The Green Deal offers some fantastic financing options for households across Britain looking to improve the energy efficiency of their home, but it is also misunderstood.
With that in mind, this guide examines the top Green Deal myths to set the record straight.
Myth #1: It will drive my bills up
At the top of our list of Green Deal myths is the idea that it adds costs on top of energy bills.
While factually accurate, this is an oversimplification that misses one very crucial point – the upgrades paid for by the Green Deal will cut your bills.
Whether it be insulation, draught-proofing or glazing, energy-saving upgrades result in less energy used overall, and hence lower bills. Now, your loan will add costs on to your bill, but over time the two should even each other out and you will begin to make savings.
Myth #2: I’ll owe more than I save
This is the crucial calculation and where a lot of people get worried about the Green Deal, but crucially the amount you repay, and hence the term of the loan, is directly linked to your savings.
This means that if your energy bills are, say, £200 a year, and you install insulation, saving you £100 a year, the cost of that insulation will never be more than £100 a year, and hopefully less than that.
That means lower or similar energy bills, even after the loan is added. The crucial caveat is that the savings figure your energy upgrade will deliver is nominal, not actual, as it will be estimated in advance. This means that in some circumstances this calculation may be slightly off.
Myth #3: It’s only for insulation
Another huge myth surrounding the Green Deal is that it’s only for one very obvious form of energy-efficiency upgrade – insulation.
This is because loft insulation in particular is one of the most basic energy-saving upgrades, is affordable, and applies to a lot of people, but that doesn’t mean that it is the only solution on offer.
A Green Deal loan could also pay for: double-glazing; draught-proofing; a new boiler; heating controls; solar panels; and underfloor heating, as well as many others.
Myth #4: Assessments are unaffordable
One of the difficulties of getting a Green Deal loan is the fact that your property needs an assessment first: after all, you need to determine what energy-saving upgrades you need, how much they will cost, and how much they will save you.
Unfortunately having an assessment done can cost as much as £120. It is therefore a good idea to do a quick check yourself to see if there are any obvious areas for improvement. For example, if you don’t have any loft insulation or double-glazing, and the edges of your windows and doors have a draught, it is clear you could benefit from some energy-saving investments.
You can also, in some cases, get your local authority to cover the cost of the assessment, so give them a ring. Likewise you may be able to get the cost back. If your assessor also does installations and you choose to use them, they may refund you the assessment cost, but make sure you get a few different quotes first.
Myth# 5: The loan is linked to you
Another common misconception around the Green Deal is that the loan is somehow linked to you personally. This can cause some confusion as, if you move out of your property and are no longer there to benefit from your energy-saving upgrades, what’s the point in paying back your loan.
That’s why the Green Deal loan is linked to the energy bills of your property, not you. If you move out they are passed on to the next tenants, which can therefore become a consideration when selling your property.
Myth #6: It doesn’t benefit those on low incomes
The Green Deal was launched alongside something called the Energy Company Obligation or ECO, a deal reached between the government and the UK’s big energy suppliers which required them to contribute.
The ECO scheme requires the big six (British Gas, SSE, E.ON, EDF Energy, ScottishPower and npower) to provide money to lower income properties to help them fund insulation and heating upgrades.
The ECO scheme also provides money to those living in older properties, so if you are considering solid-wall or cavity-wall insulation you may also get assistance.
If you are on a lower income the Energy Saving Advice Service may be able to help. Give them a call on 0300 123 1234 to see if you are eligible for Energy Company Obligation (ECO) benefits.
The full eligibility criteria depend on whether you are elderly or have children, but if your income is under £16,000 you may be entitled to support.
Myth #7: All costs are fixed
This is completely incorrect, the government launched the green deal scheme and helped provide the funding, but at the end of the day any energy-saving upgrades you undertake will be offered by private companies.
As such every cost, from the assessment to the installation of the upgrades, will vary from company to company (all should be qualified and carry the Green Deal Mark), making it imperative that you get a number of quotes to ensure you find the best deal.
Myth #8:The Green Deal ties you to one energy provider
This is one of the most damaging myths around the Green Deal and is completely incorrect.
The Green Deal is a loan tied to your electricity bill, but just because it is linked to the installer doesn’t mean you can’t take it with you.
Those on a Green Deal can, and should, compare and switch energy to take advantage of the cheapest rates.