The following scenario shows how you can take Green Deal Finance and pay-off the balance with your own personal contribution where the “golden rule” isn’t met. Note: the numbers have been adopted from an example provided on the Department of Energy and Climate Change website.
Replacing an Inefficient Boiler with an A-Rated Boiler
The example below assumes the installation takes place in a typical 3 bedroom semi-detached property:
| Replacing G-rated boiler with A-rated boiler estimated to save each year | £197 |
| Golden Rule says max repayment on electricity bill in year 1 should be | £197 |
| Assume typical cost of the work | £2,500 |
| Illustrative cost covered by Green Deal finance for this customer | £1,300 |
| Assume 12 year Green Deal finance loan @interest rate | 10.1% |
| Personal Contribution (cash or other means of financing) | £1,200 |
| After taking interest plus cost of job over 12 years: | |
| Annual repayment added to electricity bill | £192 |
| Customer better off with the savings | £5 |
| Customer also receives cashback for the measure installed | £270 |
| Total customer benefits in year 1 (bill saving + cashback) | £275 |
Total 12 Year Net Benefit to customer
£340 – £5 per annum net bill saving plus £270 cashback
From Year 13 the customer will make the full £197 per annum saving (today’s prices) on the boiler when the finance is paid off.
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