Interest free is the key to rebooting the government scheme
However laudable its aims, it's hard not to conclude that the government's flagship energy efficiency programme – the green deal – has become something of a shambles.
Years in the planning, it promised householders long-term loans to upgrade hard-to-treat homes, with the repayments being more than covered by the property's lower energy bills.
A fine idea, you might think, but five months into the hugely expensive programme, not a single household has had the energy efficiency measures installed, and details of the repayments passed on to the energy supplier.
Data shows that 38,259 assessments have been carried out, resulting in just 245 plans being put in place – an embarrassingly low number that tells you everything you need to know.
Behind the scenes the project has been mired in IT and other (legal) delays and, most depressingly for those who have trained as assessors, very few consumers know anything about it.
Tellingly, of the "big six" energy firms, just British Gas has fully launched the programme. The rest, sensing expensive difficulties, have quite reasonably sat on their hands to see what happens.
Is the green deal set to become a future case study on how not to implement government policy – another "home information pack"-style scheme to be quietly dropped by an incoming administration? Some might say it looks that way.
When the green deal was unveiled last autumn the omens were not good. Getting detailed information out of the Department of Energy & Climate Change proved hard work, and little has changed.
At its heart, we were told, was the "golden rule" – that the energy savings made had to exceed the loan repayments. Homeowners would borrow the £10,000 or so to install solid wall insulation, with the repayments automatically added to their electricity bill. If you moved house before the loan was paid off, the new owner would take over the repayments. It was complicated, but not impossible.
However, the killer blow for many was the decision to set the interest rate at around 6.9%. It meant that, apart from a few exceptions, for most people the figures didn't add up.
Despite this, the government – even in these times of austerity – has thrown £100m at the project, including offering cashback sweeteners to entice a few early adopters.
Although it's early days, what appears to have been happening is that middle-class householders have been grabbing the cashback, but sensibly funding the energy-efficiency measurers themselves – hardly the intended outcome.
At a recent round table at the Guardian's offices to discuss the measure, the minister responsible, Greg Barker, was sounding upbeat, dismissing the teething problems. When we pointed out that the figures didn't add up, he accused us of misleading readers.
Grants that will allow borrowers to meet the golden rule are available, officials told us after the event. If that's the case, where are they, and how do you get them? Sitting here today, I have no idea.
Don't misunderstand me, I'm all in favour of anything that improves the UK's notoriously energy-inefficient housing stock; however, this scheme, in its current form, will not manage that important task.
It is interesting that construction companies, led by the Green Building Council, recently wrote to ministers asking for a cross-party consensus to salvage and improve the green deal. They have suggested offering stamp duty or council tax discounts for households taking up green deal offers. That might work, but I'd do something simpler. By offering green deal loans interest-free, you'd kick-start the scheme overnight.
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