/ Home & Energy

A ‘Green Deal’ or a ‘very confusing deal’?

Man with energy monitor on forehead

You might have heard about the government’s Green Deal. It’s an energy efficiency scheme launching in 2012, and means you won’t have to pay the upfront costs of installing energy-saving measures. But what’s the catch?

After a sales pitch from your energy supplier, a supermarket, or your local ‘green deal assessor’ you might be tempted to take up the ‘Green Deal.’

Someone will then visit your home and recommend a package of energy efficiency measures, such as loft insulation, a new boiler or solid wall insulation.

No such thing as free money

However,  as Drew Richie commented in a previous Conversation, it’s not free money – you do have to repay it (plus interest) over time. The difference between the Green Deal and other home improvement loans is that your monthly repayments should always be lower than the savings you make on your bill. But the government can’t guarantee this, it’s only an estimate.

It’s also not technically a loan, since if you move the Green Deal stays with the house and the new owner will take it over (in theory).

But we think the Green Deal needs more measures to protect consumers, and we’ve been feeding our views to the government’s Department of Energy and Climate Change (DECC). We’re all in favour of lower energy bills, but there are still lots of questions to be answered.

Many confused by the deal

When we discussed this in March, commenters seemed worried about the practicalities. Some raised concerns about cowboy builders, and others wondered how estimated savings would be calculated. We wanted to follow this up and get your reaction to some of our key concerns.

It’s not as if the Green Deal is the first scheme of its kind – many people haven’t taken up loft and cavity wall insulation yet, even when they’re widely available for free or at heavily discounted rates.

The reasons are many: worrying about the cost and how long it will take to pay back, not knowing where to get advice that you trust, the hassle involved etc. Who can say these same problems won’t affect the Green Deal?

Risk of people being ripped off

We’re also worried that if the assessor is tied to the Green Deal provider – say M&S or British Gas – they might not advise you to buy what is best for you, but rather what is best for them.

If the Green Deal is a government scheme, then DECC needs to make really sure it doesn’t open doors for unscrupulous companies to sell unnecessary energy saving products.

So, please tell us what you think. Is the Green Deal something you would be interested in or does it sound too complex to bother? Would you be put off if a house you were buying came with a Green Deal ‘charge’, or would it be a plus point?


There is an awfully large percentage of UK homes which are very energy inefficient. Energy won’t be getting cheaper anytime soon so something will have to be done.
Anyone can get heavily grant subsidised (or even free) loft and cavity insulation which would save them a small fortune over time, but its surprizing how many people still don’t go for it. Scare stories about CWI causing damp, poor quality installation and even the reluctance of people to clear their loft of junk may be some of the reasons. Or perhaps Gas and Electricity just isn’t expensive enough yet for people to take notice, but give it a year or two, it will be.
Bigger ticket improvements like solid wall insulation, heat pumps, new boilers etc. although already state subsidised to a degree still leave the home owner with a very hefty cost to cover.
A “Green Deal” loan could work provided the terms are correctly worked out. But there has to be an immediate benefit to the home owner or people just won’t go for it.
I think linking the loan to the property is a good fist step. People who move don’t have to carry the mill stone of a loan with them. Next I’d suggest allowing the home owner to keep say half the energy bill savings and use the other half to repay the loan. An incentive, without which why would most people do it, there would be no immediately visible gain?
Problem is if only half the saving is used the Green loan repayment period might be longer than the life of the new energy efficient installation, so that might not work unless this is overcome by there also being more state subsidy and very low repayment interest. I doubt that will happen.
Then there is the issue of installers captitalising on this initiative. An example being the recent boiler scrappage scheme. “Approved” outfits like British Gas would install a new boiler for well over £2000 then say £400 is knocked off the price through the scrappage scheme, but a “non-scheme-approved” independant Gas Safe plumber could often install for £1500 or less without any £400 scrappage allowance?
Regretably the only spur that will really get many many people to start taking notice and improve the energy efficiency of their homes will be ever increasing energy costs and without help that will hit the poorest and most vunerable very hard.
I hope the Government gets the “Green Deal” detail right so there is incentive, improvement and fairness for all, but based on track record to date I expect another less than fair and poorly thought out “Green wash”.
I hope I’m wrong.

Interesting – This in effect the same deal as PFI (the deal to pay for rebuilding our schools) that this “government” decided was “expensive and inefficient” and so new school building was scrapped with enormous effect on Councils and school children

But somehow it is fine to use the same system – without guarantees or clarity – to “Green-ise” homes.

If we have to rely on the Private Sector cowboys then it will just be another waste on our money, as the un-educated will be taken for a ride and everyone else will keep well away.

My cavity wall insulation double glassing and loft insulation are all more than thirty years old. I will soon be in my seventies.
Although my house in theory is energy effective does the Green deil recognise the useful life of say double glassing?

Jack says:
12 June 2011

We have fitted energy saving bulbs(can hardly see), new combi boiler had loft insulated, cavity wall insulation, bought pressure + slow cooker cooker, mini oven+mini grill, stopped using the tumble dryer (house always damp!), etc and still my energy bills are very very expensive! What a con! Struggling on pension and bills are still due to be hiked! Not looking forward to winter!

