The number of households applying for a government-promoted energy-saving scheme has fallen by a fifth in the last month, as the green deal programme continues to falter.

The number of households applying for assessments under the green deal fell by 21% in December, compared with the previous month, to just over 12,000. Assessments are no guarantee that the measures will be taken up.

The government said the reduction in the number of assessments was due to the Christmas break, but winter is the prime time for households to consider insulation.

By the end of December, according to figures published by the Department of Energy and Climate Change on Tuesday, only 626 households had measures installed and financed by the flagship scheme, whereby householders can gain loans to install energy efficiency measures such as cavity wall insulation. A total of 1,612 households had active “green deal” plans in progress, of which 626 were complete.

However, the number of households receiving “cashback” under the green deal rose to more than 10,500, and the 8,773 cashback applications that had been paid for amounted to £2.5m. To receive cashback deals, it is not necessary for households to fulfil all of the insulation improvements that are applicable under the deal.

Most of the cashback applications were for boiler replacements, which qualify for help under the terms of the deal but make a relatively small impact on overall energy use, partly because many households are already under-heating their homes because of high energy costs.

The green deal is the coalition’s flagship energy efficiency policy, but has been much criticised because it requires households to take out loans to install insulation measures, at commercial rates though with a guarantee that over 25 years the savings in energy should cover the cost.

The mechanism was intended to run in tandem with the Energy Company Obligation, by which energy companies must pay a small proportion of their profits towards efficiency improvements to people living in fuel poverty and social housing. That adds to the bills of other consumers, however, and was the focus of the prime minister’s wrath when he allegedly called on advisers to “cut the green crap” from energy bills.

The amendments to the ECO mean energy companies have had their obligations to cut energy use relaxed for the next two years. Recent polling has found energy companies are even less popular than banks.

After several delays, the government’s “green deal” mechanism was finally launched at the end of last January. But the take-up figures have been far less than the government hoped.

Paul King, chief executive of the UK’s Green Building Council, said: “This latest set of figures, coming a year since the policy launched, should come as a wake-up call to government that the green deal is not delivering in its current form.”

He said: “Government must recognise energy efficiency as a national infrastructure priority and be prepared to delve into its purse to make its flagship policy more appealing through stronger incentives and more attractive finance options.”

However, if the government improves any of the terms associated with current green deal loans, it will face pressure to improve the terms for people who have already taken out loans at a less favourable rate.

Fiona Harvey, the Guardian

This article first appeared on the Guardian

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