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Green Deal launched today but questions remain

By Katie Anderson on January 28, 2013

The Green Deal launched on Monday amid much fanfare, but is the Coalition’s flagship environmental policy fit for purpose? Will the initiative reduce carbon emissions in the UK? Do energy consumers even understand the scheme?

Questions remain as government ministers voice their support for the policy, which was designed to help people “stay warm for less”. Will the Green Deal achieve this lofty aim? A number of industry experts believe not.

Part of the problem is that the Green Deal is not especially easy to understand. Whether the complexity of the scheme was deliberate or accidental, the fact is that many people are confused by its provisions. In essence, the Green Deal is an environmental policy that provides loans for people who want to improve the energy efficiency of their homes by installing new central heating boilers, loft insulation and other energy-saving measures. The loans are linked to the properties for which they are taken out, not individual energy users, so they can be inherited by new owners or occupants.

The Coalition believes the Green Deal will provide a genuine form of help for people who are struggling to pay their energy bills.

Deputy Prime Minister Nick Clegg noted: “The Green Deal will help thousands of homes stay warm for less. Those people will benefit from energy-saving improvements and their energy bills will fall”.

There is a considerable degree of confusion over the cost-effectiveness of the scheme.

The Head of Energy Bill Revolution, Ed Matthews, said: “The Green Deal and Energy Company obligation will not stop fuel poverty in the face of high gas prices.

“We call on the Prime Minister to use money from the carbon tax to super-insulate this country’s homes. This will provide households with five times more subsidy to insulate their homes and not add a penny more to energy bills”.

The Chairman of the Residential Property Surveyors Association (RPSA), Alan Milstein, added: “For many consumers, taking on a Green Deal loan may not be the most cost-effective mechanism to fund any green improvements to their property”.

Mr Milstein cited early repayment penalties and the saleability of homes as major drawbacks. Upfront assessment fees and high interest rates (approximately seven per cent) on Green Deal loans are also sticking points.