Which? is calling on the Government to radically overhaul the Green Deal to ensure its doesn’t lead to "huge hikes" in energy bills and consumers are adequately protected.
The independent organisation, which campaigns on consumer interest
issues, says it is worried that the savings on energy bills
promised to householders through the Green Deal
won’t materialise and that consumers could also end being sold products that are not covered by the energy efficiency
The Green Deal, which will launch to domestic customers on October 1, will fund energy efficiency
measures, including insulation, heating and lighting, to Britain’s homes and small businesses. It will be funded through loans to householders, private landlords and small business owners who want to make improvements and cut their energy bills.
Central to it is the 'Golden Rule’, whereby the instalment payment for the energy saving measures should not exceed the projected associated cost savings on an average energy bill for the duration of the Green Deal finance arrangement, which could be for as long as 25 years.
No guarantee on Golden Rule
Which?’s main concern is that the amount a Green Deal company can lend a consumer won't be calculated taking into account their actual energy use, but instead will be based on average figures.
It says that despite the 'Golden Rule', no one is guaranteeing that consumers will not end up paying back more in their regular payments than they end up saving on their bill from using less energy – and there is no redress if consumers end up paying more than they save.
Which? is also concerned that firms providing the Green Deal could be incentivised to sell home improvement measures, some of which may not be covered by the Green Deal.
"It's right that people are incentivised to be more energy efficient and we welcome help for people to install energy saving measures in their home. But the Green Deal needs to be a good deal for the consumer at the same time," Which? executive director Richard Lloyd said. "There must be fairer terms of finance, stronger protection on sales and marketing practices and more accurate savings estimates.
"Too many of the Government's policies won’t be effective at reducing energy consumption and instead are likely to lead to huge hikes in energy bills for consumers. People are already struggling with their household bills so they simply cannot be expected to pick up the tab for ill-thought out policies
that won't work."Which? recommendations
Which? is calling on the Government to introduce measures to ensure Green Deal savings are tailored to people’s actual energy use and that the scheme is not " a licence to mis-sell" . It also wants consumers to receive Green Deal quotes that are "clear and comparable" and that they are not penalized harshly if they repay their Green Deal loan early. The consumer group is also requesting that the Energy Company Obligation (ECO), which will be launched alongside the Green Deal and will be used subsidise low income and hard to insulate homes, is fair to all and cost effective for consumers.
Responding to the Which? claims, a spokesperson for the Department of Energy and Climate Change, said Which? had got it wrong.
"The concerns raised by Which? demonstrate a misunderstanding of the proposals. Ministers are happy to discuss these issues with Which? but have yet to receive a request for a meeting. Protecting consumers is a priority as we develop Green Deal policy. From the very start the Green Deal will be governed by the highest standards to make sure customers can trust what they are getting."
A spokersperson for Which? told GreenWise that it wasn't true that it was not engaging with Government on the Green Deal.
"We have consistently engaged with Government on this issue, including with Downing Street and the Department for Energy and Climate Change (DECC) amongst others. We have requested a meeting with the Energy Secretary on numerous occasions including twice in writing and would very much welcome the opportunity to discuss this matter further," she said.
This story was updated with Which?'s response to DECC's claim it has not sought to speak to it on May 22.
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