The government’s detailed plans for the Green Deal, published in two announcements this week by Energy Secretary Ed Davey, boost consumer protection for Mr & Mrs Average with a new dedicated Green Deal Ombudsman and Investigation Service.
There was also welcome news for SMEs with the announcement that the government would absorb the costs associated with becoming certified and registered as a Green Deal installer or provider for the first two years of the scheme.
But the many industry voices who had called for additional incentives to boost Green Deal take up – such as a cut in Stamp Duty or VAT – have been left disappointed.
It was announced that the new organisation will be run by Ombudsman Services, which currently run Ofgem’s Energy Ombudsman Service. The move means that Green Deal Providers no longer have to offer an independent conciliation service, seen as a compliance burden and barrier to market entry.
The Ombudsman will investigate complaints and determine redress for consumers. Chief Ombudsman Lewis Shand Smith said: “The Green Deal is a new concept to householders. Consumers taking up the Green Deal can be confident that if something goes wrong they will have easy access to independent and effective redress.”
The government has also introduced measures which should extend the Green Deal to more low income households, and families in fuel poverty where the savings on energy bills are unlikely to meet the Golden Rule.
It has changed the rules on accessing the Energy Company Obligation, a subsidy from energy suppliers with more than 250 000 customers, which will raise £1.3bn a year. The ECO will now be extended to target loft, cavity wall or solid wall insulation for the bottom 15% of low income communities.
Government modelling estimates suggest that this could lead to the insulation of an extra 540,000 lofts and cavities by March 2015, which DECC says will also help the insulation sector transition from the current subsidised schemes.
The announcements set out further protection for Mr & Mrs Average, including details of the product warranties from Green Deal providers. They will also be able to choose from 45 Green Deal measures, an increase from 30, which DECC says will promote new technologies and innovation.
The Impact Assessment also published by DECC this week predicts that households will borrow £1.1bn to £1.3bn in Green Deal loans by 2015.
There were also more details on the Green Deal Registration and Oversight Body, which will be run for the next three years by Gemserv, with their partners REAL, the team that currently runs the Microgeneration Certification Scheme for DECC.
The oversight body will also monitor the Green Deal Code of Practice for installers, which sets out the consumer protection and product standards for the Green Deal. It will also carry out random checks of work, mystery shopping and carry out post installation visits to ensure that measures are performing correctly.
However, this week’s announcements did not include DECC’s plans for the £200m fund announced last November to encourage early uptake of the Green Deal.
Measures announced this week include:
- a new dedicated Green Deal Ombudsman service will be created, instead of integrating ombudsman services within the Financial Ombudsman Service and Energy Ombudsman Service.
- a new dedicated Green Deal Ombudsman service will be created, instead of integrating ombudsman services within the Financial Ombudsman Service and Energy Ombudsman Service.
- Green Deal Assessors will have to make clear to customers whether or not they are linked to Green Deal Providers, and if they are receiving commission
- restrictions on cold calling
- warranty requirements have been simplified, requiring providers to include a minimum 5 year warranty for all measures installed plus 10 years of cover for consequential building damage, the exceptions being solid wall insulation and cavity wall insulation which will require 25-years’ cover.
- The government will only allow fixed rate Green Deal plans, where the full repayment schedule will be visible to customers at the start of the plan
- registration of all Green Deal products will no longer be required but spot-checks for compliance will be undertaken.
