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To Green Deal or Not To Green Deal

Tuesday, 11th March 2014

Categories: Miscellaneous

Author: Katy Huke

Whilst many of your LENT sacrifices will consist of kicking the smoking habit, or drinking less – how about considering a resolution within your property that could potentially help save the planet? Over the next few months I will guide you through the latest government initiatives, as well as Peter Barry’s own useful tips on keeping your home eco-friendly.

Let’s kick off with the Green Deal: For those of you who haven’t yet heard of the green deal, you might be surprised to hear that it is the largest home improvement scheme since World War II. It was kick started in January 2013, and comes as part of the 2011 Energy Act. The government’s aim is to make millions of homes and businesses across England more energy efficient.   

How do they plan to do this? If you do decide to take part, you will be given a Green Deal Assessment – this report will layout the necessary eco changes before they go ahead, which will come at a one off fee of up to £150.00. Bill payers can borrow the money from one or more of the Green Deal providers who can then arrange and fund the improvements. There are about 45 different measures that can be taken, these include insulation, glazing and micro generation (generating your own energy.)  The money will then be paid back over 25 years.  

The Golden Rule: The most obvious hesitation at this point is why anyone, especially given the current economic climate, would want to put themselves into more debt by borrowing large amounts of money?  However, the guarantee is that the money paid back will never be more than the saving made e.g. if wall insulation saves you a hundred and twenty pounds a year, you will never pay back more than a hundred and twenty pounds a year. Additionally the money is not paid back directly to the lender, but added to the property’s energy bills. The person in charge of the energy bills is therefore responsible for repayments (even if the property changes hands), so the loan is always tied to the property not the owner.   

To put it simply - the bill payer saves their money, whilst creating a home which contributes to creating a more eco-friendly Britain.

Headlines: In theory then, this seems like a rather idyllic set up. So why haven’t more people heard of this scheme? More importantly, why has the Green deal been hitting the headlines for negative not positive reasons?  According to David Symons, at environmental consultancy WSP, the government needs to “up the ante” to make the scheme a success. “We’ve hit a plateau of around 13,000 homes entering the green deal process every month, which isn’t anywhere near enough to make it the transformative programme it could be. This is something we all want to happen.” The marketing of the scheme has also been very poor. Restrictions on the promotions budget has meant that if you are not aware of the scheme, you are one of the very many. Furthermore, police and trading standards have warned that fraudsters are currently trying to scam homeowners, by claiming to be a part of the green deal scheme; asking for the fee, and then not turning up to carry out the assessment. Last but not least, interest rates of around 7% can apply for householders who to decide to take out a loan, meaning the money can soon add up.

To deal or not to deal?  To conclude, whilst the idea machine behind the deal seems to be generating at full speed, the organizations putting this in to practice, appear to have clogged up and slowed down (as seen below).

Paul King, chief executive of the UK’s Green Building Council, said: “Government must recognise energy efficiency as a national infrastructure priority and be prepared to delve into its purse to make its flagship policy more appealing through stronger incentives and more attractive finance options.”

Nevertheless the Green Deal does come with good intentions, and like any new scheme, it can only be based on trial and error. Perhaps over time the problems it faces can be counteracted and the operation can run in a much smoother manner. The deal will need to keep looking at the watch though, if Labour win next year’s general election the whole scheme will be scrapped!