As the prime minister is reportedly reviewing the coalition's flagship Green Deal, we want him to take this opportunity to make big changes to ensure this scheme turns out to be a good deal for consumers.
Which? supports the ambition for homes to be more energy efficient and we welcome help for people to install energy saving measures in their home, especially at a time of tight household finances and rising energy costs. As it is planned, though, there is a real possibility that consumers will be persuaded to take on a big Green Deal loan and the promised savings on their energy bills will fail to materialise. This is because, while there will be a personalised assessment on savings, the amount a Green Deal company can lend a consumer won't be calculated taking into account their actual energy use. Instead they will uses average figures which can give an inaccurate picture.
The Green Deal's 'Golden Rule' says that consumers will not pay back more in their regular payments than they save on their bill from using less energy. But there is nothing to guarantee this and there is no redress if people do end up paying more than they save.
We also think there is a real risk that consumers will be sold products that they don't want or need because the government has said that companies can use the Green Deal as an opportunity to sell other home improvements unrelated to energy efficiency. This opens up the opportunity for hard selling by energy and finance companies that are already distrusted for their past activities on the doorstep, and would make for complex and confusing financing.
The Energy Company Obligation (ECO) will be launched alongside the Green Deal and used mainly to subsidise expensive solid wall insulation, which many older homes need. However, the cost of ECO will be passed though to everyone's energy bills, a move that is difficult to justify when it is likely to benefit the better off and when many people on lower incomes are already struggling to pay. It would be fairer to allocate more of the ECO to help fuel-poor homes. It would also be better to step up investment in low cost energy saving measures like loft and cavity wall insulation that will have a bigger immediate impact, since it will help a larger number of people to manage their bills.
Today, Which? is setting the government five challenges to improve the Green Deal to make it fairer and more attractive for consumers. It must not be a licence to mis-sell products that people don't want or need; the estimated savings must be tailored to people's actual energy use; there must be no harsh penalties for early repayment; quotes must be clear and comparable; and the ECO must be fair to all and cost effective for consumers.
Too many of the government's policies - from the carbon floor price to the £11 billion smart meter fiasco - are likely to prove ineffective at reducing energy consumption while consumers foot the bill. People tell us that rising fuel bills are their number one financial concern. With energy companies already warning of price rises this coming winter, the government simply cannot expect consumers to pick up the tab for ill-thought out policies that won't work.
With the launch just months away, our message to the government is clear - time is running out to rescue the Green Deal.