Owen says:
17 June 2011

Contact the Energy Saving Trust for free advice on saving money on bills etc. They will be able to tell you how to best use the energy saving devices and efficiency retrofits you’ve purchased. Or they might be able to tell you whether the energy company is ripping you off…

‘many people haven’t taken up loft and cavity wall insulation yet, even when they’re widely available for free or at heavily discounted rates.’

Nothing is ‘free’ if you are a wage -earner bill paying householder,
only the benefit earners get it free.

Payback on wall insulation on a house with two real brick skin walls is beyond my life time.

Billy says:
1 December 2012

I had my semi loft insulated and cavity wall insulated 5 years ago (already had double-glazing) and it cost me a (subsidised) £200. I reckon I’ve already had payback on that. The upstairs heaters are never turned on as enough heat rises from below. My thermostat is set at 20 deg C during the day (I’m retired and home most of the day) and 16 deg at night. As an aside, what does annoy me are the constant junk mail posters that leave leaflets halfway through the mail slot letting in freezing northerly component wind, which kicks off the heating, adding to my bill. They take no notice of requests to refrain from doing so. The postman and the paperboy/girl always make sure the mail/paper drops on the mat, why can’t the junk flyer people? Very thoughtless.

David says:
22 August 2011

The interest rate for Green Deal is likely to be around 7.5% (an estimate and we will have to wait to see what the ‘market’, i.e Tesco, M&S et al set). Saving 7.5% on your energy bills is quite an impressive target but if you have to save that just to pay the interest, this plan looks set to fall short.

The saving in reduction of energy use by 2020 mentioned yesterday on TV of a third by the government is not realistic a lot has already been done by the public, a reduction of a third is just to much, designs of existing housing in many cases does not allow for changes to be made to properties within viable costs, certainly without changes to planning laws. Current properties being built now are not energy efficient they need a radical change to building regulation regarding thermal efficiency. Whenever the government comes up with grants etc they won’t give them to householders to do the work, only to a recognized list of companies which charge too much for the work, and often the work is not to a good standard because the people carrying out the work have not had the training and often don’t care enough about quality. It is cheaper to do the work yourself if you are able for less than you would be charged by these companies, effectively these companies absorb the grants and more. So if the government wants to do something improve the current build quality of new homes, but the won’t do that as they THINK it increases the cost!

Peter says:
13 December 2011

There are a number of related issues involved here. Improvements to the energy efficiency of ALL buildings is the first step in reducing our energy needs, This will give a quick win in reducing consumer demand almost immediately and in the longer term, reduce the need for greater supply capacity giving more choice of generation technology. The main reason for the lack of uptake in the existing schemes is the restricted choice of technologies being allowed and the use of “approved suppliers” to qualify for the grants. My property is not suitable for cavity wall insulation but is suitable for external cladding insulation, assuming planning consent is approved. This is not an option on offer. My property would also be better improved by using a roof-space insulation like “Celotex” or even lambswool as opposed to fibreglass. With insulated foil backed foam boards I could insulate my roof space but still ventilate between the sarking and board, prolonging the life of my roof. This is not an option under the scheme.

In the main, these schemes are being run to benefit the “approved suppliers” who are able to install solutions that suit their product preferences and with little or no regulation or governance to ensure that the grant has been spent in a way that delivers the original requirement. Too often these schemes are established with the best of intentions but are left with the contractors providing their own regulation and quality control and that is definitely not best practice! It is a license to print money to put into the pockets of the “approved suppliers”. Many householders are more than capable of arranging for the work to be done either by a contractor or themselves. This has the potential to reduce the overall cost to the government and the householder but, there is again a requirement for regulation and inspection to ensure that the money has been used as planned.

As for the use of alternative “green” generation technologies; it will take more than politicians listening to the current set of lobbyists with their own agendas to put together a sustainable forward strategy. It is essential that independent technologists and forward thinkers are involved to ensure that fully thought out, joined-up, connected systems are proposed, designed and developed that will do a job now and are sustainable in the long-term.

The technologies to generate the electrical power required are in existence, what is missing is the capability to store this for when it is needed. The technology for us to move to a Hydrogen energy infrastructure exists and is being used in Shetland and elsewhere. It is in its infancy but, offers the opportunity to develop micro-generation systems capable of powering energy efficient domestic properties, provide fuel for green personal transport systems and have reserve capacity to provide top-up capacity to boost the industrial capacity of the country during peak manufacturing hours..

We need to invest in developing Hydrogen systems that will be sustainable and green and could boost our manufacturing and export capabilities.

For goodness sake, we the general public elect politicians to govern and regulate all areas of society to ensure that we are protected from those who would manipulate those systems designed to improve our society and lives. When it comes to offers of funding for improvements that benefit us individually and nationally, provide expert guidance and technical advice but also regulation and governance to ensure there is individual accountability. However, allow us to be properly engaged in the process of improving our own homes. When people have ownership they feel responsible and accountable for their actions and are very likely to buy-in to any improvement projects.