Three contractors are among a list of 22 prospective Green Deal providers that signed an agreement with the Department of Energy and Climate Change this week. The 22 will now work closely with DECC on the working details of a funding mechanism that could launch a multi-billion pound market.
Willmott Dixon Energy Services, Carillion and regeneration specialist Keepmoat have all signed up to become “providers”, as has Sunderland-based social landlord-to contractor group Gentoo.
Other names throwing their hat into the Green Deal ring include British Gas, community interest company Yorkshire Energy Services, replacement window company Anglian Home Improvements, and Insta Group, which operates the Snug Network of 80 SME insulation installers.
The provider role will vary according to the business model of each organisation, but will mean acting as the “face” of the Green Deal with the tenant or owner-occupier and providing long-term warranties for the works.
Rob Lambe, managing director of Willmott Dixon Energy Services, says the announcement is the latest step towards a “significant business opportunity” in the domestic and non-domestic sectors.
“We’re investing as we see a significant market opportunity and we’re positioning ourselves for a 20 year programme of work. A lot of work still needs to be done, but we anticipate that the first Green Deal plans and contracts will get underway towards the end of the year and beginning of 2013.”
Willmott Dixon Energy Services plans to launch a Green Deal service with local authorities and social landlords it already works with, giving it the option of linking Green Deal improvements to planned maintenance programmes or other works in tenants’ homes.
Once these joint ventures are active and visible in a given area, it hopes that local private sector owner-occupiers would also have the confidence to sign up for Green Deal contracts.
As well as the Green Deal funding mechanism, Willmott Dixon and other contractors can expect to benefit from the Energy Company Obligation – a £1.3bn a year levy on the utility companies to finance low-carbon retrofits for low income households or where the “Golden Rule” does not apply.
“That’s a huge amount of money to be invested in the marketplace. If you add in the Green Deal plus direct contributions from owner occupiers or landlords, you quickly get into a massive £3-4bn a year market. That would certainly provide a strong platform for us to grow our business,” says Lambe.
A spokesman for Carillion also pointed to opportunities under the ECO and in the non-domestic sector. “We see the Green Deal as having enormous potential to make a range of energy efficiency improvements far more affordable and accessible to households and businesses – and on a scale really not seen before. Measures such as solid wall insulation and other technologies, which make a huge difference but may have been overlooked in the past due to cost, can now be financed through the Green Deal and Energy Company Obligation mechanism.”
Meanwhile, Sally Hancox, director at Gentoo Group, stressed the need to get the details right before the scheme is launched to the public in October. “The principles of the Green Deal are sound and we believe that social housing can play a great part. We are happy to be part of this pioneers group to assist in developing robust systems that can ensure smooth delivery when the Green Deal goes live. It’s vital that we get the finer detail of the Green Deal right before it goes live in order to deliver warmer homes for our customers while simultaneously tackling fuel poverty and carbon reduction.”
More detail on how the Green Deal will work are expected in early summer when the government responds to the recent Green Deal consultation. It must then pass secondary legislation to provide the legal framework for the Green Deal constracts, under which tenants or owner-occupiers repay the up-front costs of insulation measures via their energy bill.
