£200 Million Available to Those Who Take up Green Deal in the First Year

It’s not the first time we have discussed possible issues with the UK Green Deal scheme and as the pressure rises, others are speaking out about their concerns. Many businesses and government speakers, including Greg Barker,  have expressed concern that the scheme does not offer UK home owners enough of an incentive to inspire participation. In addition, it is widely thought that the long term success of the Green Deal relies heavily on the experience of early adopters, who they hope will promote the benefits of getting involved in the Green Deal, to other home owners. Without a smooth roll out and without people recommending the scheme to friends and peers,  the Green Deal will never build up enough momentum to reach it’s target of improving the energy efficiency of some 14 million homes.

An initial reward was suggested, which would offer Green Deal participants a £150 rebate upon adopting the scheme. However, this has been disregarded by many as it is not considered to offer enough of an incentive to British home owners, especially considering that it would later be added to the loan and have to be paid back in full. And what does £150 buy you in 2012? Not an awful lot that’s for sure!

Realising that £150 was not such an incredible incentive and with such great pressure placed on the initial launch of the Green Deal, the government have looked closer at what can be done to encourage and inspire people to take up the Green Deal. Danny Alexander, the Chief Secretary to the Treasury, has approved £200m which will be used to reward early adopters of the scheme. The move has been encouraged by business owners and politicians who have an interest in the success of the Green Deal.

The £200m will not necessarily be paid in the form of “cash” but could be used to create a reduction in council tax rates or other taxes such as stamp duty for the first people to get involved in the Green Deal. The only problem is, what happens once the £200m is used up and people are not incentivised? Will they still take on board the advice of the earlier adopters or will they resent the fact that they are not benefiting as much as they could have?

Also, when  you look at the scale of the government’s plans, it becomes clear that £200m isn’t very much money in relative terms. Will it be enough to get people involved or will it be laughed off like the initial promise of a £150 payout?

What is important is that the government make it easy to understand how to get involved in the Green Deal and remember the other barriers, apart from money. Removing issues such as the “hassle factor” and making things simple enough to understand will more than likely encourage people to participate.

Education will be key here and people need to be able to see long-term benefits from participating, not only financially, but also environmentally. Perhaps they won’t focus too much on the initial incentives if they truly understand the bigger picture. After all, the Green Deal is a long-term strategy with the aim of reducing UK emissions, not about short term financial gains. Whichever way the government plan to use the £200m, one thing is for sure; Their ambitious target of improving 14 million properties will be difficult, with or without incentives.