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Citizens Advice response to BEIS Call for evidence on the Green Deal Framework

15 November 2017

Ful Response to BEIS Call for evidence on the Green Deal Framework [ 180 kb] 

Making homes more energy efficient can significantly reduce household energy bills and fuel poverty. It is also needed to meet our carbon targets without unnecessary costs. The issue is particularly urgent in the UK, where our housing stock is particularly cold and leaky, and bills higher than our European neighbours.

Pay-as-you-save (PAYS) schemes like the Green Deal could play a role in increasing uptake of energy efficiency improvements, but only if they are accompanied by other steps to increase consumer demand. Furthermore, consumers will only engage and invest if there is sufficient protection from misselling, poor quality work and other risks.

Due to the complexities of energy efficiency and low carbon measures, and the market that’s set up to promote them, strong checks and balances are needed to protect consumers. Our 2015 research on consumer protection for energy efficiency and renewables schemes included the Green Deal, and found the quality assurance framework was overly complex and didn’t guarantee high quality work. From calls to our consumer helpline we’ve seen the serious problems consumers can end up with as a result.

The Green Deal and equivalent PAYS schemes also bring more specific consumer protection challenges. The Green Deal is a complex product, which remains largely untested: also  consumers are likely to have limited understanding. Our the limited number of contacts to the Citizens Advice consumer service we see about the Green Deal suggest this could often the case.

Some of these issues should be addressed by the Each Home Counts review  of Consumer Advice, Protection, Standards and Enforcement for Energy Efficiency and Renewable Energy (See Dr Peter Bonfield, OBE, FREng, Each Home Counts An Independent Review of Consumer Advice, Protection, Standards and Enforcement for Energy Efficiency and Renewable Energy , December 2016). This was set out to raise standards across the home energy efficiency and renewables industry, in response to some of the problems faced by consumers  It is in the process of creating a single quality mark across the industry. If implemented effectively, this will provide the basis for greater consumer protection under the Green Deal and successor schemes. A single quality mark can provide a simpler and more effective framework for consumers and businesses than the current patchwork of scheme-specific protections.

Additional protections are required to cover issues specific to the pay-as-you-save scheme type, particularly given the risk of disconnection where the charge is attached to the bill. Most notably, the Golden Rule (that the energy savings a property makes in a 25 year period must be equal to or more than the cost of implementing the changes in the first place) is required as long as the loan is attached to the property. Getting rid of it would risk incoming residents finding their bills unaffordable. Protections are needed to prevent loans being taken out where they are unsuitable, particularly to households in fuel poverty or significant financial stress. Finally the complexity of the Green Deal or other PAYS schemes requires effective and coordinated messaging to all consumers.