5 reasons why the Green Deal won’t fail

Date: 6th Mar 2012   By: ciaran   Comments 4

Success and the Green Deal

There has been a lot of speculation recently about the Green Deal and weather or not it will succeed? Here are some of the reasons why we think the Green Deal will succeed.

1. No Up Front Costs

This is a huge reason why people don’t go out and do things on there own initiative. Up front cash, who has £10,000 just burning a hole in their pocket? More importantly who has something else they would prefer to spend their 10k on? Loft insulation is not on the top ten list of most desirable objects and it never will be. The austerity of the times means that people don’t have huge savings that they are willing to spend on home improvements. Removing the upfront costs is a huge swing factor.

2. Rising Cost of Energy Bills

The average cost of heating and light a home in the UK at the moment is around £1300 per year, depending on the size of the house and how you pay this figure is pretty accurate at the time of writing.

The UK is subject to the global market when it comes to energy prices and the cost of extracting fossil fuels continues to increase while the average household income is actually falling in real terms. Energy bills have risen by over 100% in the past ten years and that trend is looking like it will continue for the next ten years.

That is a staggering increase and anyone who wants to protect themselves from future rises will be looking to the Green Deal as an option. If you can move some of your energy production to micro generation you will be inline for some handsome savings in the longer term.

3. Jobs

Unemployment is a dirty word in the cabinet and big Government schemes are a good way to stimulate the job market. The Green Deal is expected to generate up to 65 thousand jobs and what politician can resist saying that they were responsible for creating those jobs? The Olympics is coming to the end of it’s job creation cycle and so the Government has approved both cross rail and the new HS2 rail link which will be the big construction projects to trumpet. The Green deal is being touted as another big job creation scheme that ministers can promote.

4. Goldman Sachs

The way the finance is going to work in the Green Deal is to have private banks and financial institutes fronting the large sums of money that are going to be involved. We looked at the list of investment firms and decided to highlight Goldman Sachs for a couple of reasons. This investment firm is not known for backing failing enterprises, they will not be investing so heavily into something that they do not think will be a success, in fact they would not even give it a second glance if they thought it would fail. The investment firms have had ample opportunity to look at the inner workings of the Green Deals financing structure and they seem happy with the structure.

The Green deal is looking for £14 Billion from the private sector and in today’s money markets that’s going to be difficult sum to raise but if firms like Goldman Sachs and Price Waterhouse Coopers think they can make money then there is hope that the initiative as a whole will succeed.

5. The Law

By April 2018 it will be unlawful to rent out a property that has an EPC rating of E or below. This means that the Government will be able to say you can only have access to Green Deal money if your property is properly insulated. They could bring that date forward depending on the success of the initiative as they did with lowering the Feed In Tariff recently. (although lets all hope that the Government has learnt that painful lesson!)

By saying to landlords that your business premises and domestic properties must be up to standard or you can’t rent them out is a big stick of incentive to getting things moving.

Hopefully this article has highlighted some of the reasons to be optimistic about the Green Deal, we know that large Government initiatives a filled with doubt and scorn but maybe just maybe this might be a success.

If you have an opinion we would love to hear from you, please leave it in the comments box below.

 

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4 Responses to 5 reasons why the Green Deal won’t fail

  1. Piere says:
    March 7, 2012 at 5:02 pm

    Looking at it another way….
    1) No up front costs = GET INTO MORE DEBT
    2) Rising cost of energy = ENERGY COMPANIES HAVE TOO MUCH INFLUENCE AND PROFIT
    3) Jobs = JUST LIKE THE 35000 SOLAR JOBS ABOUT TO GO DOWN THE DRAIN-SHORT TERM EMPLOYMENT UNTIL THE GOVERNMENT CHANGE THE RULES AGAIN
    4) Goldman Sachs = NO ONE ELSE WOULD TOUCH IT WITH A BARGE POLE
    5) the Law = RECENT EVIDENCE SHOWS THE GOVERNMENT IGNORES THE LAW EVEN WHEN IT CLEARLY IS IN THE WRONG

  2. Loft Insulation says:
    March 8, 2012 at 8:06 am

    I know this site provides quality based posts and additional data, is there any other web page which presents these kinds of stuff in quality?

  3. Gerry says:
    March 8, 2012 at 12:20 pm

    I am gagging for the green deal to start.

    However, as recently as Tuesday and not for the first time I have tried and failed to start discussions with a green dealer about external solid wall insulation.

    I’ve done all the other stuff, as anyone sensibly considering their energy bills would do without need for a government programme.

    However, I cannot build my own supply chain for a one-off job.
    My energy supplier has prevaricated twice claiming on one of the two occasions that they are not geared up for individual installs. I’m still waiting for the return call from one of the industry trade associations.

    A rep in a supermarket backed off rapidly when I didn’t want lightbulbs or a PV installation.

    For many of the reasons cited in the article, large organizations will need to do the more awkward stuff an be able to build their own supply chains if necessary.

    But unless green dealers step up individuals are going to be limited to participating in the easy stuff.

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