"The Energy Bill introduced to Parliament on 8 December 2010 includes provision for a new "Green Deal". which we believe will 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 recoup payments through a charge in instalments on the energy bill."
This sounds remarkably similar to the deal where you rent your roof out - no upfront cost but the proceeds go to a third party and the deal stays with the house.
I assume that it would only be a better deal if you could expect to pay off the loan and then start keeping any proceeds for yourself. Nominal payback for self financing photo-voltaic seems to be around the 7-10 year mark (from illustrations given to friends).
We are being tempted by the dark side through the gross subsidy currently available for photo-voltaic installations so are obviously wondering if it would be better to wait for a freebie loan.
However apart from the free electricity around noon in summer (when we don't usually use very much) there doesn't seem to be much benefit, and if all the potential savings on your electricity bill are immediately taken to repay the loan then I can't initially see this as a major attraction.
I may well be missing a point here; what does the team think?
There are a range of options, but our house is double glazed, cavity wall insulated, and the loft insulation is reasonable given that we have a chip board floor over insulation. So not much room for improvement there. The only thing left seems to be photo-voltaic generation and a more efficient boiler. Oh, and some minor(ish) things like floor insulation and more efficient energy use. Would they cough for a new fridge, washing machine and telly?
I note that the assesment will be based around Energy Performance Certificates. Perhaps an attempt to use the people trained at their own expense to be HIPS assesors? Although to be a Green Deal assesor will require extra training. "Fool me once, shame on you. Fool me twice, shame on me." perhaps?
The proposed list in
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interesting as it includes more efficient water usage, floor insulation, lighting etc.
However the final list isn't due for a while, and if you have an assesment it may well decide that there are no cost effective measures to justify the finance.
"The Energy Bill introduced to Parliament on 8 December 2010 includes
It's only partly similar
Firstly there is no subsidy involved here and secondly the loans are to be made on "normal" commercial terms with the only difference being that they are tied to the house, rather than the occupant.
But there's no guarantee that the nominal saving on the bill will repay the loans and the risk of them no doing so rests with the occupant.
Personally, I can't see too many people being prepared to buy a house with someone else's loan still in situ, they will expect it to be paid off by the outgoing owner and in the rental sector I can see problems with people not being told about these loans at all (until it is too late). ISTM that there is potential for abuse by LLs using utility company loans to pay for house improvements, charging a higher rent because of those improvements and then having the (sucession of) tenants pay back the loan as well.
ISTM that they will only be useful for the (very) small number of people who want to do improvements that they reasonably expect to fully pay back themselves, but can't fund any other way. The idea (as in the article) that all 26 million households will take advantage of this is ludicrous.
(And I'm assuming in the above that HMG will make sure that the existence of these loans doesn't affect, in any way, an occupants right to a free market choice of supplier, something which as yet, I've not seen them say)
> "The Energy Bill introduced to Parliament on 8 December 2010 includes
Replying to my own post I should have read all the documents first.
It seems that they have thought of this and will requite LLs to gain explicit confirmation from tenants that they are aware of the loan. I'm impressed, I bet it wasn't in the first draft :-). Nevertheless, I can still see tenants being reluctant to take on this liability.
> "The Energy Bill introduced to Parliament on 8 December 2010 includes
Not quire - in the sense that there are no artificial incentives to make non economic or environmentally unsound options desirable. This seems to be "markets" led solution and hence a far more sustainable one.
PV would never be cost effective without the subsidy from the FiT. The deal proposed here seems to work by encouraging installation of any solution that will have a viable payback in real terms without subsidy. If technology progressed to the point were PV became viable in absolute terms, then it would be back on the table as an option.
I don't think this is going to be a freebie loan as such. I would expect from the providers point of view they will first look at the available improvements to the properties energy efficiency (you can see the govt, attempting some "joinrd up thinking" here - we have all these pointless energy assessors sat about etc). Work out a cost for the proposed work, and estimate the annual savings expected in energy reduction.
From there they can work out the cost of the loan to cover the work on commercial terms, and if a payback schedule to pay off the loan (while maintaining their customers bill at roughly previous levels or a bit below) is achievable in a suitable time period.
So as a customer, you get insulation, and then carry on paying the same as before on your bills for the next 5 years. In that time the loan provider gets their loan paid with interest on commercial terms. After that your bills fall to the real cost of your current energy usage, and hopefully you now reap any reward.
For smaller providers (local builder, estate agent etc). They would probably work with external finance houses to provide the working capital. Larger firms (energy companies etc) could obviously do more of it in house.
No, and that's a good thing. Because this system is being lead by a "market", it will only make sense to install something in cases where there is a hard financial (and hence usually environmental) benefit to deploying it.
I think perhaps you are slightly - once you realise there is no tax payer / other energy bill payers money available for incentives - it actually gets simpler.
As usual there is nothing to stop DIYing a near equivalent of the scheme where you get a loan to do some work, and use the immediately realised savings to pay for the loan. The only extra wrinkle here is that the loan is attached to the property and hence transferable to the next occupant.
The intention presumably being to encourage take up among the folks who otherwise would not be motivated enough to DIY.
Indeed. From an outside assessment point of view one would probably conclude that you are not eligible for the scheme since there are no longer enough "low hanging fruit" style savings left to be made in your house to pay off any significant loan.
If the fridge were a built in one, then one could argue that they ought to be able to. Whether they will be permitted is another question, as is will the proposed replacement appliance last long enough to achieve payback.
There is also the frequent flaw of ignoring the embedded energy / environmental cost of making something in the first place. When you take that into account it is often preferable to keep the existing til end of life and then replace with whatever is most efficent at the time.
Yup, almost certainly. This however I expect won't work, on the grounds that the current energy assessors don't actually appear to have the skills or knowledge to do the job well enough for any purpose other than the production of a nice certificate. I can't see a building being prepared to take out a loan (or commit equal value of capital) to install cavity wall insulation for a customer, unless he is actually sure the levy on the bill will be enough to pay off the loan. Customers will no doubt want some guarantee that their bills will remain the same or go down after the work is done.
Perhaps. Realistically one would have to teach them enough about building construction in the first place. Also its a slightly different world view from their PoV - they are no longer labelling a place with an absolute energy efficiency rating, but instead need to think about the effects of improvements in hard cash terms.
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> is interesting as it includes more efficient water usage, floor
>>> "The Energy Bill introduced to Parliament on 8 December 2010 includes
In the bits I skimmed I didn't see anything to suggest that you couldn't participate in the subsidised photo-voltaic scheme. The rates are due to go down over the years but AFAIK you will still be able to get a feed in tarrif in 2012. It doesn't seem equitable that you can get the PV scheme for cash or use your own loan but not use the Green Deal loan. This makes the scheme far less attractive. I would have expected that a lot of any calculated payback would come from PV subsidy (assuming that the new rates are still reasonably attractive).
>>>>>>>> "The Energy Bill introduced to Parliament on 8 December 2010 includes
One might argue that is because its not green...
Well indeed - anything is conjecture to an extent at this time.
However the central point of the green deal would seem to be it encourages updates to properties that are financially viable in real terms without subsidy. It is these that are most likely to be environmentally sound as well. Something like PV is currently pointless (in this country) from an environmental point of view. Its only attraction is as an investment opportunity that permits one to get a snout in the subsidy trough.
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