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Green building

Green Deal – Comments from the Carbon Trust

23 November 2011

Carbon Trust response to news on the Green Deal

The Green Deal could help overcome one of the key obstacles to improving the energy efficiency of homes and non-domestic buildings by providing upfront finance. However households and organisations need to be more strongly incentivised to take up the Green Deal offer. Among the options the Government should consider are discounts on business rates for improved energy efficiency, extending the proposed ban on F and G-rated buildings to cover owner-occupiers, and extending Display Energy Certificates to all large commercial properties in order to create transparency of building energy efficiency. Incentives such as these will be essential if the Green Deal is to realise its full potential.

Eric Lounsbury, Strategy Manager at the Carbon Trust

We welcome the Government's plans to make UK business more energy efficient. However, businesses do not need to wait until the Green Deal is finalised in autumn 2012 to improve energy efficiency and slash their energy costs. We recently launched a new service with no upfront cost for organisations looking to install new green equipment to help them reduce their energy spend, and improve efficiencies. Businesses that invest and replace old, energy wasting equipment with new energy efficient kit can achieve good paybacks, often within one to three years.

Myles McCarthy, Managing Director at Carbon Trust Implementation Services

Background

The Green Deal has the potential to help households and small organisations, its key focus markets, to overcome one of the main obstacles to improving energy efficiency - the need for upfront finance.

However, finance has only ever been one of many obstacles to the take-up of energy efficiency measures. Even when home insulation has been given away, many households have not been interested. To ensure that the Green Deal is a success, households and organisations need stronger incentives that will stimulate their interest in implementing energy efficiency measures and taking up the Green Deal offer.

We welcome the fact that the Government is considering incentives such as discounts on Council Tax and Stamp Duty for households that improve the energy performance of their homes, as well as a ban on private landlords renting out homes and commercial properties below an E Energy Performance Certificate (EPC) rating from 2018. Further measures are needed, however, and among the options the Government should consider are the following:

  • Discounts on business rates or empty property tax waivers for organisations that improve the energy efficiency of their properties
  • Extend the ban on F- and G-rated buildings to cover owner-occupied properties, which make up the majority of UK households and a significant share of non-domestic buildings. To successfully enact this policy, carefully designed exemptions need to be developed to ensure that the ban treats properties that have taken action to improve energy efficiency fairly while also maintaining the strength of the policy.
  • We have long supported an extension of Display Energy Certificates (DECs) to all large commercial buildings, a policy that would make the energy and carbon performance of non-domestic buildings transparent across the market. This policy has broad industry support but has not been taken up in the recent Energy Bill.
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