UPDATE: As of 30 March 2016, the government has stopped funding and the Green Deal Home Improvement Fund is closed to new applications. You can read about it here.
Having carried out 1000s of Green Deal Assessments over the last year or so, it is far to say that we have a pretty good feel for how the scheme is going. In this blog I am going to share a bit of this insight on what the Government hoped would be the biggest home improvement scheme since the end of World War 2.
So how is it going? Well we are seeing record numbers of assessments coming through our books – we are booking and carrying out about 10 Green Deal Assessments a day. I think that a fair amount of this is to do with the Green Deal Home Improvement fund that has recently ended (which we will come on to later), but also I think more importantly the scheme is beginning to find its feet.
In fact we see 4 types of people coming to us for assessments:
- Those desperate for finance
- Those who just want the generous Government cashback
- Those who want to get the Renewable Heat Incentive
- Those who just want the advice.
People desperate for Green Deal Finance
Bottom line, many of the energy efficiency measures we suggest aren’t cheap. A new boiler might be in excess of £2,000 and there are a lot of people out there who don’t have this kind of money spare.
These people ring us and want any financial help they can get – we can show them how to get the measures installed with Green Deal Finance to help minimise the up front cost.
Green Deal Finance works by allowing households to use the energy savings the measure would produce to secure an element of funding to get it installed. The interest rate on this Green Deal Finance is 6.96% – far higher than a mortgage for example, but the amount you pay is fixed and in some cases fixed for 25 years. Trying going to a bank and getting a 25 year mortgage at 6.96%! You can also repay your loan early with no early repayment cost.
The important thing is that Green Deal Finance is now up and running – lots of providers out there can offer it – and so if you do require this then you should have lots of options. And remember the repayment will be fixed for the lifetime of the measure, whereas energy bills will probably continue to rise, so replacing an element of your monthly energy bill with a fixed payment does insulate you against future energy price rises.
The Green Deal Home Improvement Fund
This is where we were getting a huge amount of interest – The Green Deal home improvement fund was the improved, more generous Government cashback scheme.
Unfortunately, the Government pulled the plug on the scheme early because the pot of money ran out. This is extremely disappointing because the cashback makes the Green Deal far more attractive than a simple loan.
I think the problem with this is that it is not tied to Green Deal finance – which is what the Government are trying to drive up take of – so while very generous and happily received by customers and industry, it didn’t create any take up of the finance the Government was trying to achieve.
Hopefully further cashback schemes will be launched in the future, and we will bring you any news as soon as we get it.
People need a Green Deal Report to access the RHI
The RHI or Renewable Heat Incentive is a payment made for heating your home via either a heat pump, a biomass boiler or solar thermal. In order to benefit from the RHI payments it is a requirement to get an assessment. This isn’t such a bad idea – I guess the problem for us is that those who install these tend to have a lot of cash and therefore seem to have huge houses so the assessments themselves take a very long time!
People who are looking for energy efficiency advice
These guys are our favourites – the people who ring us and get an assessment purely to get advice on how to drive the efficiency of their homes. These people are genuinely intrigued about the weird and wonderful things we can recommend to them and also how best to finance them.
Is the Green Deal in jeopardy?
At the end of the day, people are always going to need new replacement boilers, but we are beginning to see a seismic shift in people’s attitude to energy prices. During the last round of energy price hikes in November 2013, people finally began to say enough is enough. The issue being of course that we rely on most of our energy to come from overseas. Global problems like the Ukraine situation, and the fact that our own nuclear power stations are all rapidly approaching the end of their useful lives are all bad news – energy prices will continue to rise.
Even if the Government do manage to crack ‘fracking’ and make it viable in the UK, you can bet that it won’t lead to price cuts, instead the Government will take the difference in tax receipts.
Schemes like the Green Deal are vital to help reduce our energy demand to help make bills more manageable. The major issue is that you are moving from a ‘free’ scheme to a paid scheme, people will now be paying for the measures via their energy bills. What this means is resistance, because people are used to having their homes insulated for free. Vulnerable people expect to get a new boiler for free. Unfortunately under the Green Deal this just isn’t possible, the good news is that people are beginning to understand this and the rise in the price of energy is forcing action.
So yes the Green Deal might die a death when a new Government comes into power, but there will be a similar scheme launched – and don’t expect it to revert back to the free model. Unfortunately the Government simply doesn’t have the spare cash to make that happen!
Think we missed something? Do you have a different opinion?
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