By the end of April a relatively impressive 18,000 Green Deal assessments had been carried out. It had been a slow start to the Green Deal, with a few delays and a number of high profile swipes at the concept, but it really did seem to be gathering momentum. However it seems that this momentum might have been overblown with the BBC reporting that only approximately 200 of these assessments are actually translating into Green Deal loans – the Sun suggests that the true number is only 3 (one of whom works for the government anyway)!
How does the Green Deal work?
On the face of it the Green Deal is a good concept; homeowners can take out loans for energy saving improvements and this loan will not be ‘attached’ to them but the home itself, so reducing issues with credit rating and personal debt. It is only available if the cost of the improvements (and associated costs, including financing) are less than the saving created by the measure, meaning that there will be a real reduction on the occupant’s bills – this is known as the “Golden Rule”.
The problem with the Green Deal
If it is all so good, why has the takeup been so low?
We believe that the simple answer is that we are a nation of sceptics, and there is a lot to get our heads around here. Firstly, the loan is attached to the home and this is totally new and hard to figure out; no one wants to be the first to take the plunge and to convince people to do so is hard.
Another big question people are (rightly) asking is whether it will have an impact on our ability to sell our homes; the consensus is no, but again, who wants to take the risk and be proved wrong? And it will take a long time before homes being fitted today come onto the market to test this.
We have enjoyed a period of fairly generous grants where many of us have simply been given free insulation, and it is hard to make the switch from a grant concept to a loan that we have to pay back through energy bill savings. There are still grants available, but we’re not very familiar with these and nor is the industry. The focus of the grants has also shifted to solid wall insulation, a traditionally neglected area in grant terms, and as this measure can change the appearance of a home if fitted on the outside and it eats up space on the inside if fitted there, it’s certainly a less attractive prospect than other grants funded measures have been in the past.
Finally, and probably most importantly, there is a delay in getting your loan once you have had your assessment done. There was a frustratingly slow start to the Green Deal in terms of the number of assessments completed since the scheme’s launch earlier this year. As these have moved through the system we are only just starting to see these become actual loans. The fear is that the conversion rate from assessments will remain low due to this delay.
The lofty goals of the Green Deal
In March Greg Barker, the energy minister championing the Green Deal, suggested that his target for the year was to get 10,000 loans in place. This might seem a very long way off right now, but it is still possible – there is sure to be a rush as the cold weather bites at the end of the year. Official figures will be released at the end of the month which should stop much of the speculation as to future trends in uptake and progress of Deals from assessments to loan plans.
In the meantime, why not take a look at our Green Deal Assessor Directory to find a Green Deal assessor near you? Or complete our energy assessment to get ideas for energy solutions that will work for your home.