Isra-Mart srl:CBI: Green Deal a lame duck without business buy-in

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The government risks turning its flagship energy efficiency scheme into a so-called lame duck if it fails to provide businesses with greater clarity on how it plans to fund the Green Deal.

That is the stark warning today from the CBI, which has released a new report criticising the government's failure to clearly map out how the green home loan scheme will work.

Entitled Real Deal? Making the Green Deal Work, the report accuses the government of failing to detail how many properties it expects to take part in the scheme and offering little guidance on how loans provided to properties will be repaid and over what period.

Under the proposed Green Deal scheme, businesses and homeowners will be offered loans to help fund energy efficiency improvements to their properties. Repayments will be lower than the savings people realise through the green improvements they undertake – and the loans will be tied to the property rather than the individual, meaning people are not stuck with repayments.

The government views the programme as vital in slashing energy use in UK buildings, which accounts for 43 per cent of the UK's overall carbon emissions.

Energy secretary Chris Huhne has signalled that he expects the private sector to provide much of the funding for the scheme, revealing that a number of supermarkets and high-street firms have expressed interest in undertaking Green Deal renovations for customers. Further details on the scheme are expected to be released in the next few months with a view to presenting the legislation before parliament in the autumn.

However, shadow energy and climate change secretary Meg Hillier has criticised the Green Deal proposals as being overly complex, and has accused the government of failing to adequately answer how it will encourage people to take advantage of the scheme.

Similarly, the CBI will today urge the government to flesh out its proposals quickly, warning that businesses would not support the scheme without a "clear steer" from government.

"To ensure the scheme is a success, the Government needs to clarify how the Green Deal will be paid for in the early stages to give investors confidence, and make it simple and hassle-free for consumers," said Dr Neil Bentley, the CBI's deputy director-general. "The Green Deal is a good idea, but risks becoming a lame duck unless the government tackles the big questions of financing and uptake."

Policies such as mandating Display Energy Certificates for business properties above a certain size would stimulate interest and take-up in the commercial sector, the CBI said.

It added that three-quarters of the 1,992 people interviewed for the report did not consider the energy efficiency of a property when buying or renting, undermining government predictions that people would be keen to undertake green improvements to their home.

The CBI warned the government will need to do more to get consumers to buy into the Green Deal. Promoting the scheme through targeted communications at appropriate trigger points would yield better results, the report said.

A spokesman for the Department of Energy and Climate Change said the government was talking "non-stop" to businesses, including the CBI, to ensure the Green Deal proves effective.

"Providing clarity and confidence to businesses thinking about getting involved in the Green Deal is vital, which is why we're legislating through the Energy Bill to create the framework for this new market," he said. "The Green Deal is a massive new business opportunity and will be underpinned by a rigorous accreditation and kite mark framework which will drive up standards of workmanship and customer care."