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Green Deal has too much red tape

February 13th, 2013 · No Comments

Will the Green Deal help to generate work for small installation businesses? Peter Thom, founder of Green Heat and member of the IDHEE Executive Council, argues that the amount of unnecessary bureaucracy means only big national companies are likely to benefit. Here he tells PHAM News why he has become disillusioned with the Government backed energy saving scheme.

The Green Deal is now up and running, but you’re unhappy with the way the scheme has been set up. Why’s that?
“Basically, there’s far too much red tape and unnecessary and expensive inspection regimes which means that only a small number of installation companies are likely to want to have anything to do with it. Initially, and it was on the DECC website, if you were Gas Safe registered you were deemed to comply with PAS2030 (the accreditation installers need in order to participate in the scheme). But now that’s changed.”

Do you know why that decision was made?
“I’m told that the certification bodies voted for it, but of course they would, wouldn’t they? It’s in their interest. If you want to get installers involved with this then you’ve got to go with the systems that are already in place. The changes have all been about money, there’s no other possible justification.
“The Government has broken its promises to support small businesses. I had a meeting with Energy Minister Greg Barker, about 14 months ago now, on this very issue about small businesses having a role to play in the Green Deal. He gave his assurance then, and has many times since, that they really want small businesses to engage with this, but the reality is quite different.”

So what’s involved if an installer wants to become a Green Deal advisor?
“To be an advisor you have to get a qualification, and it’s a three day course which costs around £1500. You then have to complete a portfolio, and the learning hours to complete this course is set under National Occupational Standards at 280 hours. Which is seven weeks. If you then add the cost of lost revenue to a business you’re probably looking at around £12,000, plus the cost of the course.
“But once you’ve done all that, met all the standards and got your certificate, you can’t go on any lists to tell anyone that you’re a Green Deal advisor. That’s because you then have to be employed by a Green Deal assessor organisation. They’ve put another level of bureaucracy in! You can’t be an independent advisor, which I think is outrageous.
“So I’m now accredited to be a Green Deal advisor, but I can’t market my services as an individual. The rules don’t allow it. I have tried to get DECC to simplify it for the poor old public, because I think the consumer is going to be totally confused.”

What’s to stop a Green Deal advisor also setting themselves up as an assessor organisation?
“We could be an assessor as well, but it’s another layer of red tape and we would probably have to employ two people in an office just to move the paper around. The way the management systems have been set up is that it is a paper chase. It either means you’ve got to devote a lot of time to it or employ more administration staff to do the extra work, and not many small businesses are in a position to do that.”

Green Deal advisors are meant to be impartial when they provide homeowners with a survey. Can you see that working?
“If I went in to a property with my Green Deal advisor, charging the homeowner £150, I might offer to give that customer £150 back if they buy a boiler from me. But if I say that, I’ve broken the rules. It’s going to be impossible to police.
“There are people out there doing free surveys, because it’s a free and open market, but if you’ve spent £13,500 to get your accreditation then you can’t do it for free. It’s not a level playing field. Unless you’re a big organisation, you can’t offer it for nothing. And the only reason an installer is going to offer advice for free is if they’re going to get some business out of it. So either way you cut it, it’s not going to be impartial.”

You say that the cost of inspections are too high for the installer, but what sort of cost are we talking about?
“The Green Deal accreditation bodies want to come out and inspect every single measure that you’re going to want to get accredited for and charge you for the privilege of doing it. So, let’s say that I want to get accredited for gas boilers, then I decide that I want to get accredited for oil boilers. They’ve got to come out and see an oil boiler job. The same with heating controls and flue gas heat recovery – even if the flue gas heat recovery device is built into the boiler. They’ve still got to see it, even if there’s nothing to look at!
“There are currently 45 approved measures in the Green Deal and all of these have to be inspected by the certification bodies who generally charge about £300 per half day inspection; multiply this by the number of measures and lost revenue during these inspections and you’re talking about serious money, which small businesses just don’t have.”

As well as the number and cost of inspections, would you also argue that PAS2030 is an unnecessary obstacle for installers?
“All PAS2030 does is pull together the British Standards, the Codes of Practices and the Building Regulations that we in the heating industry already work to. There is nothing new in PAS2030 at all.
“We’re already an over regulated industry, but I suppose the challenge is to find a system that suits lots of different trades, including the insulation and glass and glazing sectors. There are some civil servants who view the Green Deal as a whole house makeover and individual industries are seen as just part of the whole. We don’t see it that way, because very few people do a whole house makeover. Most homeowners will just want to pay for those jobs that need to be done.
“PAS2030 is being re-written and you’ll be able to download the document, which runs to about 200 pages, for £75. PAS is a publicly available standard, but I’m told that anyone who wants to be accredited under the Green Deal will need to purchase a copy of this from BSI so that they can demonstrate compliance. That’s what we’re up against. It’s a gravy train.”

How optimistic are you that the Green Deal will work in terms of incentivising consumers to invest in energy efficiency measures?
“There are bits of the Green Deal that can be made to work, but I think less than 15% of properties will take it up – and that’s a much smaller market than the Government is hoping for.”

Do you think that the launch of the cashback will be more attractive to homeowners than taking out a Green Deal loan?“
Yes, because once you start talking about 7% interest rates, it’s expensive money. That said, if your boiler has packed up, and you’re sitting there shivering, and you’ve got no money in the bank to pay for it, the Green Deal could represent the only option. But I would suggest that if people have got money to pay for these measures in the bank, there’s no reason to be tied down to a loan on the property.”

You might be disillusioned, but will you still look to participate in the Green Deal?
“Well, I think we’re just going to have to bite the bullet. At Green Heat we’ve been in business for 23 years and all the work we do is about assessments and energy efficient heating installations. The Green Deal is the Government’s plan ‘A’ and there’s no plan ‘B’. So we’ve got to be in it.
“We’re very pro Green Deal. We’re not against it, but we’re highlighting the bits where it needs to be improved, because we really want to make it work. As it stands, the amount of carbon created by all the bits of paper that we’re moving about, together with all the people driving around the country inspecting installations, will probably negate any carbon savings that could be achieved.”

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