Energy and Climate Change Secretary Amber Rudd said she will now “work with the building industry and consumer groups on a new value-for-money approach.”
The Government said: “Future schemes must provide better value for money, supporting the goal of insulating a million more homes over the next five years and the Government’s commitment to tackle fuel poverty.”
Existing Green Deal Finance Plans and Green Deal Home Improvement Fund applications and vouchers will be honoured.
Mark Bayley, Chief Executive, Green Deal Finance Company (GDFC) said: “The most important thing at the moment is for us and the Department to reassure those who currently have Green Deal finance plans in place and those with approved applications, that today’s announcement does not change anything for them.”
The GDFC currently has a network of 70 Green Deal Providers who carry out the work.
Bayley said: “Our network of small and medium size firms – the 70 Green Deal Providers – have done a fantastic job of making the Green Deal work.
“Our very strong growth over the past year has been driven by their efforts and investment.
“We’ve also provided over £75 million in trading lines to our small business partners over the last two years.
“My priority now is to ensure an orderly closure to new business and to fund eligible plans already submitted by the Providers.”
Rudd said: “It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.”
The move is the latest shock to the energy efficiency sector after zero-carbon homes targets were dumped earlier this month.
Julie Hirigoyen, Chief Executive of the UK Green Building Council, said: “With each passing day, this Government puts an end to another green policy.
“Government’s strategy on dealing with high energy bills through home energy efficiency is now dead in the water.
“While the Green Deal was by no means perfect, the principle of enabling households to install energy saving measures without paying upfront costs was sound.
“The irony is that the scheme was finally becoming established and the number of plans was growing.
“This is yet another announcement with no forewarning that will leave the energy efficiency industry battered and bruised.”