Why the Green Deal’s new cash back offer is unlikely to boost uptake

The Green Deal Home Improvement Fund, announced last week, does appear to offer householders a less clunky way of accessing financial support to make their homes more energy efficient.


Householders can get up to £1,000 reimbursed for making two energy efficiency improvements from an approved list, and up to £6,000 if they choose solid wall insulation.


Through the Green Deal, the government is attempting to create a favourable “exchange” for householders to encourage them to take action on energy efficiency – reducing barriers to action (lessening the need for upfront investment) and promoting the benefits of action (saving money on energy bills).


However, despite the more generous cash-back offer, I feel it is unlikely that the government’s focus on creating a beneficial financial exchange will increase Green Deal participation, described by Ed Davey recently as “disappointing.”


Reducing the issue to simply a financial one assumes that people will make energy efficiency decisions based on rational thought processes whereas, in reality, situational factors and other preferences are likely to override a financial monetary motivation.


As most projects aimed at encouraging energy efficiency realise, ensuring that the benefits of adopting energy efficiency measures outweigh the barriers to installing them is much more complex than money in, money out. As described in our 2012 What’s in it for me? research for Consumer Focus, for some audiences other benefits aside from cost-saving will be more influential – such as increased comfort, or avoiding waste. For some other barriers will be stronger than having to pay upfront or affordability.  Cash back does not reduce the inconvenience of householders having deal with two or more companies if suppliers do not offer all the energy efficiency options on the approved list. 


Nor does it reduce the barrier of mistrust of the installer. To be eligible for the Home Improvement Fund’s cash back offer, works need to be undertaken by Green Deal authorised installers and providers. However, householders may wish to use more trusted local builders or heating engineers who aren’t in the scheme (perhaps due to cost or the complexity of the process). Finding a way of allowing local SMEs to offer the cash back deal may help to reduce the householder’s barrier of mistrust.


Unless other benefits are promoted and other barriers reduced, an improved cash-back offer in itself will not significantly improve Green Deal uptake.


How projects have sought to promote other benefits and reduce other barriers to energy efficiency is described in our 2012 report for Consumer Focus – What’s in it for me



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