By guest columnist Bill Wright, head of energy solutions, Electrical Contractors’ Association
The recent publicity over the slow progress over the Green Deal highlights the fact that renewable energy installations are not actively encouraged within the scheme. Renewable energy systems are on the list of eligible technologies for Green Deal finance but they rarely meet the ‘Golden Rule’ which is that the cost of the loan repayments must be less than the cost of energy saved. This is because Feed-in Tariff income is not allowed to be included within the calculation. In order to meet the ‘Golden Rule’ the customer has to fund around 60 percent of the total cost and then the rest can be covered by a ‘Green Deal’ loan. Considering the cost of finance is approximately 7 percent, this is not a very good incentive. If the rules could be changed to allow Feed-in Tariff payments to be taken into account this could give a new boost to both the Green Deal and the renewable energy industry. The ECA has campaigned for this and other changes such as a reduction in stamp duty and reduced council tax or business rates for efficient buildings, including ones with renewable energy systems. Will this happen in 2014? We will just have to wait and see.