Friday, 24 July 2015

NIA Responds to the announcements made by Secretary of State Amber Rudd on 23rd July

Yesterday, Secretary of State Amber Rudd announced that there would be no further public funding to the Green Deal Finance Company, the Government would stop any future funding releases of the Green Deal Home Improvement Fund (GDHIF) and wanted to work with the industry and consumer groups on a new value-for-money approach.

Whilst it was widely recognised that the Green Deal and GDHIF could be improved upon, to put an end to both of them so abruptly without any warning or anything to replace them is a major issue and concern for both householders and the supply chain and will only add to the current hiatus in the energy efficiency market.

Recent figures published by DECC and Ofgem on the Energy Company Obligation showed that the energy companies have already made significant progress towards their targets for ECO2 (April 2015 - end March 2017) and that based on the installation rates in 2014/15 the target could be achieved one year early in Q1 2016. This is reflected in the major slowdown in ECO activity where just 29,000 measures were installed in April 2015, a 2 year low and compares to 51,000 measures in March 2015 and 58,000 in April 2014.

The Green Deal and GDHIF provided an important means of supplementing ECO activity so their removal is a major blow for both householders and industry - working to build on these frameworks rather than pulling the rug from under them would have been the best approach.

DECC are aiming to develop and establish a more stable, long-term, coherent framework for home energy efficiency, we welcome Amber Rudd’s announcement that she wants to work with industry in doing this and we look forward to contributing towards it.  However, the decision to pull Green Deal and GDHIF without first developing alternatives will seriously undermine consumer confidence and also the confidence of industry and its ability and willingness to support whatever replacement framework is developed.    

Therefore we would urge the Secretary of State to set out a clear timeline for the delivery of the proposed new framework as soon as possible to provide much needed clarity for consumers and the industry, whilst putting in place an urgent transitional mechanism to fill the void left by Green Deal and GDHIF and help address the current hiatus whilst the new framework is developed. 

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