The measures installed must have been recommended for that property by an accredited, objective adviser who has carried out an assessment.
Whilst the ‘Green Deal’ is arguably the most proactive piece of domestic green legislation to date, there are some key concerns:
1. Large providers (energy companies and contractors) will provide assessments free of charge or at a low rate such that truly independent specialists cannot compete. Therefore any claims that this new scheme will result in mass new employment and or the opportunity for Surveyors and Architects to diversify should be taken with a large pinch of salt.
2. With nearly all assessments being completed by representatives of accredited ‘Green Deal’ providers and/or installers (as is predicted), there is a very real concern that this will result in a lack of independent/impartial advice to the consumer. There may be huge pressure for assessors who are employed by accredited ‘Green Deal’ providers to promote products and or measures that will be most profitable for the installer (and/or provider) and not those that are necessarily the best or most cost effective for the consumer.
3. With companies competing to provide the initial assessments to the consumer as cheaply as possible (or even free of charge) there is a risk that the quality of the assessments may suffer, and a ‘one size fits all’ approach is adopted by many assessors.
4. There may also be a huge difference between the final performance of an upgraded home and the initial predictions, with many homes not seeing the energy bill savings predicted.
5. Customers will not sign up if the interest rate is too high or the repayment system too complex.
Richard Lloyd, executive director, ‘Which?’ is quoted as saying:
“Unless people are offered a good deal that they can trust and understand, it’s difficult to imagine them flocking to take up Green Deal measures. They won’t if the interest rate is too high or the predicted energy bill savings don’t materialise. The government’s latest consultation does little to put our minds at rest, as the energy department’s own consumer research found that only a small number of people expressed a strong interest and many felt the annual cost savings were simply too small to make it worth their while... We want assessments that are personalised, accurate and genuinely impartial”
Jonathan Braddick
jb@riba.co
www.architectdevon.com
Is #4 in your list a real concern? If I buy a car that's marketing as being able to deliver 48mpg, I do not get upset when it only delivers 32mpg. Instead, I accept that there's a difference between how the mpg test was carried out and how I drive the car on real roads. I don't go back to my car finance company and expect a refund on the extra-over fuel bill.
Hi Carol
I think point 4 is a real concern. If there is a huge difference between the final performance of an upgraded home and the initial predictions, with many homes not seeing the energy bill savings predicted, it would break the 'golden rule' of the Green Deal that says to consumers that they would never pay more per month on the loan than the amount saved on their energy bills.
Richard Lloyd has been quoted as saying:
“The Golden Rule was supposed to reassure people that Green Deal repayments would not exceed the savings made on energy bills. But if this is based on average figures then it could be meaningless for many.”
If this concern is not addressed it may result in little uptake of the Green Deal or worse, result in those people, who live in the oldest and least insulated housing stock, and who are therefore hardest hit by the rise in fuel prices and face real fuel poverty, being effectively miss-sold a loan that they cannot afford to repay.
Jonathan Braddick