The Green Deal certainly has great potential. But as governments in other countries have learnt, removing the up-front cost of insulation and other energy efficiency measures doesn’t mean that people will install them.
One American study of over 150 energy efficiency loan schemes in the US found that most of the programs reached less than 0.1% of their potential customers in 2007. Not quite game-changing.
Neither carrot nor stick
The problem is that a loan for energy efficiency is neither a carrot nor a stick for householders. It only removes a financial barrier. To get widespread take-up of the Green Deal beyond a small engaged minority, government knows that it needs to design a scheme that works well, but also put measures in place to drive demand for it using “triggers and nudges” as Chris Huhne says.
There are many possibilities for driving demand, including stamp duty rebates, regulating private landlords or linking the Green Deal to the roll-out out of smart energy meters. A combination of all of these types of measures is probably needed.
The importance of branding
But there’s one lesson coming out of American versions of the Green Deal that has so far received little attention. It is this: the way that energy efficiency schemes are branded matters.
According to Richard Cowart, director of European Programs at the Regulatory Assistance Project, a US-based best practice network, one of the main lessons from American experiences is the importance of “building sustained, powerful brands to build consumer recognition and trust.”
In California, which has one of America’s largest energy efficiency schemes, utilities, businesses, charities and government agencies all use the brand ‘flex your power’. They use co-branding, e.g. “Flex your Power: Pacific Gas and Electric”, to help gain consumer’s trust and understanding, and increase take-up.
So will we get a common brand for the Green Deal in the UK? Current talk is about accreditation marks, which are not the same as a brand. Benefits of having a proper brand could include:
When polled by WWF on who they would trust to deliver the Green Deal, 46% of respondents said the local authority, 28% said a local provider such as builders, 31% and 28% respectively said electricity and gas companies, and only 9% said they would trust a supermarket or retailer to deliver the Green Deal to them.
Energy companies admit that they suffer from a lack of public trust, and while supermarkets may be trusted to sell food, the WWF poll suggests that this doesn’t transfer automatically to trusting them to upgrade homes. This is why several companies we have spoken to are keen to have some form of common independently-backed brand.
The competitive roll-out means that, hopefully, businesses will compete with each other to sell the Green Deal. But consumers will also need the assurance of someone they trust, who is not trying to sell them something.
According to the branding agency Interbrand, we are bombarded with so many messages on sustainability from different places and for different products that we don’t know where to start. This is backed up by psychological research which shows that given too much information people often “choose not to choose” and do nothing.
A single unifying brand would make the green deal much easier for consumers to understand. All they need to take in to start with is the core premise – “this will help you save energy”. They won’t need to understand the details of different companies’ offers straight away. On energy efficiency many people’s default is to be fairly uninterested, so a simple brand and proposition could help stop people becoming confused and giving up.
Avoiding the rebound effect
The carbon savings achieved by upgrading boilers or insulating lofts can be undone if householders use the money they save to fly on a mini-break to Spain or buy a 50″ TV. This is a real problem if the overall aim is to reduce carbon emissions rather than simply to upgrade homes. A common brand could go some way towards solving this problem. This is because over time other activities, such as flying or driving less, could be incorporated into the brand.
In Queensland, Australia, the government’s climate change mitigation work takes place under the Climate Smart brand. There is a successful Travel Smart scheme, a new Climate Smart Home service (under which all the home water and energy efficiency work is done) and an overall Climate Smart Living brand for their behaviour change work.
In the UK other initiatives such as Feed in Tariffs and smart meters could be added to the brand, as could future policies on low carbon transport, for example. This would help draw the links between different issues.
There is a large body of research which shows that tapping into the power of social norms is a crucial way to increase the spread of desirable behaviours, in this case saving energy.
If there is a common brand people will start to see it around them, and notice that others are taking up or offering it – through seeing energy company vans with the logo on them, having branded stickers on windows, or seeing adverts in the media etc. If there is not a visible shared brand there’s a danger that all people will see is a clutch of disparate companies selling insulation.
Clearly there’s not much money in the public purse, so an expensive government-led brand development exercise wouldn’t make sense. But some of the businesses and NGOs that government is working with on the Green Deal have some of the most recognisable brands in the world.
Could their expertise be harnessed to create a strong common brand for the Green Deal?