On Friday, I was lucky enough to attend this months DODS Green Deal Roundtable meeting, sponsored by the GGF.
These meetings have been created with the aim to get everyone involved in the Green Deal to sit down, talk about the issues that surround the scheme, try and discuss solutions and generally gauge opinion on the Green Deal itself and help to move it forward ready for when it is launched.
To try and make sure that this post doesn’t overrun into thousands of words which it could quite easily do, I’m going to try and condense it down to the most important comments, bits of evidence and opinion otherwise you’ll be here way too long than you have to be! So here I go…
The day started at 1pm with registration and lunch:
As the Green Deal isn’t just about windows, other organisations like British Gas and Councillors were there from local Government representing their corners in the whole scheme. After a bit of quiet mingling and sandwich eating, we were all ushered into one of the main conference rooms and took our seats in front of the panel which included Giles Willson – GGF Deputy CEO and Director of Technical Affiars (who was actually on both panels! He must have been just a little bit bored by the end of it all!), George Marsh and Paul Bogal.
It was clear from the outset that the one major underlying issue of this panel session and the one to follow was the threat to SME’s. The one big drum all of us have been banging for quite a while now. All of the panel made sure to acknowledge to the audience that they knew the SME issue was the one playing on most people’s minds. But honestly, up until the mid-afternoon break, I never really heard some concrete solutions. We were told that the DECC, the schemes champions, knew that we all had issues, but were really waiting for the industries to come to them with the solutions to the problems we had identified!
When Giles Willson was given the opportunity to speak, he mentioned a few pressing issues i.e. proving that someone is competent to take part in the scheme and how is it going to be made sure that those passing companies for competency are themselves being made sure they’re doing the right job. He also pointed out their membership, as well as the industry as a whole, is worried that the ‘Golden Rule’ – to make sure the cost of the home improvements are paid for by the savings made in their energy efficiency – will not work.
From a glazing industry point of view, the session identified quite a lot of negative points and things which the industry will find very easy to sell against. The Green Deal loans have a high interest rate which in this sort of climate is going to be putting a lot of people off. A lack of trust for double glazing companies is going to mean that very few will feel confident about going with the scheme from a window company. The industry feels deeply that the those in Government are simply not listening to the industry at all. Many SME’s aren’t even sure on how the whole Green Deal process works from start to finish. Councillor Andrew Cooper made the point that there is simply not enough urgency at this moment to tackle the many issues at hand. We have just 3 months until the ‘soft launch’ in October and only a few months after that until the Government wants to really get going with it. Then there is VAT. From the feedback I listened to, it seems that lowering the VAT for windows is well out of the question now. Not only because the Government really doesn’t want to, but also because in the last week thr EU has announced that the lowering of VAT on other home improvements is actually illegal and will probably have to put them all back up to 20%!
It was a good session but only really served to prove the industry’s skepticism correct. So we all broke for tea and coffee at that point. At 3:40pm it was time to go sit in on the Domestic breakout session.
This last chunk of time was dedicated for those involved primarily in the retail sector. To those companies sitting down in front of the customer and trying to sell the idea of the Green Deal. Honestly, I think I was the only sales rep there! This session really followed the same track as the last one. The panel (one or two new people on this one) focused on the problems they had in getting the message of the Green Deal out there to the public during their pilot schemes. And one example given by British Gas representative Mandy Findlay. Of the pilot schemes she talked about, she reported very low turnout. To be expected I hear you all say. Well yes maybe, but this result is compounded because out of the all the measures, the free ones like home insulation were the most popular and even these had a very low turnout! Come on, if you can’t even get people to sign up en masse for the FREE stuff, what chance do we have in trying to flog thousands of pounds worth of new windows and doors at high interest rates?!
A lot of new questions were raised in this session that maybe weren’t thought of before. How do you market a new home with a Green Deal loan attached? Can you pay a loan back via rent if you live in a rented property? Could landlords become Green Deal Providers? Will there be education on general energy waste? But one thing that caught my eye, with my business head on, is cash flow.
One of the biggest problems for SME’s I can see is the poor cash flow. When a job is complete is has to be signed off before the installer gets the money to cover the loan the customer has taken to pay for the windows. But, early indications are showing that installers could have to wait up to 45 days to get their money from their Green Deal provider! I’m sorry, that is just way too long for small businesses to be able to cope with. It goes way beyond the standard 30 day credit limit that most have with their suppliers. Fitters and the rest of their staff have to be paid. This is going to leave the cash flow in a serious problem. 45 days to get your money is simply way too long and a solution would definitely have to be found.
One thing that became clear from this session is that there is going to have to be one hell of a marketing job to make the public aware that this scheme even exists! Of all the pilot schemes discussed at the meeting, all reported low turnout despite quite active marketing campaigns to get people interested. I got the feeling that the DECC is relying on us to get the message out there to people, but with trust for double glazing companies so low, I doubt that this is going to be effective.
So say we get all the internal issues worked out (which is highly unlikely but still…), the chances of us selling any windows under the Green Deal to customers is slim. The thought of a long drawn out process, a long term/high interest loan attached to the house, a lack of trust for the industry and so on is going to make it a very hard sell. According to Giles Willson, he believes that the traditional means of selling windows will remain the main one, Green Deal or not.
Gauging opinion from those I spoke to, doubt that the Green Deal will be good for our industry I think grew. Which, I don’t think is a bad thing. Companies will be wanting to know more and more so they can make an informed decision as to whether they will be taking part in it or not. For me, I don’t think we will be. There are far too many negative points to sell against. Too many reasons still exist for this scheme not to work.
Friday was a learning curve for me. Those sorts of meetings give you a good idea about the scale of things like this. Why they take as long as they do to make sure they work when they go to market. It was a good day overall, productive in the way that more people will now have decided if they are taking part or not. So after reading this, why not take part in my poll now on the right hand side?
Hopefully I have been as concise as possible and tried not to cover the same ground as I have in previous posts. If there is anything new in this post, will this sway your decision to take part in the scheme now? Later on in the week I will be posting the full ELEVEN stage plan which details how the schemes in a real scenario.
Thanks for reading!
Thanks for the summary. Brilliant to get info to keep us up to date for those of us who couldn’t attend. Keep up the good work!
All our members are kept up to date with “developments”, which is what all Federations should be doing. We have tried to interest DECC with a voucher scheme which MIGHT overcome the SME problem; and it is a REAL problem, which will not be solved when you have the current model of operation. Unfortunately to no avail; we can’t even get on a committee to discuss it! Large PLCs are the only structures which will be able to deal with all the paperwork as “Providers”, as it stands, and take all the risk. If anyone cares to read the pages… Read more »
Maybe we just buy shares in TESCO and Next and sit at home waiting for the dividends.
Jobs can not be registered with FENSA if you are not dealing direct with customer, so it is only TESCO etc which can do the work, and cash flow will not matter to them.
Or we do what we do best, keep local customers happy and they will always buy from a local company, windows when they want to and Heating system etc when they want to.
What a mess !
Thanks Jason for a decent summary of Friday’s event and I am pleased you got so much out of it. As you are aware, the GGF attends many Green Deal meetings and events and is in fact a sponsor of Dods Green Deal Dialogue (including Friday’s Business Summit). As well as the Green Deal Dialogue, the GGF has over the last two years, engaged in discussions at every level with Government, opened dialogue with many potential Green Deal Providers, related trade organisations and energy companies. We have also listened intently to our Members throughout and in particular at 3 GGF… Read more »
So your name’s Jason…
James thinks so ;)
Some useful updates. Our latest blog updates installers on the green deal and how they can get certified through FENSA