The Green Deal offers a unique opportunity to improve your home without needing the capital investment required for many energy efficiency or renewable technologies. However, gaining access to this form of funding requires some leg work on your part too.
How to get the Green Deal
Anyone considering improving their homes under the Green Deal needs to follow a prescribed set of stages:
1. Get an assessment: There are Green Deal Assessors all over the UK, so wherever you are you’ll be able to find someone to come and assess your property. You can find an assessor by calling the Energy Saving Advice Service on 0300 123 1234 or by visiting www.gov.uk/greendeal. You may have to pay for this service, with costs ranging from £90 to £150.
2. Check your recommendations: The assessor will recommend some improvements to your home. The recommendations will reflect the improvements which will have the biggest impact on your home’s energy efficiency and carbon savings. They should also give you an indication of the possible savings if you go ahead with these measures.
3. Get some quotes: If you decide to act on one or more of the recommendations of the assessor, the next stage will be to gather quotes. Your Green Deal Provider should discuss with you when they quote whether you are eligible for the Green Deal Plan – the loan of the capital cost. The criteria for the Plan is much more lenient than with regular credit, so even if you have been turned down for other loans or credit cards, you may still be accepted for a Green Deal Plan.
4. Installation: You can get as many quotes as you like, and once you find a company you are happy with you can go ahead and get the measures installed. The installer will deal with your Green Deal Provider for payment, and you will pay back the loan through your energy bills.
What happens next?
In essence, your repayments on the loan you have received for your measures should never exceed the amount you will be saving on your energy bills, so you should be quid’s in. When used in the right manner, the Green Deal should enable you to improve your home, be warmer and more comfortable and, once the loan is paid off, be saving significantly on your regular outgoings.
However, there are some considerations to be made to ensure you get good value from the offerings of this scheme. Small savings from things like cavity wall and loft insulation will result in prolonged periods of paying back the loan, which could end up being more costly than you expected.
Your Green Deal assessor should be able to help you calculate how much you are likely to save, and set your repayments at a reasonable level. The problem comes if you are already a low user, because assessors will use the average energy use for a home of your type rather than taking into account how you actually use your energy. This could be a problem for people who are rarely at home, or those who live in big houses and only heat one room or a part of the house.
In a worst case scenario, you could end up paying back at a level which is more than you save on your energy bills, or could end up needing to pay for 25 years or more. Thankfully the Green Deal loan is tied to the property, not the owner, so if you do move house within the repayment period, your debt stays with the home.
Will it work for you?
Green Deal loans offer people a great opportunity to improve their property without needing the capital upfront. However, if you have other financial means at your disposal, you might consider it better to pay with your own money than to borrow. You can still claim the early adopters cashback if you are in time to do so, even if you don’t take the loan part of the scheme.
For most people, the Green Deal is a good thing that will work very well in terms of lowering CO2 emissions and reducing our dependence on fossil fuels. But it does help to do your homework first, and to ensure that the repayments being set for you are reflective of the way you use energy in your home right now.