In September, DECC published the results of their 2nd wave of research on the Green Deal, covering customers who’d had assessments between 1st April and end of June 2013.
Up to that date, around 44,000 households in Great Britain had received a Green Deal advice report (GDAR) since Green Deal launched on 28 January. According to the research, all these customers resided in England or Wales.
You can check DECC’s Green Deal and ECO statistics webpage here for the current figures. DECC commissioned two surveys, each taking a sample of 900 addresses who’d received a GDAR. The headline results of the first survey, covering people who’d had assessments from the scheme launch to the end of March 2013, was previously published in June here and the results published in September relate to the 2nd wave.
Although the research findings tell us a lot about the developing Green Deal, one thing that immediately stands out is the huge response rate to this survey. Where it’s generally accepted that a 10% response rate is a high level of response, responses to this survey ran at over 50%! This was true for both waves, with the first wave reaching 56% and the 2nd only slightly less, at 55%.
This level of response is normally only seen where the survey subjects have a high level of interest or involvement in the area being surveyed. Although people were offered a £10 incentive for taking part, this wouldn’t normally be expected to improve response rates by this much – people are busy, and £10 isn’t a huge incentive. In total, over a thousand responses were received, out of a total of 44,000 GDAR recipients. That’s one in 44, more than 2% of all Green Deal customers. It’s likely, then, that the interest amongst those who took part in the survey can be read across to all 44,000 customers. 55% of Green Deal customers are sufficiently interested in improving the energy efficiency of their homes for them to bother completing a survey, if asked.
So, if over 55% of customers are interested in improving their home’s energy efficiency, why is the take-up of Green Deal plans still so low? I’ve considered some issues that affect take up in a previous blog here and now we have more information from this survey to allow us to speculate further. Here goes!
One thing that would impact take-up of Green Deal Plans would be the customer’s original attitude to using Green Deal finance. Only 16% of respondents said that the reason they had the assessment was ‘To allow you to pay through GD finance/cashback’. The research also found that Green Deal finance was mentioned by a significantly lower proportion at Wave 2 than in the first wave, where 23% mentioned this as a reason for having the assessment. There was a fair amount of negative press about Green Deal finance during the early part of this year (in fact, this still continues), and it may be that this reduced the likelihood that customers would consider it. Whatever the reason, it’s clear that if only 16% wanted to use Green Deal finance, it’s no surprise that the remaining 84% would not want to approach a Green Deal Provider to ask for measures to be installed via ‘pay as you save’ finance.
Satisfaction with the assessment
Another interesting find is that the perceived usefulness of the assessment, customer confidence in the recommendations made, and the likelihood that customers would recommend an assessment to others, all increased in wave 2 compared to Wave 1. The respective figures are 78% found it useful, 82% had confidence in the recommendations and 72% would recommend it to others.
These high figures appear to fly in the face of those negative reports on Green Deal that appear regularly in the press. Whilst some of this difference could be explained away as the tendency of the press to search out bad news, is there more to it than that? Link this finding to the proportion of free assessments received – around 80%, including a large subset of assessments paid for by a related party such as a landlord – and perhaps we are seeing a small element of not wishing to appear ungrateful for a free service. All the same, figures well over 70% suggest that the Green Deal assessment service has been a resounding success.
Receiving the Advice Report
I’m concerned that only 54% of Wave 2 respondents had received their GDAR (Green Deal Advice Report) at the time of their interview, which was at least 4 weeks after their assessment visit. This is a long delay, and iIt mirrors the findings in the Which survey (see my earlier blog for more on this).
Which? also found that it could be a hard task to get a copy of the finished Green Deal Advice Report. This is in spite of the Green Deal Code of Practice requirement that the Assessor Organisation must lodge the GDAR within two weeks of the assessment and to ‘Ensure that the customer has received the final Green Deal Advice Report according to any requirements in the Framework Regulations or Green Deal Code of Practice’. If 46% of customers don’t receive their report for a long time, they will be seriously delayed in taking the next step (asking Green Deal Providers to quote). Coupled with the low proportion of customers who want to take out Green Deal finance, which we saw earlier was 16%, this delay could mean that only about 9% of customers will be looking for quotes from Providers 4 weeks after the assessment visit.
