Is the Government offering a Green Deal or a bum deal?

1 October 2012

green housesToday sees the launch of one of the Government’s latest bright ideas, the NEST compulsory pension, and next Monday another scheme has its debut. But this one is not about investing in your future, this is about the planet, people.

The Green Deal’s purpose is to allow property owners to environmentally improve their properties without having to pay out any moolah upfront. Instead, the cost will be added to energy bills (because they aren’t already a huge cost for homeowners) and paid off over a number of years. Interestingly, the Green Deal charge will attach to the property, rather than the property owner, meaning that future purchasers will also be buying the responsibility to pay off the cost of these green home improvements.

However, crucial to the Government’s plan to get people on the never never is having partner retailers who are willing to participate in the scheme. The original briefing documents mentioned B&Q by name, and DIY stores and supermarkets are considered essential to the scheme given their trust and reach among the UK population.

But so far, no major retailer has committed to join the scheme at launch, with several likely suspects telling the Guardian they would "wait and see" how the scheme worked out before making a final decision. Specifically, B&Q, is still "finalising its position", Tesco says it already offers a range of energy efficiency options independently of the "green deal" and Marks & Spencer said it was waiting for more details. Undaunted, the Department of Energy and Climate Change (DECC) said more companies were expected to sign up within the next few months.

From Monday, property owners can register to have a clipboarded inspector advise them on which energy efficiency measures they could have, ranging from loft insulation to double glazing, and costing from an average £200 to £7,000. However, the work won’t start until after 28 January next year, which gives time for Green Deal loans to be approved, but also gives the Government time to  find some retail/service partners to actually implement the works.

DECC want a whole range of different companies to get involved, going from big retail names down to one-man-band builders. The Government spin doctors see this as a way to create jobs while cutting emissions and helping people lower their energy bills. However, our cautious friends over at Which! are worried in case conscientious Green Dealers end up being taken for a ride by some less-than-conscientious workmen. Executive director Richard Lloyd, told the Guardian: "We will be watching closely to see if people get ripped off. Any poor practice must be stamped out as quickly as possible."

But there are other concerns too. One of the fundamental principles of the Green Deal and the Government’s environmental approach is that green measures should also be golden, that is, the amount spent on energy efficient measures should always be exceeded by cash savings over time. The Green Alliance thinktank has calculated that if loans are made at commercial rates of interest, Green Dealers may have to wait for many years to see a return on their green investment, if at all. Poverty campaigners are also voicing concerns that the scheme will only benefit middle classes, as the poorer and more vulnerable people may be denied loans and could be put off by the thought of having to find more cash to pay their energy bills.

So will you be rushing out to sign up?

TOPICS:   Utilities

7 comments

  • Rain p.
    Bad new for home buyers. Now if you move house (or buy a house for other reasons, BTL, for children, etc) you may find it comes with debt built in.
  • Kevin
    But Rain you'll also have the benefits of whatever the 'green thing' is that the house has. Just as you would if you had a nice garden or a new conservatory. Not like it'll be a surprise.
  • Mr M.
    The Green Deal is a big con to give big business more money, and keep it amongs themselves. For the one man band installers the cost to become a Green Deal installler is just to prohibitive, meaning only the larger companies can afford to participate. Also the Green Deal Assessors (who decide which measures should be installed, such as cavity wall insulation or solar panels) are in no way impartial. What's to stop them recommending what their friends are fitting with the aid of a nice little backhander.
  • Graham
    BW, get your facts straight... The cost of the energy saving measure is not "added to energy bills" at all. Energy bills will remain the same until the "debt" of the measure has been paid off. All Green Deal measures will have to meet a "golden rule" in that the savings of the measure must be greater than the cost to install the measure over its lifetime. I.e. if a new boiler costs £1000 to install, would make a saving of £200 per year on the gas bill and has a lifetime of 10 years, the gas bill would remain the same for 5 years until the debt is paid off. After that, the homeowner reaps the reward of a more energy efficient boiler. If the savings were only £50 per year, then over its lifetime the boiler would not save enough money on the fuel bills and the measure would not be available to the homeowner. The Green Deal is a "cost neutral" way for millions of homeowners to install more energy efficient measures to their house.
  • Tom
    Graham works for one of the accreditation schemes. It would be far better if there was a subsidy or discount applied to the work taken out (tax relief etc) but as usual there will be a system of middle men so any benefit will be sucked out.
  • Graham
    I do not work for an accreditation scheme, I just have the ability to read, and therefore know the facts
  • Everything p.
    A little underwhelmed...... We had our green deal assessment done by British Gas; we live in a single glazed, 1950's bungalow, concrete floor and traditional construction; we are off the grid so run on oil. We've only recently moved in (oct 12) even though our epc makes reference to the then upcoming green deal, the energy trusts recommendation was still to carry on with the gda as the epc is only part of it. Fair enough; forward we marched. Since moving in we have had the central heating changed but the old boiler remained - original install 1950's Tranco Tro 19kw oil boiler. We are waiting for our gda report but from what he said was we could only get our floor insulated under the green deal!?! Consider our walls and loft are already insulated. What we were hoping for; new windows and change our boiler for a bio mass boiler; he agreed our 1 acre plot was plenty big enough and with the amount of logs available; we'd even have free fuel for 2 seasons at least. The free fuel was a bonus; my bugbear is I would have thought my property was an ideal candidate for this scheme as much as it should be a study case. The green deal assessment only recommends installing floor insulation! Not replacing my 50 year old boiler nor my single glazed leaking like a sieve wooden windows. I'm a chartered construction qs / project manager and have been involved in the construction industry for 20 odd years. There are not many construction technologies and principles I do not understand. I have a good understanding of thermal losses and potential u values of materials. I feel as if the green deal has let me down and I should have used my 99 pounds towards buying fuel. P.s the RHI payment for bio mass could be 8.5 p per kwh; cost of wood pellets 4p per kwh my 2 seasons worth of logs; free. And still no bio mass! Unbelievable.

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment