Green SMEs could be left stranded as Government’s Green Loans scheme flounders

A small army of green SMEs conducting energy assessments under the Government’s Green Loans scheme are being forced to scale back their operations after a major audit of the project was announced yesterday.

The scheme was designed so households could receive an assessment of their energy usage showing where energy efficiency can be improved. The Green Loans scheme would then allow residents to take up interest free loans provided by the Government to fund these improvements.

But while the 360,000 assessments funded by the scheme were expected to take four years to complete, it is estimated they will be completed by April, potentially leaving the hundreds of new companies created to perform assessments in the lurch.

Tom Buckley, managing director of Green Home Loans Australia, says he faces the possibility of scaling back his business if the scheme is not extended.

“We always knew it had a limited lifespan, but this is beyond that. I think the two big issues aren’t the incompetence, but the lack of direction and communication and allowing this scheme to blow out.”

Buckley’s company is only one of hundreds which have been credited as official assessors under the scheme. But while the Government initially thought under 1,000 assessors would sign up, that amount has blown out and been capped at 10,000, with many still waiting for approval.

The scheme works by having assessors arrange an audit with a household, followed by a call to a Government agency in order to receive a booking number which guarantees payment.

However, Buckley says another major issue is the waiting times associated with the scheme. Assessors need to book in their projects with the Government once an assessment has been made, but the popularity of the scheme results in long waiting times.

“We’ve struggled on the phones for up to six hours many times. And of course the Government will say there has been no guarantee of work, but this is especially frustrating because we do have the work and we’re restricted because we can’t book it in. This is frustrating.”

It is understood many other small businesses built around the scheme have encountered difficulties booking in work which has already been arranged. Buckley says his business is at risk due to the uncertain future of the scheme.

SmartCompany attempted to contact another company which operates assessors, Alpha Green, but was told managing director Fraser Clayton is in Canberra attending meetings in Parliament.

Buckley also notes the unusually low take-up of the Green Loans on offer, which can be used to install equipment such as solar panels and water tanks, among other recommendations flagged by the assessments.

Only about 1,000 of the 75,000 loans have been taken up, which Buckley says is a testament to the scheme’s lack of organisation.

“I’ve got customers from last October still saying they haven’t received their report, so I’d suggest that’s a large reason for the low take-up of loans.”

The audit announced by environment minister Peter Garrett yesterday could flag the end of the scheme, or at least a major restructuring.

Businesses in the sector are desperate to find out if the Government will fund more assessments and Buckley says any drop off in activity could severely hurt his business.

“We’ll have to scale back our operations if it doesn’t go on. We’ve put a lot of money into this business, and the scheme overall is fantastic. But it’s just so frustrating now because it’s impossible to book in the work we already have.”

Garrett acknowledged in a statement yesterday the scheme has not been working as planned, and changes will be made. PricewaterhouseCoopers will conduct an audit on the Association of Building Sustainable Awareness, which the Government reportedly believes is responsible for the problems.

“It is clear that some elements of the program are not working as effectively as they should,” Garrett said. ”In particular, it is clear there is room for improvement in relation to the call centre for assessor and householder bookings as well as to speed up the issuing of household assessment reports.”

However, ABSA said last year it warned the Department of Environment about the growing number of assessors.

Garrett has said the inquiry will address contractual agreements and the processes involved in the drawing up of the Green Loans program. Additionally, long call centre wait times are also to be addressed.

The inquiry comes after the Government’s solar and insulation rebates have come under attack due to reports of rorting. This morning Garrett announced the suspension of aluminium foil being used as part of the insulation program due to safety concerns.