The Green Deal launches – are you tempted?

>>> I don’t understand who this product is aimed at. <<>> I moved into my property a year ago. <<<

So you recently bought a property knowing that it was not energy efficient and would cost a lot in install external wall insulation.

Wasn't that factored into the purchase of the property? Why are other energy consumers obligated to help? And why does that require me to understand more about the scheme?

Please forgive my continued ignorance in these matters.

Did the house not come with an Energy Performance Certificate? And shouldn’t that have highlighted the need for improvements?

Hi Suzanne,

Under the Energy Company Obligation, you should find that you receives a significant amount of grant funding towards the cost of solid wall insulation. And should you need to put any money in yourself, you may find that the amount of cash-back that is currently available when solid walls are insulated (up to £650 I believe) will help, or even exceed any required contribution.

You get access to this funding by initially getting a Green Deal Assessment completed. You should look for an assessor organisation on the greendealorb website. Or you could ring the energy saving advice service on 0300 123 1234.

SUZANNE HYDE.

You said about when you go for a green deal loan to insulate your effectively solid walls
“If I sold the house during this period, not only is the prospective purchaser going to get a house that’s already had the work done and looks nicer, they’ll also save on their energy bills”.

No, they won’t save on their energy bills, not at least until the loan for an inflated price installation plus 7% interest is paid off. Part of their energy bill will be repayments for the loan YOU took out.
So I would suggest either they’ll want a substantially discounted price or they’ll want you to pay off the loan, including penalties first, or they won’t buy. Any buyer is surely going to want to start clean and buy at a price which allows for improvements to be carried out in the way they want rather than via a loan contract (and not really a very good one) taken out by a previous owner. That’s the way I’d want it to be.

Getting your walls insulated is a really good idea but not so good via the Green Deal route.
If you have savings use those, they’re making little interest right now anyway.
Even borrow to do it, plenty of places you can do better than 7% interest.
You won’t be paying inflated prices, you won’t be mis-sold anything.
You’ll find it easier to sell your house should you ever choose to do so.
Best of all you’ll get all the energy bill savings, and even if some of those savings are used to finance the project overall you will do much better.

Don’t take my word for it do some research and the maths yourself.
I know it’s your money, but it irritates me that people will potentially get a very poor deal as a result of the Government making a dogs dinner of what could have been a very positive initiative.

Hi Chris, I don’t think you are aware of how solid wall insulation is going to be funded under Green Deal / Energy Company Obligation. As it has been identified as a key area that needs to be addressed, but won’t meet the Golden Rule, then there is a separate pot of money to finance installation of this measure. So you would save on your energy bills, significantly, and in many cases, you won’t have to pay anything for the work. So please don’t feed people badly researched information that might put them off greatly improving their circumstances.

ecodave,
I am fully aware that solid wall insulation will be different to most other improvement measures thank you.
I think you miss my main point, that being that dispite all the various subsidies and grants available for solid wall insulation very few installations will be free and the proportion of consumer libility won’t in my humble opinion be interest free, safe from artificially inflated prices or safe from pressure selling.

Insulating a solid wall (or any other upgrade measure) is a really good idea and it must be so that a financial arrangement including subsidy where appropriate that does not include the green deal (and if it doesn’t it should) must still be available and a better option for the most people. I only maintain that an option not including the green deal will be a cheaper more cost effective option simply because of the short comings of the green deal in it’s current form. Especially the case for all other imrovement measures.

That’s not (and never was) intended to put people off any improvement measure. In fact my intention is quite the opposite and by advising there is another, and I think, cheaper and better way the intention is to promote improvements.

Chris, I am just taking issue with your incorrect assertions in regards to not saving money with solid wall insulation. I have my own concerns as to the pressures that will be applied to GD Advisors to convert assessments into plans. I have concerns as to how recommended measures will work in real life situations. I have concerns at the rate of interest, should have been about 5%.

I note that you have chosen not to upskill to GDA, which may turn out to be a good thing, but it probably means you are less familiar with the raft of safeguards in respect of customer protection. These safeguards in themselves don’t guarantee anything, but they may put off the rogue traders that many fear will be attracted to this scheme. I think the first year of operation will see many bad apples removed, so early caution may prove wise.

Lets just guard against encouraging inaction.

ecodave, I think we’re still misunderstanding each other.
I make no assertions in regard to not saving money with solid wall insulation, nor do I intend to. I think surely we should agree that any upgrade measure is a good thing and potential must exist to save money with all and any.
It’s just that the potential for the big boys to inflate prices coupled to interest charges, upfront fees and the host of other anomalies within the green deal suggests to me that alternative approaches or financial models will prove better and cheaper.
My issues is not that the “concept” of the green deal is bad and I too would agree that we must guard against inaction. But a badly conceived green deal riddled with unnecessary costs and what will prove to be unpopular elements will not promote action, rather the loss of credibility which may well result will if anything promote inaction.

I think we’re both very much in favour of the same thing but we have a different idea of how to get there. If we’re going to argue lets argue about how we make the green deal cheaper, fairer, safer and better before people who potentially could benefit close their minds to it.

