Governments Green Deal proceed with caution

29th January 2013

The announcement by the Government this week of a new ‘Green Deal’ for households might sound good in theory but George F White Renewable Energy Specialist, Victoria Lancaster is sounding a note of caution.

‘The Green Deal is a scheme whereby homeowners, landlords and tenants can have energy efficient improvements made on their houses using a loan which is repayable via the electricity tariff. The loan then stays with the property for future owners or tenants to repay over 10, 15 or even 25 years. Having your home assessed by an independent trained assessor highlights where energy saving can be made – the pivotal factor being the repayments must be lower than the savings in energy bills.

‘Where a house is let, this could be seen as an opportunity for landlords to bring their letting properties up to standard ready for the new regulations in 2018 when all let properties will require a E or above rating on their energy performance certificate (EPC). Tenants must get the consent of their landlord prior to proceeding with a Green Deal but it is one way for properties to be made more energy efficient with the cost spread over a loan payable by the bill payer.

‘However, borrowing money at relatively high interest rates based on advice from one ‘Green Deal’ assessor may not be the best way to solve this problem in the long term.

‘One of my biggest concerns is when a house owner decides to sell the property. The house may be more energy efficient but how does that balance out against a legacy of consistently high energy bills – due to the extra monthly payment and interest on the Green Deal agreement the seller has entered into. The crucial question is – would buyers be put off when faced with paying back up to £10,000 in loans plus interest?’

‘The scheme, which is targeted at 14 million homes, is being introduced following sharp increases in gas and electricity costs that have hit the standard of living for millions of Britons. Those in rural areas are hardest hit, as they are rarely on the gas grid and pay higher prices for oil and LPG heating.

‘But some experts question the economics of the programme, which charges relatively high interest rates and involves salesmen charging to visit homes to assess the energy–saving measures needed.

‘My advice to anyone looking at the scheme would be to do some research yourself on what kind of efficiencies you could make in the house. Have you got at least 27mm of insulation in the loft? Have you draught-proofed every entrance? These are common sense, low cost options that you can put in place easily and quickly. After that, it may be a question of looking at renewable energy or a new boiler or double glazing. Shop around, take advice – there’s plenty of free information on the web, including the Energy Savings Trust. All renewables installers should be MCS accredited and will give you advice too. Always get at least three quotes and ask neighbours and friends for recommended suppliers. Word of mouth is always the best way to find good quality contractors. Only after you’ve exhausted all other routes would I suggest looking at the Green Deal.’

Victoria Lancaster, Renewables Project Manager, is based at the Northumberland office of gfw-Renewables. The company advises on renewables projects from Lincolnshire to Scotland.

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