Lots of people will be keeping a close eye on the rate of uptake of Green Deal offers (and any customer segmentation that emerges), the effective interest rates on the financing and how these elements develop over time. This will determine how much financial incentive there is for each of the players in the combined dynamic supply chain system for Green Deal. It will also impact on the likelihood of the Government fine-tuning the rules or intervening in other ways (eg through the levers available via the Green Investment Bank) in order to achieve their climate change policy goals to 2020, 2030, 2050 etc.
There are a number of means by which quality of Green Deal work will be maintained. These include a Green Deal Oversight Organisation (due to be appointed Summer 2012) which will maintain quality standards on behalf of DECC. There will be certification for Green Deal Providers and Green Deal Installers and a qualification process for Green Deal Advisors. These processes will be followed up by checking/auditing of samples of installations (and Green Deal Advice Reports) by the certifying bodies.
A vital part of this system is the Green Deal Advisor, being the main point of personal contact for the customer, so the rest of this post focusses on this role. As well as being partly marketing, financial and technical in nature, it will also be partly like a social worker and/or benefits officer. The role will require much tact and personal sensitivity in order to ascertain (to some extent) the customer's lifestyle choices and behaviours in the home, because these are fundamental factors affecting their energy usage patterns before and after the Green Deal measures have been installed. This will therefore be a critical factor affecting whether the Green Deal Golden Rule savings are likely to be achieved in practice. An example of a possibly sensitive matter they will potentially have to deal with is that they will be expected to identify householders in fuel poverty, in order to advise them on financial support that they can access through the Energy Company Obligation (which partially overlaps with Green Deal).
Green Deal Advisors can either be sole traders or employed by an organisation offering Green Deal Advisory Services. Either way, the organisations or sole traders who wish to offer Green Deal Advisory Services will need to operate a Quality Management System (similar to ISO 9001). This will be a new challenge for many SMEs and sole traders.
Green Deal Advisors acting as sole traders do have the opportunity to lighten the burden of operating such a Quality Management System by becoming members of the Green Deal Advisor Association, for a small charge, who will operate a Quality Management System.
Green Deal Advisors will also be able to join the Green Deal Network, for a small subscription (currently being quoted as £15 per month). The Green Deal Network is intending to become a Green Deal Provider.
The main advantage of membership of the Green Deal Network is likely to be the ability of the Green Deal Network to bring together all the main elements of the Green Deal for a specific Green Deal offer in a particular locality. This might be more difficult for a Green Deal Advisor to achieve if operating totally independently.
My personal observations, comments and questions about the above:
The main potential downside of the Green Deal Network approach, from the Green Deal Advisor's perspective, is likely to be the recurring issue of independence if they are seen to be a marketer and promoter of only the Green Deal Network as the Green Deal Provider.
One of the matters that is not yet clear is how Green Deal Advisors will get paid. If operating as an independent sole trader, it's likely that they will invoice the customer a straight fee separately from all other Green Deal financial arrangements and be paid directly by the customer, therefore representing an up-front cost for the customer to take into account.
It's entirely possible that some Green Deal Providers might try to induce customers to use their own in-house Green Deal Advisors (rather than independent sole traders) by bundling up the Green Deal Advisor's fee into the Green Deal finance package in some way, therefore spreading the cost over the lifetime of the package - something the independent Green Deal Advisors are unlikely to be able to do. What price or value will customers put on the independence of the Green Deal Advisor? Will they be prepared to pay up-front for that independence? Will many independent Green Deal Advisors be able to make a satisfactory living when competing against much larger organisations active in this space? These are all unanswered questions at this time.