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What's the deal?

The vast majority of us now agree that getting the planet’s CO2 emissions down would be a good thing. Most of us also agree that money is tight at the moment. So, logically, the government needs to ensure that any money it spends on lowering emissions is not wasted.

So what’s the deal with the Green Deal? The overarching aim is to persuade building owners to invest in measures to reduce CO2 – ie energy saving. Around 60 per cent of energy used in UK homes is accounted for by heating and a further 24 per cent by provision of hot water. So for the domestic market, it makes the most sense to concentrate spending on these two.

Improved insulation can obviously make a significant impact, but if households continue to use fossil fuels as their primary fuel, the scope for the reduction of carbon emissions is limited.

The only real alternatives for housing are switching the boilers to biomass, which requires dealing with regular deliveries and constant tending, or electricity. Unless you can put a wind turbine on your roof, the electricity can really only come either from solar PV cells or from the national grid. The good thing about this is it aims to generate more of its electricity from nuclear and renewable sources. In other words it enables you to heat your home with an increasing proportion of nuclear, tide, wind, waste-to-energy and biomass power.

As we all know, the most efficient form of electric powered heating is the heat pump, for both space heating and the provision of hot water. Coefficients of performance (COPs) for heat pumps result in between 3 kW and 5 kW of heat produced from every 1 kW of electricity used.

Logically, the best bang for the government’s buck in the domestic market would surely be to invest in heat pumps (of all types), plus insulation.

The new Green Deal measures do seem to generally include heat pumps of all descriptions, which again is a good thing. The problem is that the Green Deal itself offers no real help. Of course, by providing a loan, the householder can benefit straight away from the energy cost reductions of heat pumps, but to get that, he has to sign up to what is effectively an extra mortgage of up to 25 years, at a 7 per cent interest rate – about 2 percentage points above a much simpler commercial loan. Additionally, the loan will ‘stay with the house’, so when the house is sold, any buyer will have to take on that loan.

While taking out a loan to fit heat pumps and benefit from lower energy costs is a good idea, doing it outside the Green Deal is the best idea. Not what the government wants to hear, I know.

A better arrangement to promote heat pumps is the proposed Renewable Heat Incentive scheme, which gives real financial incentives to householders to reduce their carbon emissions. Unfortunately, the current proposals only cover air-to-water and ground source heat pumps. To have a real impact it needs to cover air-to-air as well. This is where we need to continue lobbying hard.

Julian Brunnock is the sales and marketing director of FG Eurofred, the face of Fujitsu in the UK

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