Have any consumers heard of the Green Deal? - by Mark Oliver
Green Deal launches for real on 28th January next year, when the first consumer finance plans can go live, to kick-start the mammoth task of making 25 million existing homes more energy efficient by 2050. I have concerns, that, unless consumers know about the Green Deal and what it’s trying to do, then take-up could be much slower than anticipated. It’s classic marketing, if people don’t know about something how can they buy it?
Lessons from history
The last time we "invaded" homes on this scale was probably the switch from town gas to natural gas, when boilers and cookers in 13 million homes were retro-fitted between 1967 and 1977. Not as big a disruption to a household as a Green Deal improvement, but there might be lessons to be learned on how to implement the Green Deal.
A more recent example might be the Digital Switchover. This didn't, in most cases, involve actually going in to people’s homes to make changes, as Green Deal will, but it had a £210m budget for marketing alone. It also had a dedicated website with 3.5 million visits in the last year, social media campaigns, print advertising, PR, road-shows and more besides. It seems to have worked quite well in persuading people to change from analogue to digital although, as with the gas switchover, homeowners had no choice. What level of commitment is behind Green Deal?
In September DECC distributed £12m for “green deal testing” and the UK Green Building Council (UKGBC) has set up a working group to examine 10 additional policies to bolster Green Deal take-up, such as vouchers, or a feed-in-tariff style subsidy.
£125m is already allocated on cash-backs to generate early adoption of Green Deal measures, with up to £1,000 available for those who get in there first. But how will Joe Public find out about the cash backs when the Government has had a blanket ban on major national advertising campaigns since taking office?
Earlier in the year the Green Alliance think-tank called for a relaxation on this ban. "It comes down to basic economics," said Alastair Harper, senior policy adviser at the Green Alliance. "If you spend a lot of money making these policies happen but then don't tell people about them you are not getting an optimal return on your investment."
Greg Barker, Secretary of State at DECC said, in November, “we have a major PR plan for 2013 but the biggest push will come from the diverse range of Green Deal providers themselves.” Is this enough? For such a flagship policy as Green Deal is it satisfactory to shift the promotional onus onto the providers with an as yet un-detailed Government PR programme to support it?
There will always be trust issues with new initiatives such as Green Deal, especially if the big energy companies and retailers are promoting it and Government is seen not to be. The ‘big six’ energy firms are not everyone’s favourite corporations, and neither are some of the other companies signed up as one of the 12 Green deal providers. It’s not to say Government is held in any higher regard, but it can lend its authority to help promote change, and has done this successfully in the past.
To put this in context, we know that homeowners are currently reluctant to have firms come into their homes to carry out free insulation work, it’s too much hassle for them. If the energy companies cannot give away home insulation for nothing, then what chance does Green Deal have without a significant change in public attitude?
I recently attended the Programme for Sustainability Leadership run by Cambridge University and the UKGBC, where we spent some time evaluating how one might influence UK homeowners to change their attitudes. Different approaches for different types of homeowner. Not just cost saving drivers, but aspirational ones too as well as ethical ones.
Perhaps we need a mind-set change that not reducing your carbon emissions is no longer socially acceptable as well as saving you money. Over the past few decades we have seen this change with drink driving and smoking in public places. How did those changes come about and what can we learn? In both cases there was some leadership from Government…
Is Government committed to sustainability and reducing carbon emissions? It wasn’t on David Cameron or Vince Cable’s agenda at the CBI conference that I recently attended. The only mention of carbon emissions was that the UK’s contribution was only 2% of the global total compared with Europe’s 13%. But subsidizing low carbon power generation is in the Energy Bill.
Is the Government committed to beginning the retrofit of more than one home every minute between now and 2050, or does it think this can be delayed whilst it focuses on economic growth? Couldn't it be part of the solution to growth, creating jobs and saving energy? In their analysis of CO2 abatement costs my alma mater, the management consultants McKinsey & Co, identified insulating buildings as by far the best investment we can make to tackle climate change whilst also saving cost.
There is a factor that will have an impact on take up, it is rising energy prices. In 2010 the UK lost its energy independence when it became a net importer of gas and is now subject to global energy prices. If Green Deal can be positioned as the way to guard against inevitable energy price rises then it could get more interest. It’s also true that people are staying longer and longer in their homes before moving. The average home-owner used to move every 4 years or less, that is now over 10 years and could become even longer. Therefore, surely it makes sense to improve the energy efficiency of your home if you’re going to be living in it for longer?
Why is the level of promotion of the Green Deal important? Well, many are wondering how to prepare for it in order to capitalise on the sales opportunities it might present. But, without knowing how the Green Deal market will develop it is difficult to judge how to prepare.
There is no point investing in skills and inventory too far ahead of the demand curve. On the other hand if you wait till you see a bandwagon it could be too late to jump on it. So it is important that Government communicates the detail of the “major PR plan” that it intends to launch in the New Year.