Green Deal

Energy Prices, The Green Deal and You

How the Green Deal Works in Principle

The objective of the Green Deal is to help people invest in making their homes more efficient by improving insulation. This is achieved by essentially giving the consumer a loan which is repayable over 25 years, but instead of repaying a bank; the consumer repays the Green Deal Loan via their energy utility bills. In theory, the savings made by improved insulation will balance over the loan i.e. the loan repayments will not be more than the savings created by the improved works.
As we all know, Energy Prices will rise in the future so a long term fixed price plan on energy bills should help the consumer ?

The UK Government launched the Green Deal, aimed at making UK homes more efficient and helping households reduce their energy bills. This is clearly a step in the right direction; however the most important question is;

Is the Green Deal in the best interest of the Consumer ? – Make up your own mind

Firstly, A Green Deal Energy Assessor will identify areas that will improve energy efficiency in your home, however….here’s the rub, the calculations are not based on your actual home and but rather National Data that has been collected by third parties. The Green Deal scheme has set an agreed ‘living room temperature’ of 21 degrees, this means that if a consumer is used to having a lower temperature in their living area ie 19 or 20 degrees, the savings calculated will be based the 21 degrees and the consumer will still have to repay the Green Deal 25 Year Loan based on this criteria.

A key part of the Green Deal is the cost of future energy prices, The Green Deal has estimations of these, however it is fair to say that these are difficult to predict other than that they will probably keep rising. It is possible to repay the 25 year Green Deal Loan early, however Green Deal providers do have the right to claim a compensation fee as they will not have received the full interest the consumer agreed to pay when they sign the Green Deal agreement.

The amount repaid back to Green Deal Providers could double as the interest rate is based on market conditions.

If the consumer chooses to get 3 quotes from Green Deal Providers, the consumer will have to pay approx. £150 per provider per visit; this will cost the consumer just under £500.

The Green Deal Loan scheme is secured on the property; this means that if a single home occupier sells his/her home to a couple with 2 children, the new family will inherit the Green Deal repayments.

Is the Green Deal Right for You?

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Cost of an assessment The Green Deal scheme encourages householders to have more than one assessment done of their property before deciding what improvements should be made. Most Assessors will charge a call-out fee of up to £150, reducing the number of plans a householder can choose from.