/ Home & Energy

The Green Deal launches – are you tempted?

Picture of a green house keyring

You could call it the second coming. After the original launch-that-never-was in October 2012, the government’s energy efficiency scheme – the Green Deal – launches officially tomorrow.

I should say that October’s ‘launch’ was only ever intended to introduce the legal framework for the scheme. Monday’s official launch has long been penned into the diary, to mark the date that the Green Deal becomes a reality for consumers.

Energy efficiency is the simplest and most effective way of cutting your household energy bills. Our research tells us time and again that one of your most pressing financial concerns is the rising price of energy, so now seems like a great time for the government to get in on the energy efficiency act. The recent cold snap makes it all the more timely.

Keep dodgy salesmen out of the deal

In light of the OFT’s recent report into poor practice in the energy efficiency home improvements industry, we’ll be keeping a close eye on how the Green Deal operates in the market place. Given that energy efficiency improvements can save you a good deal of money, we’re keen to see the Green Deal deliver on the very ambitious goals the government has set for it.

The Green Deal is a new product that we don’t want to see fall at the first hurdle. However, this could happen if mis-selling and dodgy tactics are allowed to surface. It’s quite a complicated product, so if you’re thinking about getting a Green Deal, you’ll need to keep your wits about you. Make sure you read our Green Deal check-list for lots of relevant help before you get an assessment carried out.

Don’t forget to shop around

Given its complexity, it’s vitally important that quotes for Green Deal loans are clear and comparable. And not just with other Green Deal loans, but also with other forms of finance such as regular loans from your bank. Whether or not it’ll be a good deal will depend on your individual circumstances. But like all financial products, it will be just as important to shop around with the Green Deal.

We don’t yet know how the market is going to develop, so we’ll be monitoring the situation as it develops in the coming weeks. We will be watching closely for any signs of bad practice, which must be stamped out as quickly as possible.

Are you considering having energy efficiency improvements installed via the Green Deal? Are there any details of this scheme that attract you to it, or even put you off?

Are you considering taking out a Green Deal loan?

No (72%, 192 Votes)

Yes (15%, 39 Votes)

Maybe (14%, 37 Votes)

Total Voters: 272

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Comments
Guest
James says:
27 January 2013

I predict another ill-thought out Cameron government shambles. Every cowboy company in the country will jump on this and we will al be plagued by phone calls from companies offering too-good-to-be-true deals. Added to that, the debt is attached to your house, not you personally, so when you come to sell this will be a factor taken into account by your potential purchaser. Honestly,watch this space, there will be a scandal about this, no question about it, or I’ll eat my loft insulation.

Guest

I don’t understand who this product is aimed at.

If you have a mortgage, it would be cheaper to extend that to cover the home improvements and you get to keep more of the savings. If your mortgage company won’t lend against the proposed improvements, that suggests there is something wrong with the proposal.

If you don’t have a mortgage, you probably have the cash to make the improvements and, assuming it is worth doing at all, you get to keep all of the savings. With today’s low interest rates on savings it could be a good return on investment for the right product.

If you have neither a mortgage or the cash, circumstances suggest you should seriously consider selling up, release some equity and move to a more energy-efficient home, rather than burden your property with a financial charge that will make selling it harder in future. Why would I buy your property with a loan attached at a rate of interest I didn’t commit to?

The only winners seem to be secondary loan companies and double-glazing salesmen. Not areas a responsible government should be getting into bed with if they put their citizens first.

Guest
SUZANNE HYDE says:
27 January 2013

Sorry, but what a complete load of tosh!
I moved into my property a year ago.
It was built c. 1930. The wall cavity is too small to have the wall insulation.
It’s a relatively cold house and I paid to have solid wall insulation (on the outside of the property), which has helped a great deal.
To have the rest of the property done, it would cost me approx. £10k.
I do not have the room to borrow from my lender, but DO want to get the rest of my property insulated. It’s also looks good, with the fresh cream render over the top.
If I’m able to pay this back through my utility bill, then fantastic.
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.
As soon as the loan is paid back, they’ll reap the rewards in the future.
Why would cowboy firms be allowed to subscribe to such a thing?!
I suggest you investigate this further so you understand more about the scheme and how it will potentially help homeowners such as myself.
If this DID prove to be a problem for future purchasers, I would consider paying off the debt using my equity.

Guest

>>> 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?

Guest
SUZANNE HYDE says:
27 January 2013

No. I bought a beautiful 1930’s detached house, having moved from a new build property (after splitting from my partner).
We live at the highest point in Nottinghamshire, so tend to get the raw end of any weather deal.
The house is SO cold.
How does anyone know that until after they’ve moved in to a property?
I had the very front of the house insulated on the outside. It looks amazing and appears to have made a real difference to the front of the house.
Because of this I would now like the rest of the house doing, but do not have the resources to finance this outright.
That’s why the Greendeal, is ideal for someone such as myself, in the situation they’re in.

Guest

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?

Guest

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.

Guest

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.