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Green Deal Q&A – your questions answered

Everything you always wanted to know about the Green Deal but were afraid to ask…

January 28th marks the beginning of the coalition’s Green Deal, which will see properties across the UK offered government support to increase the energy efficiency of their home and help to lower energy bills.

It is hoped the scheme will help millions of homeowners and curb rising energy bills, while improving the sustainability of properties across the UK, which will benefit current homeowners and future generations alike.

How does it work?

Properties will first be visited by an assessor, after which an approved Green Deal partner will make recommendations on how to improve the efficiency on the home based on the person’s initial responses.

These could range from the installation of double-glazing and insulation to new heating systems, the cost of which will be met by taking out a loan with the Green Deal Finance Company.

This not-for-profit organisation is backed by the government and will see loans repaid through electricity bills over a period of 25 years.

How much will I save?

The government has stressed that there is no guarantee that the savings will match or exceed the cost of the loans they take out to make the initial improvements, but industry experts estimate that it is likely.

According to the Department of Energy and Climate Change, those who wish to take out Green Deal loans will repay them at a maximum rate of 6.92%, with the amount people can borrow capped at £10,000.

What if I lose out?

The coalition has been keen to play down the possibility of people failing to make the expected savings, as it is widely expected that energy bills will rise in the years ahead, rather than fall.

Mark Bayley, chief executive of the Green Deal Finance Company, says: “What makes it work is that the experience of energy companies is that people’s default rate is very much lower than the experience in consumer credit and that’s how we’re able to construct very long-term, low-cost financing.”

What if I move house?

If property owners decide to sell their house, the loan will have to be taken on by the new homeowner.

As people move home the loans they take out under the deal will stay behind in the same way their electricity meter will.

green dealWill it be enough?

The government is confident that the Green Deal will be a success and has taken steps to assuage the fears of those who believe energy bills will not be as heavily impacted as has been suggested.

A key concern among campaigners is that the Green Deal will not go far enough to protect people from energy price rises as the cost of wholesale gas continues to escalate.

According to the fuel poverty campaign group Energy Bill Revolution, the prime minister needs to use money from the carbon tax to super-insulate homes across the country.

“This will provide households with five times more subsidy to insulate their homes and not add a penny more to energy bills,” the group added.

Are there any other benefits?

A major perk of the initiative is that it will boost the economy on several fronts, including through the creation of new employment positions, according to deputy prime minister Nick Clegg.

He added: “The Green Deal will support thousands of jobs, not just over the next few years, but in the long term,” before noting that assessors and Green Deal partners will benefit just as much as the homeowners they are assisting.

Is it popular?

Initial reports suggested that just a handful of households had booked assessments ahead of the scheme launching, but this has been shot down by the Department of Energy and Climate Change, which claimed “hundreds” more properties than expected had signed up to take part and begin benefitting from lower bills, though official data has yet to be published

Am I protected?

The government has taken steps to ensure that homeowners are not left exposed by changes to legislation, nefarious practices or unreliable partners.

Installers need to be authorised to meet high standards, while clear obligations on Green Deal participants have been implemented to ensure they operate within a robust Code of Practice.

Current legislation governing mis-selling, unfair trading practices and consumer credit agreements will protect homeowners, while any charges collected will be taken through energy bills, which are regulated by Ofgem.

Transparent processes also need to be followed when a property changes hands, while consumers need to be informed if they are required to pay the plan off early.

Where can I find more information?

Full instructions on how to book a Green Deal assessment can be found on the government’s dedicated Green Deal channel.

Further details can be obtained by calling the Energy Saving Advice Service on 0300 123 1234 or Energy Saving Scotland on 0800 512 012.

  • Good to see someone debunking myths and being very informative about The Green Deal – there’s far too much cynicism and criticism surrounding The Green Deal. I think it will be a success but it’s just going to be a bit slow…

  • Rob Desbois

    I didn’t previously know much about the Green Deal, but although I am keen to support improving the sustainability and eco-friendliness of the country, I can’t see how attaching a loan to our home that must be accepted by any future buyer makes sound sense; as far as I can see it will reduce the desirability of the property resulting in it being harder to sell and likely being sold at a lower price than it would otherwise.

    If this is the case then I imagine that only those who can foresee staying in their property for some considerable period will be likely to take one of these loans. Please tell me there’s something I’ve missed or misunderstood!

  • Smithy

    I am Really interested in this green deal and have read loads of information,and it all comes down to a golden rule that your savings on energy bills per year cannot exceed the finance charge per year , so if the energy savings of new windows installed was 90.00 per year then your total green deal finance loan would be 2250 !!! not enough to cover the cost of new window installation? confused