Think Tank Calls For Help To Heat Insulation Scheme

27 November 2013

The Energy Company Obligation and Green Deal are ineffective and should undergo reform that would better improve the energy efficiency of Britain’s housing stock and offer free insulation to more people.

That’s the verdict of a report from the Institute for Public Policy Research (IPPR).

The think tank passed its verdict ahead of the Chancellor of the Exchequer’s upcoming Autumn Statement, which could see the two energy efficiency schemes watered down after a slow uptake.

In its most recent report, the Government confirmed that just 219 Green Deal plans are live, with another 594 pending. That figure is grossly below the 130,000 deals that had initially been set as a goal.

But IPPR doesn’t want to see the number of energy efficient improvements reduced though.

Reg Platt, senior research fellow at IPPR, said: "The way to bring down energy bills is through more energy efficiency, not less.

“The Green Deal could unlock huge bill savings for consumers but is simply too expensive. What good comes from having competitively priced loans for which there is no demand? If people are going to take out a Green Deal, it needs to be a great deal and not just a good deal.”

At present time, the Green Deal – which was launched in January – provides a loan to householders looking to make energy efficient home improvements, such as Cavity Wall Insulation and Loft Insulation. The average rate of interest is in the region of 8%.

IPPR is calling for that figure to be reduced by at least 5%, which it claims would save loan-payers around £57 per year on interest payments.

The think tank is also calling for a number of interest-free loans to be offered to the nation’s poorest households, saving them £136 per year. The funding for what is being referred to as the ‘Help To Heat’ scheme would come from the Government rebooting the current scheme to focus more on less expensive measures, including Loft Insulation and Solid Wall Insulation.

Home insulation remains the key to improving the energy efficiency of the country. Consumer watchdog Which? estimates that 14 million homes are still under-insulated, with 7 million able to benefit from Solid Wall Insulation, 7 million from Loft Insulation, and 5 million from Cavity Wall Insulation.

The Energy Company Obligation – which provides grants for low-income households – has seen more than 300,000 measures installed since launching in January, and is considered by many to have been a success. However, IPPR claims that only 20% of the funding has been used for those suffering fuel poverty and is calling for this to increase to 80%.

"Some energy companies want the Government to cut ECO,” Platt said. “But this would be hugely detrimental for vulnerable people and should be resisted."

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