Why do we need a Green Deal?

Britain has some of the oldest building stock in Europe. Our draughty homes are poorly insulated, leaking heat and using up energy. As consumers, we pay a high price for inefficient housing – and so does the planet. A quarter of the UK’s carbon emissions comes from the energy we use to heat our homes, and a similar amount comes from our businesses, industry and workplaces.Chris Huhne, Secretary of State of Energy and Climate Change

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The environment

The government has made huge commitments to reduce Carbon Dioxide emissions and this is one of the main drivers for this policy. Also fuel is becoming more and more scarce and therefore more expensive, so anything that we can do to use less, without detrimentally impacting our lives will be a good thing.

The economy

Three quarters of the energy we use in our homes is for heating our rooms and water, therefore this is a huge focus for this initiative, but there are other reasons also. Whilst creating a £7 billion private sector it should also create in the region of 250,000 jobs. Currently we import around a third of the gas we use in Britain, and with production declining this is seen as a initiative that can reduce the need to rely on foreign imported gas.

Lower Income Households

Lower income and vulnerable households may not save money through energy efficiency because many do not have the heating turned on long enough to heat their homes sufficiently, so increased efficiency may mean they will enjoy warmer homes rather than cash savings.

Complimentary to the Green Deal will be the new Energy Company Obligation (ECO). This scheme will focus energy companies on improving the ability of the vulnerable and those on lower incomes to heat their homes affordably, and on improving solid wall properties, which have not benefited much from previous schemes. Homes which can only be made energy efficient through expensive improvements such as solid wall insulation need additional support to bring down costs enough to meet the Green Deal’s golden rule.

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What is the Green Deal?
The Energy Bill introduced to Parliament on 8 December 2010 includes provision for the new 'Green Deal', which is intended to revolutionise the energy efficiency of British properties. The Government is establishing a framework to enable private firms to offer consumers energy efficiency improvements to their homes, community spaces and businesses at no upfront cost, and to recoup payments through a charge in instalments on the energy bill.
How much will be made available via Green Deal Finance & Green Deal Grants?
Originally, the government suggested that around £6,500 will be available per home. However, the coalition government have hinted at that figure rising to around £10,000. Nothing is confirmed however, a home will only receive what is needed to sufficiently improve the energy efficiency.
How will I repay the Green Deal Finance / Green Deal Grants?
The loan will be attached to the property in question as opposed to the individual. Green Deal Finance payments are calculated to ensure that all homeowners are financially better off by making sure that the total repaid is less that the resulting savings. The repayments are expected to be added to the energy bill and come from the energy savings.
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