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Fear of debt putting consumers off energy efficiency schemes

By Katie Anderson on May 2, 2013

The government’s response to a Freedom of Information (FOI) request has revealed that certain groups of people in the UK are discouraged from taking advantage of energy efficiency schemes such as the Energy Company Obligation (ECO) and Green Deal.

The FOI report suggests that many households fear getting into debt over schemes that are far too complex to understand. The report also reveals that the Department for Energy and Climate Change (DECC) identified concerns after it commissioned focus groups to study the level of interest in state-run energy efficiency initiatives.

According to National Energy Action (NEA), which carried out a number of the focus groups earlier this year, many “older people, families and households with disabilities and long-term health conditions” are “concerned about taking on a debt/further financial commitment like a Green Deal in the current financial climate”. NEA, a charitable organisation that receives funding from DECC, added that many people who took part in the focus groups were baffled by the ECO.

Although NEA revealed that most people trust the information provided by not-for-profit organisations and local authorities, relatively few recognise the benefits of the ECO and Green Deal.

After focus groups were assessed in January last year, NEA authored a summary on its findings. An excerpt reads: “The research found general acceptance of the pay-as-you-save principle behind the Green Deal. However, there was enthusiasm in the private rent sector, where tenants were reluctant to participate in a pay-as-you-save mechanism to improve the energy efficiency of their landlord’s property”.

A spokesperson for DECC noted that approximately  540 million a year will be spent on helping “vulnerable householders and those on low incomes” improve the energy efficiency of their homes. The spokesperson added that Green Deal loans are attached to properties, not householders, so fears of paying for benefits received by landlords may be unfounded.

Homeowners and tenants throughout the UK can improve the energy efficiency of their homes in a number of ways. Installing loft insulation and cavity wall insulation under the Green Deal may provide financial benefits for some households, whilst replacing old, energy inefficient boilers can also result in significant annual savings.