The New Green Deal: what you need to know

Chris Smith

July 24, 2014

November 13, 2018

The New Green Deal: what you need to know

The coalition's Green Deal has received a pretty bad rap since it launched in 2013. The scheme, designed to give homeowners from any income bracket the chance to make their homes more energy efficient, offers affordable finance to install ‘green' measures such as cavity wall insulation and double glazing. Following a barrage of criticism about the complexity of the Green Deal, 2014 has seen a substantial makeover for the initiative. Here's our guide to the basics.

How it works

Quite simply, the Green Deal is a way for homeowners to fund energy saving measures in their homes through government loans. Loan repayments should never exceed what you're saving each month on your energy bills, and should ideally be less, so you still notice the savings. The main thing to remember is that, in theory, your monthly bills shouldn't increase at all. Here's why:

  • Your Green Deal loan repayments are incorporated into your energy bill and paid by your energy provider each month
  • You only pay back what you're estimated to save each month. This means that even with your repayments on top, your bills won't be more than they usually are
  • Savings estimates are designed to be quite conservative. Should you reduce your energy bills by more than the estimate, you'll see even cheaper bills - even with the repayments

Sound confusing? It's easy to compare how much you're spending on energy bills each month, before and after your energy efficiency measures, simply by using our free budgeting software.

This year's “sweeteners”

Luckily, a fairly dire turnout for the deal last year means an even better deal for us in 2014. Depending on the costs of installation, homeowners can claim up to £1500 cashback on selected home improvements through the Green Deal Home Improvement Fund.

Pick any two energy efficiency measures from a list of 12 and you can apply for £1000 to cover the costs. Plus, if you've moved into your home in the past 12 months, you could receive a £500 incentive for improving your home in line with the Green Deal, even if you just add a new boiler. Applicable measures that qualify for the Green Deal Home Improvement Fund include:

  • Floor insulation
  • Cavity wall insulation
  • Double/triple glazing
  • A condensing mains gas boiler
  • Energy-efficient replacement doors

How to get started

If you're interested, the first thing to do is arrange for a Green Deal Assessment Report. Costs for this can vary, and the average price works out at £120. Fortunately though, as part of the government's Green Deal revamp, you can now claim £100 cashback back from the assessment cost, provided you go ahead with the work.

Some companies also offer their own cashback incentives if you also use them to install your energy efficiency measures, so you might even get the money back twice. Search for an assessor or supplier here, and don't be afraid to shop around. Once you're done, you'll get a report recommending the most lucrative measures for your home and outlining your estimated savings - then the rest is up to you.

Read up on the Green Deal website or call the Energy Saving Advice Service for more information.

Posted by Money Dashboard

  

Chris Smith

Money Dashboard

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