Will the Green Deal work?
The new government initiative The Green Deal is gathering steam and will become a reality in October 2012.
What is the Green Deal you ask? Well it’s the part of the UK governments pledge to cutting CO2 output by 34% by 2020, to do this one of the big initiatives is to retrofit as many houses as possible with modern insulation and micro power generation. The better insulated homes and businesses are the less energy they will use to heat them.
The way the Green Deal will work will be through unsecured loans that will be re-paid through the properties energy supplier. The savings that are made through the new installed measures must be greater than the installation costs. The loan is then added to the properties monthly energy bill and stays with the property even if the owner sells the property on.
One of the glaring factors that might not work in this grand scheme is if the loan interest rate is too high. If a consumer can arrange a loan through a high street bank at a better rate there is little incentive for home or business owners to use the Green Deal’s financing system. The government has gone to great lengths to try and make the system work for the vast majority of people but without super low interests rates the whole initiative will fail to find subscribers.
Another challenge that the government might have to face up to is the ‘can i be bothered’ factor. Free loft insulation has been around for a number of years and what installers have found is that people are resistant to having it done because it means clearing out the loft! Which is understandable if your loft is where you store a lot of things, why would you want a bunch of builders coming in and upsetting your system?
Some of the savings that have been associated with the Green Deal are quite hard to justify within the strict regulations that have been laid down. The Green Deals Golden Rule states that the costs of the work carried out must be enveloped by the savings which they produce. This is quite easy to justify with loft insulation which is cheap to install and quick to payback. But when it comes to double glazing the initial costs can be high and the return on investment can run over the 25 years that the Green Deal must work to.
Hopefully highlighting these few points might get the government to sit up and listen to what the market needs, it’s wishful thinking but one has to try! We hope this article helps you make an informed choice when it comes to the Green Deal.
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