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Green Deal

The Green Deal

Essentially the Green Deal scheme allows you to upgrade the insulation to your house at no additional cost to yourself - in theory. Your house is assessed and insulation improvements and energy saving measures are detailed. The measures chosen must end up costing less than they save over a ten year period. The cost of the installation of these measures is added to your utility bills so that in theory the bills either fall or at least do not rise.

Some concerns have been raised about Green Deal

Green Deal is backed by private finance and so of course, as well as the cost of the installation itself, there also has to be the profit which the investors will need to make built in. This means that you are essentially be taking out a long term loan to pay for the measures. An obvious question is: is there an upper limit to the interest charged? To which I do not know the answer.

The Green Deal may end up having implications when it comes to the sale of the house; the additions to the utility bills stay with the house and may end up putting buyers off. They might end up being "those houses with high bills".

The Green Deal may well end up reducing the amount of insulation being installed. The Green Deal replaces current subsidised loft and cavity wall insulation schemes and according to DECC's own figures installations of these measures would actually drop under the Green Deal.

The Green Deal will not meet the needs of worse-off households or people in fuel-poverty; these households use very little energy in the first place and so the criteria for the Green Deal (that the savings must be greater than the costs of installation) would not be met.

Another possible concern is that when insulation standards are improved that homeowners may end up, for example, raising the rooms temperatures in their houses. Savings on bills should probably take into account real world data about how people's behaviour can change if their house becomes more efficient.

Having said all that the Green Deal is a step toward the reduction of energy use and that is very much the right approach to start taking. The difference between providing loans at reasonable rates for energy efficiency measures in buildings and letting people do it for themselves? Well energy prices are still relatively low so you would want something akin to an escalator tax on fossil fuels combined with means tested support for those less well off - but that would be unpopular - there go my plans to run the country....again.....

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