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DECC confirms move away from energy efficiency subsidy at industry event

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DECC's Ben Golding (left) outlined the government's position alongside UKGBC's Richard Griffiths (right) at today's launch event for the LENDERS project.

The Department of Energy and Climate Change (DECC) has confirmed its policy shift away from the able-to-pay domestic energy efficiency sector at a launch event for a new research project seeking to link energy costs with mortgage lending.

The LENDERS project, spearheaded by the UK Green Building Council (UKGBC), incorporates mortgage providers and construction industry experts to see how the energy performance of UK homes could affect the value of mortgages providers are willing to provide.

The project, partly funded by the government-sponsored Innovate UK agency, will use Energy Performance Certificates alongside other property information to estimate the energy performance and associated costs of individual homes and judge how they feature into household expenditure. This information can then be used to inform how much homeowners can afford to borrow, effectively creating a link between energy efficiency and value.

Speaking today at the project’s launch, Ben Golding, head of the strategy and finance team for home energy at DECC, said: “LENDERS is exactly the kind of project government gets excited about at the moment. It’s got huge potential to improve people’s lives, to drive deployment of very much needed energy efficiency measures and best of all, it needs very little or nothing in the way of government action.”

His comments follow an appearance alongside Lord Bourne earlier this week in front of the energy and climate change select committee. During the session, it was floated that a new energy efficiency policy similar to the failed Green Deal would be pushed back until after the introduction of the new energy supplier obligation in 2017/18.

The department’s move away from this sector was reaffirmed today when Golding added: “Over many years, we’ve created a market – and government is largely to blame for this – that has become over-reliant on subsidy. We hear a lot about stop-start subsidy; certainly in the long run this isn’t sustainable.

“So we are looking to change that. There is still subsidy in the market but increasingly we are looking to target that at the fuel poor and move away from the more able-to-pay.”

This policy outlook is one that the UKGBC was aware of when developing the LENDERS project. John Alker, campaign and policy director for the UKGBC who chaired today’s event, said: “I think it’s pretty clear that the existing policy environment is not really going to provide the drivers that are going to get us where we need to get to, so I think it’s right that we look at where the more innovative ideas are going to come from. Market-led industry thinking is going to happen and this kind of project certainly falls into that category.”

This view was confirmed by Richard Griffiths, senior policy and business development advisor for UKGBC, who said the project had been developed following reductions in activity under ECO and the Green Deal, prior to the scheme being scrapped.

“We were looking to see what alternative measures were potentially out there to pick up some of the slack that policy was not delivering,” he said.

The LENDERS project will run until April 2017, with a first update on its progress due in the autumn.

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