Green Deal Destined To Fail Experts Warn

Friday, 26 August 2011

The Government's new Green Deal initiative is destined to fail because most people don't understand how renewable energy works, experts warn.

Research undertaken by specialist energy saving engineering consultancy, Encraft, has found that more than 90 per cent of people who shopped for green energy options for their home failed to actually make a purchase.

When asked why they decided not to take the plunge, most said it was because they lacked confidence that they would get a return on their investment, or that they didn't understand the technology.

Matthew Rhodes, managing director for Encraft, said: "The Green Deal could offer a massive boost to the UK's carbon reduction and to the economy, but only if homeowners become confident about which renewable technologies can deliver long-term financial savings for them.

"If this problem is not tackled before the Green Deal is introduced next year, then unfortunately it is destined to be an expensive failure."

Encraft researched sales conversion rates in more than 2,000 specialist renewable technology installers around the UK. It found that although the majority had seen sales enquiries at least double over the last 12 months, only one in 12 enquiries led to a purchase.

For most installers, just 10 per cent of those who enquired about the likes of solar panels or wind turbine solutions actually had them installed.

Worryingly, it also identified that the majority of renewable energy technology installers didn't give their customers accurate, customised advice on when to expect a return on investment. As many as 56 per cent admitted that the payback timescales they gave customers weren't accurate to within a 12 month period.

The findings are a shot across the bows for the Government's Green Deal initiative, which is currently in the planning stages for introduction in late 2012. The scheme aims to offer financial assistance to homeowners who install energy-saving measures to homes, including renewable energy technology.

Matthew Rhodes, managing director for Encraft, said: "The effectiveness of renewables and energy efficiency technologies are totally dependent on location and the way they are used, which means there is no one-size-fits-all answer, and all advice must be bespoke for each individual site.

"Although the British public is coming to understand this, people have no confidence that investing in renewable technology will pay off for them. Most don't know that it's possible to get a payback timescale for renewable technology that is accurate to within a few months (based on transparent assumptions about inflation and usage) so they don't ask for one. New incentive schemes such as feed in tariffs and the renewable heat incentive provide highly predictable returns for many technologies over long time periods..

"As such, we found that only a third of installers gave quotes accurate to within a year. Nearly a tenth - and one in five in Scotland - didn't give a timescale to customers at all.

"If this problem is not tackled before the Green Deal is introduced, all it will achieve is to create a lot of wasted time for homeowners as they investigate technologies which are not suitable for their homes." 

Mr Rhodes added that the key to making the initiative work was to educate the public about how different energy saving measures and types of renewable energy work, and what to look for in a good installer.

He said: "There is a quality assurance initiative called the Microgeneration Certification Scheme, but most people have never heard of it let alone know what it is and why installers should have it.

"People also need to learn about what sort of information they need to ask for from their installer, what it actually means, and how to do their own homework, such as using online calculators to find out what the potential solar energy or wind speed in their area is.

"Until they do, the Green Deal is destined to fail."

Experts from Encraft advise that small scale wind turbines usually require a minimum windspeed of 5 m/s to deliver a return on investment within around 10 years.

Solar photovoltaic panels work best on unshaded, south facing roofs and when installed properly fully recover the cost of their installation within approximately 8 years[1][1],. The returns are 30% lower in the north of the UK compared to the south, because of the different levels of sunlight.


Key findings

Enquiries from homeowners

  • 29% ofrenewables installers reported that sales enquiries from homeowners had increased by 100-200% in the last 12 months
  • 22% said they had increased by more than 200%
  • 9% ofrenewables installers said that sales enquiries had decreased in the last 12 months


Consumer confidence

  • 50% ofrenewables installers said that they managed to convert one in every 10 enquiries into a sale
  • 14% managed to convert one in every 20 enquiries into a sale
  • 13% only managed to convert one in 30 or more enquiries
  • Only 20% were able to convert close to every enquiry into sales


Hurdles in selling renewables

  • 31%of installers said that the biggest hurdle in selling renewables to homeowners was that they lacked confidence that it would deliver a return on investment for them
  • 21% ofrenewables installerssaid that customers didn't understand the technology sufficiently
  • 9% said customers were suspicious of cowboys


Accuracy of advice

  • 14%of renewables installers saidthat theygave customers payback timescalesthat were accurate to within 2-3 years
  • 42% said theirs were accurate to within 1-2 years
  • 24% were accurate to within 6-12 months
  • Just 11% said their advice was accurate to within 6 months
  • 9% admitted not giving customers a timescale at all.


Regional findings

  • Enquiriesfrom the public aboutpurchasing renewables were highest in the South West of England with 65% of installers receiving at least double the number they were 12 months ago
  • Enquiries were lowest in the West Midlands with 42% of installers saying that they hadn't seen any increase in enquiries or had seen a decrease over the last year
  • Consumer confidence was highest in Wales with 36% of installers boasting that they were able to convert almost every enquiry into a sale, closely followed by Scotland (34%) and the south of England (32%)
  • Consumer confidence was lowest in the North West with 38% of installers struggling to convert more than 1 in every 30 enquiries into a purchase and only 8% converting almost all enquiries into a sale
  • Installers in the West Midlands provided the most accurate advice with 21% giving payback timescales accurate to 2-3 months.
  • Scottish installers were the least forthcoming with information, with 20% failing to provide their customers with a payback timescale


Examples of localised renewable energy payback timescales around the UK



Available average windspeed

Payback period for a wind turbine[2][2]

Available average solar energy per year

Payback period for a solar system (photovoltaic)[3][3]

10 Downing Street, London

4,6 m/s

More than 30 years

1000 kWh/sqm

6 years 9 months

Edinburgh Castle

5.7 m/s

5 years 4 months

881 kWh/sqm

7 years 8 months

Birmingham Bullring

5.0 m/s

More than 30 years

967 kWh/sqm

7 years

Cardiff Millennium Stadium

4.9 m/s


18 years

966 kWh/sqm

7 years

Manchester Town Hall


More than 40 years

926 kWh/sqm

7 years 4 months

Belfast City Hall

4.5 m/s

More than 40 years

974 kWh/sqm

7 years 11 months





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Editor's notes: Encraft is a microgeneration consultancy specialising in low carbon analysis, design and project development.


Matthew Rhodes, managing director of Encraft is an independent expert for the EU Intelligent Energy Europe Programme, advising on funding international projects in building energy efficiency. He is also an expert adviser to the UK Engineering and Physical Sciences Research Council (EPSRC),  and Technology Strategy Board regarding micro-generation and energy efficiency, and a technical architect of the Birmingham Energy Savers £500 million low carbon housing retrofit programme, and Project Viridis a £50 million retrofit project in Liverpool involving four different local authorities and 12 social landlords


[1][1] This does not allow for energy price rises

[2][2] UK-manufactured 6kW turbine, mounted away from the buildings and costing £25 000 fully installed. Paybacks at today's prices with no allowance for inflation. Calculations allow for terrain and building density as well as average annual windspeed.


[3][3] 30 sqm of solar photovoltaic modules on a roof sloping at 40 degrees and facing due South and costing £12000 fully installed. Paybacks at today's prices with no allowance for inflation.