Perfectly explained, thank you Christopher.
How long, I wonder, before the ‘Green Deal’ is re-christened as the ‘Green Steal’.

Alec,

I respect your opinion but I’m afraid I must disagree.
“Providing an interest free loan for nationwide consumer spending is simply not viable” really?
Yet subsidies for various forms of power generation both conventional and renewable are viable?
And is helping to achieve national targets for energy saving through interest free loans really subsidising “consumer spending” or is it money well spent improving housing stock which will help avoid penalties if those targets are not achieved?
I also entirely disagree with your dismissal of the effect being saddled with a green deal loan will have on resale potential. If it does not break a sale I’m sure it will affect sales value potential. No one I’ve spoken to likes that part very much at all.

I think, despite your measure of disagreement with my opinion of the Green Deal, your last line; “for reference I will not be participating in the scheme” sums up the way most people will think.

We’ll just have wait and see if the scheme succeeds won’t we?
In it’s present form I think the take up is going to fall very short of expectation, and rightly so because it’s a poor deal.

SUZANNE,
Respect your point of view but I don’t agree.
Getting the work done, really good idea.
Doing it through the Green Deal, not such a good idea while cheaper and safer alternative approaches exist, and I believe they do.
It’s your money, your choice, and if you really think the Green Deal is the best way to go then do it.
I won’t be going that way for all the reasons already stated.

The option is there to pay upfront in full so subject to a final check I think you’ll find there is. Do a bit of research. I’m sure you’ll let me know if I’m wrong, and even if I am Green Deal “accredited” installers will probably inflate prices to erode subsidy value, just like British gas already charge 40% more for a boiler than a local plumber.
Anyway regarding the Green Deal in total it’s not just about solid wall, there are 40 odd other improvement measures in the equation and my critical comments are directed at the thing in general and as a whole.
But rather than us banging on about what looks like becoming an agreement to differ I’ll just repeat “your money your choice”

Are you aware of what safeguards are in place?

Simple answer is no, but a headline comment of “Keep dodgy salesmen out of the deal” and comments like “shop around”, imply that its left to the private sector who are only in it to make money tend to put me off too.

I’m getting a picture rather like the double glazing industry, it all boils down to which sub contracted crew you get as to whether you have a positive or negative experience. The company doesn’t care as long as it makes money.

Love the stupidity of whoever thought to “red thumb” my questioning of Williams knowledge of safeguards in GD. Especially as his response was “the simple answer is no”.

Cue more red thumbs.

The problem with shorter term plans with the Golden Rule thrown out of the window is that people will be signed up by “hard-nosed salesmen” into a plan that they can’t afford to repay. You do understand that millions of people are struggling or unable to pay their fuel bills as they are, and your plan will increase those payments.

I can well understand that, and I would prefer to see some DIRECT assistance with energy efficiency for those that are genuinely struggling or are unable to pay their fuel bills. Using subsidies to make homes energy-efficient can permanently reduce net energy demand and is a more effective use of public money than trying to generate additional energy using solar panels and wind farms to fill the gap. If someone is already in the situation where they are unable to pay their fuel bill, the Green Deal isn’t going to help them.

Encouraging people in financial difficulty to take on long-term debt at high rates of interest is not the best way of assisting anyone, particularly those of fixed incomes. And let’s be clear – the Green Deal does not provide a single Joule of heat on its own. Energy prices may well continue to increase and the household has a fixed or diminishing amount of money to spend on fuel.

Then what? The Green Deal debt still has to be paid off at exactly the same rate regardless of other needs and priorities, whilst the remaining money buys less energy than before. It doesn’t matter how efficient a gas boiler is when there is no fuel being burnt and the improved insulation becomes somewhat pointless when there is no heat to retain.

The Green Deal is primarily about assisting the government to meet its self-imposed emission commitments at no cost to itself. Unfortunately, they just forgot to check with the poor if they would like to help out by taking on more debt.

Em,
Very well put.
And you are correct in saying that it is far better to subsidise energy efficiency than to subsidise the generation of renewables. Not only the “biggest bang for your buck” but a more socially fair approach.
People who, for reasons best known to themselves, favour and promote the green deal seem to think that anyone who thinks it’s a poor deal is opposed to energy efficiency.
Simply not true of course.
Rather opponents of the green deal (like myself) are against a poorly conceived scheme which will result in less retro fitted efficiency because the deal is bad.
Like you I think the only way to get substantial retro upgrading is through heavy subsidy using revenue collected through general taxation. This privately funded Green Deal” approach plays into the hands of those who will be looking to maximise profit potential, and that because of the nature of the beast will never enable the economics to work out well for the poor consumer. So other than a few who get sucked in (or mis-sold to) it’s not going to work, at least not in it’s current operational format.
The Government really needs to think again, and I suggest think subsidy so real energy cost savings can be realised much sooner. Not after repaying a ten or twenty year loan including interest for overpriced items, that’s ridiculous,

Hi Edward260, thank you for sharing your guide to the Green Deal.

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