The Green Deal scheme is the Government’s flagship energy programme which is hoped will radically change the way people insulate their homes. Under the guidelines there will be loans available for energy efficient products such as double glazing and replacement boilers.

  • Homeowners will be able to receive loans of up to £10,000 for energy efficient products which will help cut heating bills and make the property environmentally friendly
  • The loans will then be paid back with the money saved on energy bills
  • The loan will be attached to the property and not the owner, so if you move home you won’t have to carrying on paying out for a product you don’t benefit from
  • But there are fears some will pay back more than they save, with rates worked out on a national average rather than an individual basis
  • And you could find it harder to sell your home with a loan attached to the property


Five Green Deal questions

1. What will the Green Deal interest rate be?

There have been many figures floating around with six to eight per cent highlighted as the most likely. It appears ministers prefer a 7.5% but it could be lower if the Government take the advice of the Green Investment Bank to lower subsidies.

2. Will interest rates put people off taking part?

Despite the Government’s insistence that interest rates will not prove a stumbling block for the uptake of the Green Deal, surely someone taking a £10,000 loan won’t want to payback £22,000.

Of course, not many will take the full loans available. But even so, the high interest rates mean that energy bill savings are restricted, after the loan repayment has been taken out monthly.

3. What will happen to the initial £200m funding for the Green Deal?

The incentives available for homeowners will essentially dictate how successful the scheme is. £200m will be in the bank to support initial participation and there have been hints of a cash-back scheme.

But with just three months until the scheme comes into action, it’s confusing that the Government don’t have a detailed plan of how to entice homeowners into making the green switch.

4. What is the ‘golden rule’ and is it secure?

The golden rule of the Green Deal is helping people to make energy bill savings. This means they’ll have to save more than they pay back monthly to cover the loan. The Government are certain this will hold out and as energy prices rise in the future this will be made increasingly possible.

However, this can’t be guaranteed. By covering the cost of installation yourself, you won’t be subjected to monthly repayments and instead can benefit from full energy savings – up to £300 a year with double glazing or a replacement boiler.

5. Will businesses be attracted by the Green Deal?

The Green Deal has been designed as a domestic scheme, but it’s still open to businesses who may see the attraction of making commercial buildings more energy efficient. It offers a quick way of cutting carbon dioxide emissions for starters.

Some companies will be offering business based Green Deal opportunities in the coming months and there have been claims that the Green Deal will not only appeal to smaller businesses but also large retail based firms.
Quotes for replacement boilers

The Green Deal won’t be for everyone and many opt to install energy efficient products themselves rather than go onto finance schemes.

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