Low uptake of the green deal: examining financial, decision-making and awareness reasons

Abstract

The Green Deal was part of a strategy to tackle climate change by reducing home energy use. It operated in the UK from 2013 to 2015, but uptake of the policy was very low. Energy efficiency policies usually advantage homeowners over tenants and landlords. Therefore, it is important to analyse the differences in uptake and the reasons for low uptake across sectors. This study examines which role financial incentives, decision-making and awareness play in inequality of uptake of the Green Deal, compared between the privately rented and owner-occupier sectors and between student landlords and the young professional landlord market. The study uses qualitative interviews, a survey, and documentary research to address the research question. The conclusion is that financial reasons are very relevant for understanding why uptake of the Green Deal was lower in the privately rented sector than the owner-occupier sector, and the student rented sector than the young professional rented sector. I found that the Green Deal finance was too expensive for customers in general, but that people in the privately rented sector found it more difficult than owners to access loans under the scheme. One of the novel findings from the study was that student landlords focused on rental incomes and believed that Green Deal improvement would not increase their rental incomes, but young professional landlords focused on capital gains and understood that Green Deal improvements would slightly increase their capital growth. Decision making reasons are very important for explaining the inequality of take-up of the Green Deal across sectors. The requirement for consensus between landlord and tenant in the rented market not exist in the owner-occupier market. I found that it is more difficult to reach consensus in student rented market than in the young professional rented market because the student market is made up of more transient and larger tenant groups than the young professional rented market, which contains fewer tenants who plan to stay for longer. It is less clear how important awareness reasons are to explain the difference in uptake of the Green Deal across sectors. There were equal levels of Green Deal awareness between the privately rented sector and the owner-occupier sector, and between the students rented market and the young professional rented market. I found that tenants are not interested in energy efficiency when renting, but owners consider energy efficiency in their buying decisions. Therefore, owner-occupiers might be more willing to act on their pro-environmental attitudes than landlords and tenants. Equally, environmental attitudes of different types of landlord are potentially relevant in explaining difference in uptake of the Green Deal in the student rented market and the young professional rented market. Landlords in the young professional rented market might be more willing to act on their pro-environmental attitudes than landlords in the student rented market, as the former’s motivations to rent out their properties are based on long-term enhancement of capital value, as against the latter’s motivations based on short-term profit.

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