The Green Deal – Is It Worth It?

Build It expert Mike Hardwick
by Mike Hardwick
13th September 2013

The Green Deal was launched at the beginning of the year and, despite 19,000 assessments being made nationally, fewer than 200 homeowners had joined the scheme by June this year. It was expected to have attracted 10,000 sign-ups by this stage.

Teething troubles? Maybe, but more likely it is a deep distrust of a scheme that ties any future owner of a Green Deal property into making payments to a loan they didn’t ask for and can’t pay off early without incurring hefty, early repayment penalties. There are no guarantees that the savings will match the cost of the loans either. The upper limit of funding available to Green Deal customers will probably be around £10,000 because of the golden rule stating that repayments must be no more than the savings made. That might pay for new double glazing, upgraded insulation or an efficient boiler, but it’s unlikely to do all three.

In an attempt to generate more enthusiasm and energy, climate change minister Greg Barker has emphasised how much value energy saving improvements will add. He has said that raising the energy performance certificate (EPC) of a property from band G to band E, or from band D to band B, can add an average £16,000 to its value. However, it’s going to cost at least that much, probably more, to reach the carbon footprint that the government wants. Installing a ground-source heat pump is going to cost at least £10,000, and if you tack on a photovoltaic array onto the roof, you are already well above £16,000 in capital outlay.

We all seek low energy bills and want to do our bit for the environment. However, it’s not as simple as Mr Barker thinks. I know for a fact that if my wife fell in love with a 200 year old country cottage with solid walls, single glazed windows and a low EPC rating we would still end up making an offer. I’ve asked a number of local estate agents how many of their potential purchasers had been put off by a poor EPC rating. The answer was a resounding zilch.

For self-builders, achieving a high EPC rating is a no-brainer and more common place as Building Regulations improve. However, saddling existing homeowners with a debt that might deter any future purchases of their home, and that may not equate to the savings promised, makes the whole idea look pretty shaky to me.

One Comment

  1. tlc678910 says:

    I paid for a green deal assessment. I was full of enthusiasm hoping to get the walls and flat roof on my extension insulated (it was already there when we bought the house and is freezing in winter). I thought I might need to borrow about £5000 and wanted to use the scheme to spread the cost of this. The annual savings estimated by my surveyor for all measures suggested (which not include what I wanted) was a grand total of £59. As borrowing cannot exceed the savings from the scheme I would be able to borrow £590 over 10 years. If I needed to borrow £590 I would stick it on my credit card and not be stuck with a loan against my house! I should have saved my £100 assessment fee for my utility bills and stuck a heater in the extension. Homeowners be warned before you pay for your assessment how low your possible loan amount may be.

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