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Clarity needed on government energy schemes

The government’s failure to translate legislation into meaningful policy to improve existing building stock is less than impressive.

The Comprehensive Spending Review in October 2010 announced a series of initiatives including the Renewable Heat Incentive (RHI) and the Green Deal.

The introduction of the RHI -designed to encourage property owners to install renewable technologies - comes as welcome news. Due to be implemented in June this year, its aim is to drive uptake in micro-generation.

It is anticipated that the scheme will provide participants with a 12 per cent rate of return on their initial investment across all technologies, apart from solar thermal which will generate six per cent.

The first renewable heating initiative of its kind, the RHI has the potential to become a global-leading scheme. As well as helping both homeowners and businesses reduce energy bills, it also stands to create thousands of job opportunities.

But before this ambition can be realised, the government needs to make clear the details of the scheme as well as the level of support required from the construction industry.

The Green Deal is proposed as helping improve the performance of Britain’s existing building stock by making funds available to refurbish every existing building in the UK. Homeowners and businesses will be offered a loan of up to £6,500 per property to improve energy performance - with repayments being made through the savings made on energy bills.

While the first deals are expected to be available as soon as Autumn 2012, the question as to how homeowners and businesses will be incentivised to participate as yet remains unanswered. In addition, the confusion about how landlords and tenants in the rental market will benefit if the deal becomes compulsory still needs to be resolved.

The government needs to address these issues and engage directly with the industry. Getting the details right will enable the government to realise its aspirations, but the construction industry and Whitehall need to adopt a more collaborative approach. This will help realise a tangible improvement in energy performance, while helping property owners reduce their energy bills.

Neil Donald is managing director at SIG Energy Management