I revealed a few weeks ago that the government is considering paying families “cashback” of £150 to take up the Green Deal, the flagship energy-saving scheme. The deal begins in October next year and lets people spend thousands of pounds improving their home insulation; the cost then comes off their (lower) bills gradually over the ensuing years.
I’ve just been told that the Treasury (in the form of Danny Alexander) is about to announce £200m for the project as part of next week’s growth review.
The money is significant and could fund various types of incentive to help the government hit its very ambitious target of 14m homes by the early 2020s. Cashback is the one that we know about; but others – such as rebates on stamp duty or council tax – have not been ruled out either.
Richard Lloyd, executive director at Which?, is among those sceptical about the 14m homes target. (Sainsbury’s offered free insulation to 150,000 staff this summer and only 200 took it up).
He says: “It’s crucial that the Government gets the fundamentals of the Green Deal right. If it’s not good value for consumers overall, short term incentives will not be enough to guarantee that this scheme will be a success.”
The reason the Green Deal matters is that if it is unsuccessful then fuel bills are set to rocket by some £280 a year by 2020: Only by insulating homes – and thereby cutting bills – will consumers achieve the £94 cut in bills heralded in the Commong yesterday.