Ministers had planned to introduce the Green Deal to both households and businesses in October, but the Department of Energy and Climate Change (DECC) is now looking at a phased introduction of the Government’s flagship energy efficiency programme.
A spokesperson for DECC told GreenWise the Green Deal for business was being delayed due to the complexity of the non-domestic market. “It’s really complex and we want to get it right,” she said.
But she said the non-domestic Green Deal introduction would follow closely behind the household launch. “We are looking at when to launch the business side of the Green Deal. We don’t know when that will be yet, but the business launch will not be far apart from the domestic,” she said.
The decision by DECC follows calls by some business quarters to re-think the launch of the non-domestic Green Deal and news that Ministers and the big energy firms are considering options on how to implement a scaled-back Green Deal launch for the domestic market.
But the delay means businesses and landlords will have to wait longer to invest in energy efficiency improvements at no upfront cost at a time when they are seeing their annual energy costs rise by double-digit percentage points.
Nevertheless, some business groups today welcomed the move by the Government.
“If it is true the Government plans to implement a staged introduction of the Green Deal then we would welcome this decision,” Stephen O’Hara, chairman of the Property and Energy Professionals Association (PEPA) said. “While its plans for domestic buildings are well advanced and appear on track for the planned October introduction, it has been clear for some time that plans for non-domestic buildings require further clarification and exploration.”
PEPA, which counts the Chartered Institute of Building Services Engineers (CIBSE) and the Building Research Establishment (BRE) among its members, has been lobbying for a phased introduction to the Green Deal. It says the scheme has yet to address a number of key issues relating to the non-domestic market, such as the complex process of securing consent to carry out energy efficiency improvements within commercial premises, the role of assessors and proposed charges for non-domestic properties.
“We have previously raised a number of concerns surrounding the existing plans for non-domestic buildings […] With such an important new framework, it is essential that the Government gets it right first time. I believe this latest decision is in the best interests of both the consumer and the industry,” O’Hara said.
The Green Deal is being established to help homeowners and businesses access loans for loft and cavity wall insulation, lagging and other energy efficiency measures at no upfront cost. The Government says it will see billions of pounds lent every year and create hundreds of thousands of jobs between now and 2020. Most of the focus of Green Deal is on the domestic market, where the Government wants 14 million homes insulated by 2020. However, it is estimated 2.8 million businesses in commercial buildings could become more energy efficient under the Green Deal.
All businesses are seeing their energy costs rise, but small businesses are being particularly squeezed and are expected to see price increases of 15 per cent by the end of 2012, according to research commissioned by Make It Cheaper from the Centre for Economics and Business Research.
The Carbon Trust estimates that small to medium-sized enterprises (SMEs) could, however, cut their energy costs by 20 per cent through energy efficiency measures.