Green deal's upfront fees 'put people off upgrading homes'

Experts say cost will undermine government's attempts to encourage homeowners to invest in energy efficiency upgrades

• Adam Vaughan
• The Guardian, Sunday 6 January 2013 17.43 GMT
• Jump to comments (97)

About 14m UK homes are being targeted by the government's green deal. Photograph: Owen Humphreys/PA

Upfront charges of up to £150 are likely to put householders off the government's flagship plan to improve the energy efficiency of 14m homes, MPs and consumer groups have warned.

Launching this month, the green deal allows householders to take out a loan with companies who undertake work such as upgrading old boilers and lagging lofts, with the repayments theoretically offset by energysavings. Writing in the Guardian last year, the climate minister Greg Barker said the scheme would improve "draughty homes at no upfront cost" and "become the most ambitious home improvement programme since the second world war".

But a Guardian survey of the 24 companies listed as domestic "assessors" for the scheme found that, of the 18 that were contactable, five will charge between £95 and £150 for an upfront assessment fee. Eleven were not able to answer the question, one (Mark Group) plans to offer the assessment for free and one company had been mistakenly listed as a provider on the government's website.

Audrey Gallacher, director of energy at the consumer rights championConsumer Focus, said: "You could argue finance with interest rates attached and an upfront fee for the survey may put some people off this scheme, even though it would save money in the long term.

"Previous schemes have struggled to meet targets to give insulation away for free. So it will be a challenge to expect people to go out and secure finance. Nobody could argue with the good intentions of thegreen deal. But practically it will probably face quite a few difficulties."

The shadow climate change minister, Luciana Berger MP, said: "In order to be a success the green deal has to be a good deal for the public. It's unlikely that most people will think that paying £100 before they can even decide if they want to take out a green deal package is worth doing. Charging such a high fee is likely to deter those on low incomes and pensioners – exactly the people who could benefit most from installing energy efficiency measures."

The government is phasing out its existing Warm Front and Carbon Emission Reduction Target schemes – in which loft insulation and energy-saving lightbulbs were given to householders for free to cutenergy bills and emissions – in favour of the green deal and the Energy Company Obligation, which is targeted at lower-income households. In November, it was revealed that not a single household in the UK was on the central register for the green deal, despite assessors being able to go into homes from 1 October.

British Gas is the only big-name company currently listed as offering assessments, and it will charge £99 for its experts to go into homes and judge what measures, such as fitting cavity wall insulation, would be most appropriate for each property. Two of the companies contacted by the Guardian said they would refund the full assessment fee, or part of it, if works were also carried out with them.

Berger added: "When Labour raised the cost of assessments with ministers during debates on the energy bill last year, they told us they expected companies would not charge customers for assessments. It's now clear they were wrong and their mistake could seriously lower green deal take up. Decc [the Department of Energy and Climate Change] needs to look urgently at what action it can take to reduce the cost of assessments for those who are interested in taking out the green deal."

A Decc spokesman said: "Far from being put off, the green deal customer is in charge. It is a competitive market and we expect to see a variety of different offers allowing people to shop around for the one that suits them and their budget. As green deal plans become available in January, it is likely that some providers will offer free assessments as a way to attract customers while others may charge for it initially and reimburse it as part of a green deal. And there's separate support for low income households, who can benefit from mandated help from their energy supplier without a green deal assessment."

The government hopes to tempt householders into taking out green deals with a £2.9m advertising campaign, and hundreds of pounds in cashback from the government for the first people to sign up. Angela Knight, the head of the trade association Energy UK, has warned that the public awareness of the scheme is low: "If you ask people what they think of the green deal they will say: 'I don't know what it means, will you tell me about it?'" she said last month.