Green Deal Finance – Partially Financed Worked Example

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.