The Government's flagship Green Deal programme will likely “fail on all fronts” without urgent changes to the scheme, according to a warning from Which?, WWF and Greenpeace.
In a joint letter, the three organisations claim the current flawed policy will likely have a “devastating impact” on both consumers and industry as costs will spiral upwards.
And Shadow Climate Change Minister Luciana Berger said the warning was further evidence that the current plans for the Green Deal “simply don't add up”.
Today's letter, addressed to Energy Secretary Ed Davey, says the Green Deal, in its current form, risks “not delivering for consumers, the economy or the environment”.
It adds: "The Impact Assessment for the Green Deal predicts a significant fall in uptake of loft and cavity wall insulation, and that job losses in this sector are likely. This means that you propose forging ahead with a policy that could have a devastating impact, not only on consumers’ ability to cut their energy bills, but also on the home insulation industry, while seriously undermining attempts to cut carbon emissions.
“We therefore urge you to extend support for low-cost, high-impact measures – such as loft and cavity wall insulation – even further, particularly during the transitional period. Millions of homes still need loft and cavity wall insulation, which are among the most cost effective ways of cutting energy bills and delivering carbon savings.
“We also believe the reduction in funding for energy efficiency support for the fuel poor is also a matter of considerable concern so we want to see a greater share of ECO funding explicitly targeted towards tackling fuel poverty.
“Finally, we urge you to invest in large-scale pilot programmes and innovation to ensure that a sound basis is provided to allow the solid wall insulation market to develop over time.
“There is still time to save the Green Deal from failing to achieve its positive and ambitious aims. But if improvements are not made now, the Green Deal could fail on all fronts.”
Shadow Climate Change Minister, Luciana Berger MP said: “To be successful the Green Deal must be a good deal for hard pressed consumers struggling to meet the cost of sky high energy bills.
“This letter is a yet another stark warning to the Government that their current plans simply don’t add up.
“Ministers are predicting that the interest rates on Green Deal loans will be 7.5%, yet in many cases this rate will leave consumers paying more than twice as much for their home improvements.
“For example a Green Deal package worth £10,000, with an interest rate of 7.5% over 25 years, would cost £22,000 in total to pay back. Only this out of touch government could believe the public will think this represents a good deal.
“To make the Green Deal work, ministers should keep to their commitment and use the Green Investment Bank to provide Green Deal finance at an affordable rate for families and businesses.”
In a speech to the UK Micropower Council yesterday, Energy Minister Greg Barker said the Green Deal would be available to consumers from the beginning of next year.
The Minister explained: “The Green Deal will help bill payers make energy saving improvements to keep their homes warm and cosy. With the Green Deal people will be able to pay for some or all of the work done with expected savings on energy bills.
“The Green Deal will open up the energy market. It will unlock unprecedented choice for consumers and it will empower small and medium sized enterprises – the engine of our economy – to enter and to innovate. The Green Deal will be a massive opportunity for businesses of all sizes. One of my priorities is to see the smaller businesses get a slice of the action too.
“We’re on track to have the Green Deal framework in place by October allowing the market to come into being. We are continuing to work with delivery partners to start the Green Deal with an early period of focussed testing ahead of Green Deal plans being available to consumers from January.”