Consumers need to be better informed to make Green Deal a success

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  • Clear evidence of the benefits of the Green Deal – but consumers believe that the “job’s done” on energy efficiency
  • Better information, trusted by consumers, is required to create the conditions for Green Deal uptake
  • Government, utilities and finance providers all have a role to play and will be the beneficiaries of a better debate on energy prices

London, 27 October 2011: Action is required to tackle consumers’ misconceptions over energy efficiency in order to ensure the success of the Government’s flagship Green Deal policy, a new report from EY has recommended. The research, which examined the attitudes of 2,000 UK home owners, showed that giving consumers better information and engaging with them effectively will be vital to ensure that the Green Deal meets its objectives;

  • 79% of consumers already believe their homes are energy efficient – even though far fewer than that have key energy efficiency measures installed.
  • Only 39% have cavity wall insulation, only 39% have a high efficiency boiler, whilst 31% do not have even have loft insulation.
  • Despite this, only a tiny number of households plan to install new energy efficiency measures – 12% for photovoltaic panels and high efficiency boilers, and only single figures for every other measure mentioned in the survey.

The report finds clear evidence of a market need for the Green Deal, but shows obstacles remain to Green Deals success. According to the research:

  • Inability to afford the upfront costs of energy efficiency is the number one reason why consumers are holding back. 41% of consumers say this is the top problem.
  • Two fifths of consumers (43% and 39% respectively) believe that relatively high cost measures like solar electric panels and solar water heating could save them money. For many households, such measures are only affordable if they receive help with finance.

The report showed that consumers have a clear understanding of impending energy rises, with 22% expecting to see rises as high as £500 per annum, yet 43% of consumers stated they require more information on how they could save money. Overall, the research showed that consumer knowledge about energy consumption is exceedingly low:

  • 71% have no idea how much they spend heating their home during winter.
  • 80% are unaware of the cost of heating their hot water supply.
  • Less than a fifth have any idea of the cost of running key appliances – only 16% for TVs and fridges/freezers, only 18% for laundry appliances, and only 17% for kettles and lighting.

EY’s James Close spelled out the challenge facing the Government: “Our research shows there is a clear market need for the Green Deal. The upfront cost of energy efficiency is the single biggest barrier to consumers doing more to save energy. This is the gap that the Green Deal fills. For the policy to have an impact, consumers need information that they trust to be persuaded that it will help them. At the moment consumers misguidedly think it’s a case of ‘job done’ on energy efficiency.”

The report shows that better information is needed to clear up consumer confusion over energy efficiency and improve awareness of the help and advice available. Whilst 58% of consumers felt that financial incentives would encourage them to invest in energy efficient measures only 7% of consumers were aware of the Green Deal. Revealingly, consumers stated that they lacked trust in their energy suppliers to deliver them with reliable information and offers, just 6% of those polled said they trusted their energy supplier.

James Close summed the situation up, stating “Consumers are confused by the myriad of offers available to them and, given the current focus on energy pricing, we shouldn’t be surprised that they look for a catch when energy companies encourage them to use less. The Green Deal is an important step, but financial incentives alone won’t work unless consumer information and understanding is significantly improved. The prize for getting creating a common and compelling voice to the consumer about why they should take up the Green Deal will help customers commit to the right energy efficiency measures and improve the public debate on energy prices.”

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