Did customers know they should receive a report?
I’m also very concerned that 28% of customers did not realise that they should receive a GDAR. Some had ‘Not seen a copy and not expecting to receive one’, an equal proportion reported as ‘Don't know/not sure’, and a few chose ‘Report sent straight to landlord/housing association and not seen a copy’. Research into the effectiveness of Energy Advice, carried out some years ago by the Energy Advice Providers Group of the Energy Efficiency Partnership for Homes, concluded that in order to be effective, advice should be given face to face and supported by a written report. Whilst the face to face element is hugely important, and it’s to the Government’s credit that they have set up Green Deal with face-to-face advice at its heart, it is the combination of the two that really achieves high levels of action. DECC must take action to ensure that all customers receive the report they are entitled to.
Prevalence of reports from Tied Advisors
Findings indicate that the installation of measures is most often carried out by the same company that did the assessment (57%). A further 15% used a company recommended by the assessor to carry out the installation (we are not sure whether the researchers are here referring to the individual Advisor, or the Assessor Organisation they work with). In total, over 70% of the improvements were the result of an assessment from a ‘tied’ Advisor. In this context, I am using this term to indicate an Advisor who has done the assessment on behalf of someone who will benefit from installing the improvements. This is completely acceptable within Green Deal, so long as the Advisor makes it clear up-front to their customer that they are tied in this way, and lets the customer know that they are under no obligation to take up the offer from the company that the Advisor is linked to.
It’s unclear to me whether we can extrapolate this figure to conclude that over 70% of assessment visits were carried out by tied Advisors. Rather, it could be that the independent Advisors had a lower ‘success’ rate, in terms of converting advice into installations. It might well be the case that providing what’s been called a ‘one stop shop’ removes some of the hassle for customers, and makes it easier for them to go ahead with the work. If this is what happened here, then tied Advisors would form a larger proportion in the group who installed measures compared to the whole population.
Tied and independent Advisors are both required to provide impartial advice, and the assessments they produce are intended to be portable. The idea is that a customer can instruct an independent Advisor if they wish, knowing that they can take the output to any Provider to get the work done. There have been reports that Providers are not currently prepared to quote against Green Deal assessments from independent Advisors. DECC need to keep a close eye on this issue of portability, to be sure that customers can choose an independent Advisor if that’s what they want.
Paying for improvements:
Finally, let’s applaud the positive result that 49% of customers who had received their Green Deal Advice Report had installed at least one measure, compared with 33% at Wave 1. In fact, the proportion overall was even higher, as some of those who’d not yet received their report had also installed at least one measure – this overall proportion was 56%. This supports the conclusion from earlier research, outlined above, that the most effective energy advice is the combination of verbal and written advice. Additionally, 6% were in the process of installing something, and 27% said they Definitely / probably will install something. Under 20% of customers were unlikely to install anything; this comprised a mix of Might / might not install, Definitely / probably won’t install, or Not made a decision yet/ measure not recommended /unknown.
It’s then interesting to look at customer’s approaches to paying for their improvements. No-one who had already installed an improvement had used Green Deal finance, but 24% of those who definitely/probably will install an improvement said that they intended to use it. To be clear, this isn’t 24% of all those surveyed. No, it’s 24% of those who probably will install an improvement, 24% of 19%, and that’s about 5% of all those who took part in the survey. It’s this 5% of Green Deal customers that will be disappointed if they cannot find a Green Deal Provider prepared to quote against their GDAR. You might conclude that this is a low proportion, but if 1 in 20 Green Deal customers are left unhappy, that’s still not a good advert for Green Deal.