Give the Green Deal a chance - Rome wasn't insulated in a day

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20 August 2013, Gas, Electricity

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The latest statistics released by the DECC cover to the end of July and offer some interesting insight into the Green Deal process. Assessments are currently running at around 13,000 per month, and in July there were 286 new Green Deal plans, a conversion rate of around 2%. Again, this low conversion rate may be disparaged by commentators, but the process is still ramping up and is very much in a pipeline building phase. Households will take time to evaluate the proposals and decide what is best, so the conversion rate will increase as households get to grips with the assessment results and make their decisions.

The headline statistic of only one "live" Green Deal plan is also misleading. For a Green Deal plan to become live, all paperwork has to be completed (including finalizing all charges, making sure the energy supplier has all the relevant information to implement the charges, and gaining information to disclose charges to future bill players) and all measures have to be installed. This process takes time, and it is not fair to judge the program until enough time has passed in which a larger number of households could have passed through the lengthy assessment/sign-up/installation pipeline.

The Green Deal has been operating for around seven months. A fair judgment on its performance cannot be made until after a year or longer. When looking at these results it is often forgotten that supply chain networks have to be set up behind the scenes, including the 1,457 Green Deal accredited installers, and this does not happen overnight.

The scheme is unlikely to hit Chris Huhne's overambitious initial target of 3.5 million homes in the first two years of the scheme. Keeping an eye on progress is advisable, but it is not absolute results we are looking for right now - it is evidence that the scheme is ramping up, which currently signifies positive, if modest, progress. / / @DatamonitorEN

Source: MarketLine

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