The Government’s planned Green Investment Bank (GIB) must be at the forefront of promoting the Green Deal for housing if the UK is to deliver on its commitment to cut carbon emissions, a builders’ group has warned.
In the 2011 Budget, chancellor George Osborne committed to establishing the bank in order to stimulate private investment in the development of greener economic infrastructure.
Business secretary Vince Cable said prime candidates for backing include offshore wind projects and non-domestic energy efficiency schemes.
However, the Federation of Master Builders believes the bank will also have a vital role to play in promoting the Green Deal.
Under this initiative, households and businesses will be able to take out loans from private sector providers to cover the upfront cost of improving energy efficiency. The money would be paid back over the long term using the resulting savings on utility bills.
FMB director-general Richard Diment said that the UK’s homes currently contribute 27 per cent of the country’s carbon emissions – and 85 per cent of existing properties will still be in use by 2050, the point at which Britain is under a legal obligation to have reduced CO2 by 80 per cent from 1990 levels.
“If the Green Deal is to complete 14 million upgrades by 2020, the work will need to be completed at the rate of about 1.75 million homes per annum. This is around 33,000 per week or nearly 4,800 per day,” he added.
“To do this, the Government will need to do more to stimulate client demand and will need to drastically increase the number of Green Deal finance providers. The Green Bank can do both.”
The Coalition plans to establish the GIB in three phases. From April 2012, there will be an “incubation” period during which the Government will make direct, state aid-compliant investments that will be transferred to the GIB once it is up and running.
After 2015, it will be granted full borrowing powers subject to public sector net debt falling as a percentage of GDP.