This week I went to a Green Monday event, held in the offices of Merrill Lynch, the theme of this well attended evening was ‘The Energy Bill – The Green Deal’. This Bill is due to go before parliament by the end of this year, but is still in its formative stages.
We heard from Patrick Erwin, who is leading the DECC team behind this legislation. The principle sounded good. The government are devising a scheme to encourage householders to reduce energy bills in their homes. And the idea is to help people pay for energy efficiency improvements, such as insulation and draft-proofing, in the form of a loan, which is then repaid through energy bills. And the expectation is that the resulting savings in household energy bills will more than off-set the cost of the loan.
I have two major concerns about this. And I managed to ask the panel, which included Mathew Sexton from B&Q, their views on one of them. I explained that a carbon consultant I’ve met told me that solar PV panels made in the coal economy of China could take as long as 25 years to pay back the carbon footprint of manufacture and export, by which time the equipment would almost certainly be redundant. The question I asked is ‘whether the government have actually looked at the life cycle carbon impact of the energy-saving measures they’re planning to fund?’.
The answer was a little worrying. They haven’t. But, I was told that the Green Deal is not just about carbon emissions, it’s about fuel poverty too. So, apparently, even if householders are just saving themselves money and being made more comfortable, the government will have achieved some of their objectives. I’m not convinced. I’m sure these other objectives could be more effectively achieved by targeting vulnerable groups, rather than with a scheme open to the whole UK population.
My other concern is about consumer behaviour. The Green Deal has to be simple. And it will have to communicate its benefits. So the core messages have to be that signing up will be easy and cost effective – and will require very little effort.
It’s the last part of this that’s the tricky bit. Simply put, if people are really going to reduce their energy bills, it will require real changes to their behaviour – and even some compromise in comforts. Having signed up to the Green Deal, many people may feel justified in wasting more energy than before. For example they might feel entitled to walk around their houses in the middle of winter clad in a t-shirt, or have gushing hot water available 24 hours a day, or perhaps leaving their electrical equipment on stand-by. If so, they could be both horrified and amazed that their bills are not actually coming down – they may even go up.
The table I sat on discussed the communications challenge of the bill. We agreed that encouraging consumers to change their behaviour must be integral to the messages about the Green Deal. But, more importantly, we came up with a simplified approach to the initiative. This addresses my concerns about the life cycle carbon footprint, as well as consumer confusion on what energy efficiency measures actually make sense.
Our idea is that the Government should commission research into the top 10 or 20 cost-effective, energy saving measures in homes. The Green Deal would then offer loans only on these products.
This would mean that we could be confident that any products offered as part of the Green Deal would actually reduce carbon emissions, promote energy efficiency and have the potential to reduce householders fuel bills. It would also make the offering much simpler for the public and ensure that the Green Deal is a Good Deal for all….