The Green Deal launches – are you tempted?

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.

Hello Samos,
I’m a DEA too but not a GDA. From my previous comments it’s probably fairly clear why not, but in summary it’s because in it’s current format I don’t think the Green Deal is a good deal and won’t in my opinion succeed.
I applaud you for your comment where you stress the importance of the independence of the GDA and your intention to be open honest and impartial. However some operational models I’ve seen whereby GDA get commission on sales and even risk no sale no fee lead me to believe they won’t all be like you.
If you’ve been around as a DEA for a while you’ll already know how fees the DEA collects for EPC’s have reduced (panels and estate agents do far better than the person actually doing the job) and I don’t think it will be any different for Green Deal Assessments. But even with poor fee levels (for the amount of responsibility and work often involved) DEA’s are not subject the temptation of commission on sales because there is no sale involved.
For the GDA the story may be very different. It will be hard scrapping a living as a GDA, fees will be poor and the temptation to “push the sale” and collect commission might be too great for many.
This element which has great potential for mis-selling is the bit that worries me the most about the Green Deal, although there are plenty of other flaws. If a client sees inflated prices from installers and is aware of interest charged then like any other deal they can decide the deal is not competitive (as I think will often be the case) and opt out. However mis-selling pressure may not be so obvious to spot and safeguards such as regular audits and cooling of periods I don’t think will stop it.
I also think that your intention to remain completely honest fair and independent will mean that you don’t do many Green Deal assessments. Rather most will be done by the cheap, stack em high sell em quick GDA’s “selling products” and collecting commission.
I’d really like to be proven wrong in that prediction but I’ve a horrible feeling I won’t be.
The only way to guarantee impartiality is to make the GDA total independent within the Green Deal operational format and that means a rule prohibiting sales commission and the no sale no fee model.
We’ll have to wait and see how it turns out, won’t we, but I wish you well.
Oh and I agree about ECO helping the most in need , I’ve no issue with that scheme.

Win Win for the landlord and the tenant?
How do you work that out?
The landlord gets his (or her) property upgraded but the tenant pays?
The tenant does not see a reduction in his or her bills until the loan is paid off.
Yep, really good deal for the tenant that is? NOT.

I’d suggest the law whereby a property cannot be let unless a minimum standard of energy efficiency is achieved whereby bills paid by the tenant are lower is long overdue. Currently sheduled for 2018, should be tomorrow, and the property owning landlord who is getting an income from letting should be footing the bill, not the tenant.

Hello Bret,
I wouldn’t necessarily claim to be an expert but perhaps because I’ve been looking at the Green Deal for some months I might be able to claim I’m perhaps a little better informed than many seeing it for the first time.
As an existing energy assessor (EPC provider) I’ve been the recipient of many offers of training to qualify as a Green Deal Advisor. Not free training so I’ve been looking very carefully at the Green Deal potential for success. The more I learnt the less I liked it on several levels, for reasons as I’ve already commented.
Your logic regarding tenants footing the bill for efficiency improvements on the basis they’ll be more comfortable while not paying out any more in energy bills has an understandable element of practical compassion.
However there are still a couple of things to remember.
To reach a level of health and comfort they might not only be repaying the loan, supposedly covered by the improved efficiency, but might well find the bill goes up, remember the “golden rule” is a generalisation based on a standard occupancy model and not a guarantee.
And you cannot get away from the fact that the landlord is getting his property upgraded for free by a tenant who has far less security of tenure than say an owner occupier.
The real winner here is clearly the landlord who might go on in later years to be able to command higher rent for a property upgraded at the expense of previous tenants. Don’t know about you but that does not sit well with me, although I’m sure some landlords will love it.
As I think we’re agreed the landlord should in all fairness provide tenants with a property of at least a reasonable level of energy efficiency by law. I think that should be at least an EPC level “D” and I think that should be law right now, never mind in five years time, or if ever.

Richard,
Couldn’t agree more.
I’d suggest an incentive scheme should be introduced whereby you get a modest rebate on your council tax where your energy efficiency is above the national average, or a reasonably determined level.
This offers an incentive to become a bit more energy efficient and at least modestly rewards those who have done so.

Of course it could also be argued that less efficient homes should pay a little more but that’s going to present problems especially where energy efficiency, or lack of, is down to poverty. But who knows perhaps another (or perhaps other existing) scheme to help those in need and this would incentivize the poor to take advantage, get upgrades and save a bit on fuel costs.

Em,
Trouble is Government doesn’t seem very good at joined up thinking.
This dogs dinner of a Green Deal proves that beyond any doubt.

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.

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,

Somewhat over the top but many a true word………..
Detail accuracy closer than I expected, probably put together by someone who has attended one of the Green Deal seminars run by training companies.

Actually Mick I recently had fitted a new replacement boiler for £1500 along with a 7 year guarantee (10 on the heat exchanger) from a local Gas Safe plumber. I can opt for a service contract or not and still be quids in. As for 7% interest what about the recently announced “Nationwide Green Additional Borrowing” scheme only 2.3%?
I’m all for upgrading efficiency and I like the concept of the Green Deal but until prices and interest are competitive (and I’d like to see interest free loans) I don’t think it’ll catch on.
I’m also not keen on many of the other silly elements either like the loan tied to the house and the prospect of tenants paying to upgrade their landlords property.

Roll on a sensible and fairly priced Green Deal Mk2.