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Could Don Draper sell energy efficiency?
29.01.2013  
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http://www.rtcc.org/could-don-draper-sell-energy-efficiency/

 

There's nothing sexy about solid wall insulation or lagging a boiler.

 

It's a major part of the reason why energy efficiency is such a tough sell for policymakers. It's a challenge befitting Don Draper, Mad Men's main antagonist and advertising genius.

And it's safe to say one glance at the UK government's latest attempt to market their efficiency revolution called the Green Deal would make Don drive his Buick Invicta Convertible into the nearest river. At full speed.

But we'd better just #GreenDealWithIt.

The trouble with mocking the #GreenDeal is that it's vital. It's our "best bet after Kyoto" to stave off 2°C according to the IEA's Fatih Birol, while consultancy Ecofys estimate 40% of energy use and carbon emissions are related to buildings.

In Don Draper's absence, the UK Department of Energy and Climate Change is relying on a £3m advertising campaign and the ministerial duo of Greg Barker and Ed Davey to launch the policy.

It officially starts today, but the charm offensive kicked-off last week with a near two-hour briefing for journalists.

"We want energy efficiency to be the new scatter cushion. Less grey boiler suit and more Linda Barker," Greg Barker said, with a tongue-in-cheek reference to a TV interior designer, before reminding his captive audience that they can also "grab a grand" via the cash back scheme that will run in the early phase to encourage take-up.

While Barker was putting in the hard sell to the media, the creative team at DECC were adding the final touches to the print campaign. We won't speculate on whether they celebrated its conclusion by downing Old Fashioneds in a Whitehall watering hole.

Back at the media briefing Davey compared Barker to a QVC salesman. While Barker's delivery was certainly that befitting of a sequent-jacketed TV shopping host, the message was very different.

TV shopping is about conspicuous consumption, sowing and exploiting the whims of its viewers.

Hard sell

Energy efficiency is of course about a much longer term investment. This is part of the problem.

While renewable energy can generate money, money saved is more abstract and a harder sell.

In the past, energy efficiency schemes have typically been grant-based with governments' ring-fencing a pot of money on a first-come, first-served basis.

Government-backed loan schemes meanwhile have been reliant on the personal credit history of the applicant. This puts some people off applying and makes others, often those that would benefit most from cutting their bills, ineligible.

The Green Deal saw a few UK laws tweaked to enable the finance to be set up outside the usual routes and with repayments made through electricity bills, not through standard loan repayments with credit history on the line.

This is where the scheme's Golden Rule comes into play. Repayments will not exceed the savings made meaning that to all intents and purposes, you don't feel the effect of the repayments in your household income.

When you leave the house, the Green Deal repayments stay attached to the property and in theory, the next resident takes over the payments, and receives the benefits.

There is of course another layer of complexity beneath this.

You need an accredited assessment of your home before you start and if you haven't made the basic energy efficiency improvements, you're not likely to get help installing new whizz-bang boiler. There are ombudsmen and kite marks, and training programmes. Consumers will not be exposed to the majority of this however.

The change in the financing makes this a big improvement on grant schemes. The more people sign up for the scheme, the bigger it gets.

The government hopes that the repayment system will create a new market for energy efficiency that takes the risk out of an up-front investment. Accredited suppliers, installers and assessors will benefit, become competitive, bring down prices and help more people to take part. They predict 35,000 jobs in the sector to be created by 2015.

The interest rate that the Green Deal will charge, 6.9%, has been criticised as too high to encourage participation. It is higher than had been anticipated but energy bills in the UK are rising at around 10% a year.

Some critics claim it is a scheme to line the pockets of the financial institutions that will provide the money in the background. Even if this were the top objective of the policy, those without £10,000 to spend on energy efficiency improvements up front (most of us) will never be able to make those changes without finance. Vilifying anything touched by the banking sector is easily done.

An unsecured Green Deal loan that doesn't exceed your current household outgoings is surely preferable to standard personal loan through a bank, and more likely to encourage wide participation.

High prices, easy sell

Selling energy efficiency in the UK, where bills are soaring should be easier than it has been so far. It's no coincidence that markets with heavily subsidised, cheap fossil fuels also have abysmal efficiency records.

The argument is strong for all parties. Less emissions, lower bills, job creation, improved house value.

The difficulty is capturing all of these in a straightforward policy that doesn't send the public to sleep and works for all households regardless of income.

Germany has tried subsidised loans, grants, increasing building standards and it has had some success toward its contribution to meeting the EU 20% efficiency target for 2020.

A recent audit of EU efficiency funding for public sector projects found that only 10% of the €5bn was being used appropriately and that some installations would never recoup their full value during their lifespan.

Press reports of only five homes having taken up the offer were a bit of a red herring. The scheme had not yet been advertised and was running in a tentative pilot mode.

Of the three EU 20:20:20 targets renewable energy use and emissions reductions are on track, but efficiency is falling behind.

The Green Deal is a different approach but it remains to be seen if it will prove straightforward enough to attract widespread adoption. There's more at stake than DECC's reputation with 2017′s 2°C deadline approaching ever closer.

With some keen to write it off before the ads have even rolled, even Mr Draper could be out of his depth.

 

 


 
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