British Green Deal to boost investment in energy efficiency of buildings

energy consumption, electrical efficiency, investment, agreementA quarter of greenhouse-gas emissions in the UK are due to private heating. For instance, 75% of the energy consumed by households is used to heat rooms and water with a boiler. This, according to the Department of Energy and Climate Change (DECC), accounts for 13% of the country’s CO2 emissions, while the heating of buildings of the tertiary sector represents 20%. In order to meet the goals of the 2008 Climate Change Act, the UK must cut household emissions by 29% and office space-related emissions by 13% by 2022, compared with 1990 emission levels. In order to stick to the implementation schedule, the government adopted a “Green Deal”, a piece of legislation aiming at improving the energy efficiency of private buildings and developing low-carbon energy sources.

How does it work?

From January 1st, 2013 onwards, zero-rate loans of maximum £ 10,000 will be offered to help households willing to undertake energy efficiency works. In order to determine which works are best fitting, an energy expert may be commissioned to carry out an audit and draw up a cost estimate. Once the loan agreement is signed, the cost of the works (thermal insulation, geothermal power installations, solar panels, home automation equipment) will be registered in and paid back via the household’s energy bill. If the tenant relocates, the cost of the works will remain attached to the home’s energy bill and will thus be passed on to the next tenant. Such eco-loans must abide by a double golden rule: energy savings must outweigh the loan’s overall sum and, parallel to that, the time necessary to pay off the investment must be shorter than the term of the loan.

Many advantages hoped for not only in terms of energy efficiency

The DECC forecasts that the Green Deal will cut global household energy bills by 7% while creating 65,000 jobs in the thermal insulation, electrical efficiency and construction sectors by 2015. This policy particularly targets gas or oil-heated homes in rural areas. The government expects an initial investment of 200 million pounds to launch the programme; this is hoped to add up to a ten-year investment of 14 billion pounds.

Underlying this ambitious programme is the fact that it is financially attractive to households. According to the NGO Energy Saving Trust, the external wall insulation (EWI) or internal wall insulation (IWI) of a five-person household could save respectively £445 and £475 yearly. A study conducted by the website thinkinsulation.com showed that one in three British landlords is interested in the Green Deal.

Question marks remain

A few elected representatives blame the programme for its potential administrative difficulties. Charles Phillips, the Green Deal deputy director, retorts that it is not only the government’s duty to inform users. The sector’s companies are also responsible for promoting the programme. Brian Smithers, Business Development director of Rexel UK, stresses that “it’s down to us, as an industry, to work together and ensure that all the relevant information is easily accessible for households and businesses alike.” (Builders’ Merchant news, 10-23-2012)

12 British cities (among which Birmingham, Bristol, Leeds, Manchester, Newcastle, Nottingham and Sheffield) are already about to be granted an overall 12 million pounds to launch the Green Deal in their urban areas, in order for them to conduct the first large-scale experiment on the project. “These cities have really ambitious plans to lower their [CO2, ed] emissions, reduce energy use and help people save money on their bills. I’ve been really impressed by their plans to start testing the Green Deal and transforming our homes and buildings.”, said Energy Secretary Edward Davey.

For instance, these municipalities will have to improve energy efficiency and develop home automation in about 2,500 households and public buildings. They also plan to create green reference houses, as well as organize awareness days in order to educate people on day-to-day actions that can be taken to lower energy consumption.

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