Green Deal outlined by Government

"Green Deal outlined - Cheers!"

The Green Deal will be about putting energy consumers back in control of their bills and banishing Britain's draughty homes. That was the message from Chris Huhne - Energy & Climate Change Secretary - yesterday as the Government outlined it's Green Deal initiative.

The announcement outlined the three big benefits of the scheme:

1) That every British home will be able to install energy saving measures like insulation and energy efficient boilers at no up-front cost.

2) Energy companies will provide £1.3 billion a year to help people benefit from the scheme, no matter what their income or type of property.

3) The Green Deal is expected to kick-start around £14 billion of private sector investment and could support 65,000+ insulation and construction jobs by 2015.

As an incentive to homeowners to apply for the Green Deal, a cash back of £150 could be available, funded through private sector Green Deal finance.

The installation costs, paid for up front by private sector funding, will be repaid over time out of the energy savings the property makes.

The Secretary went on to state that he wanted to insulate Britain's homes not just from the cold weather, but also from the chill winds of global fossil fuel price rises.

Now we've got to wait for the detail and application process - which will start sometime around October 2012. The Government reckons overall average household energy bills in 2020 will be 7%, or £94, lower than without energy and climate policies.

More information regarding the announcement can be found on the DECC website - click here.

photo credit: jennifer

NOTE: SInce this story was published, later on during the 24th November, the Government announced £200 million of new and additional funding to "provide a special time-limited introductory offer to boost the early uptake of the Government's Green Deal energy efficiency scheme".

It's hoped the offer will encourage early adoption by homeowners, saving them hundreds of pounds in the process.

The Green Deal framework will be launched from October 2012.

More information regarding the extra £200 million can be found on the DECC website - click here

Green Deal regarded as proof of Coalition's green credentials

The Guardian reported last week how the UK's Green Deal had begun it's parliamentary journey.

The Green Deal is a new initiative that will deliver energy saving home improvements to homeowners and tenants with no upfront costs - the investment being a mixture of public and private investment from (amongst others) big high street names like M&S, Tesco and B&Q.

Homeowners will pay back the 'loan' via the energy savings the improvement makes, whilst the companies backing the scheme will undoubtedly get some form of carbon credits etc.

As we reported earlier, (see here), The Golden Rule of any energy saving home improvement will be that it must save more money than it costs to install.

Payouts are expected to be capped at around £6000 and there are reports that Landlords could be forced to install green deal measures if asked to do so by their tenants.

The loans will be attached to the property rather than the owner, so anyone buying a property that's had green deal improvement work carried out will take over the loan 'repayment'.

The Government reckon 14m of the 27m homes in the UK would benefit from either loft, cavity or solid wall insulation.

Are there really that many homes without any sort of loft insulation fitted? Maybe I'm lucky but I can't recall knowing anyone who didn't have their loft insulated.

photo credit: robert s donovan

How the Green Deal will work

Reuters ran a very good article on how the UK's Green Deal will work, though an interview between the Energy Minister Greg Barker and Yale Environment 360.

Click here to read the full article for yourself.

I did just want to quote one answer from it though - once the politician had actually stopped spouting 'political speak' and answered the question put to him - namely, how will the Green Deal work?

Here's his answer:

"What we're going to do is go away from the stop-go, government-funded programs, and through using smart regulation, open up this market to the private sector. We believe we can create a market that will bring in billions of pounds of investment into energy efficiency for homes and businesses. We're going to create a mechanism whereby the cost of making these [energy-efficiency] measures can all be financed through pay-as-you-save models, with the finance being repaid over a period of 20 years through the bill on each individual property. Now, that's a big change. To date it had to be paid upfront, either by the individual homeowner or through a grant. By pinning the repayments to the bill of the property, it means it's not a debt. It's not even a mortgage. It doesn't need to be credit-scored, because if the individual living in that particular home moves, dies, ownership changes, or they cease to rent, it stays on the bill of that property, just like the conventional energy bill.

But there's one golden rule: The cost of financing the measures, which would be anything up to 6,000 pounds, must always be less than the savings anticipated from the installations [of energy-efficiency measures]."

So one 'golden rule' and upfront costs paid by private sector finance.

Sounding almost too good to be true.

photo credit: conor lawless

Where will the cuts fall?

Later today, we should learn where Government cuts will fall - specifically, which green initiatives will loose funding or be cut altogether.

It's pretty pointless speculating ahead of the announcements but we've read that the Feed-in Tariffs could be hit by a 10% cut.

The Warm Front scheme is also facing shutdown with the Government already confirming that it will come under the Green Deal scheme instead.

Micro-generators and suppliers of renewable heat equipment are also holding their breath, to hear what is going to happen to the Renewable Heat Incentive.

Whatever's announced, there are bound to be some unhappy people.

photo credit: suvajack

Coalition Government announce Green Deal for UK homeowners

Last week, Deputy Prime Minister Nick Clegg outlined plans for the new Green Deal through which up to 14 million homes could benefit from insulation, the payment for which will be collected through energy bills, but still saving households money - some of the worst homes could save around £550 a year.

The Government will begin the legislative process this Autumn with the the scheme expected to be in effect in 2012.

The Green Deal combines economic growth whilst promoting energy efficiency. It's aim is to reduce carbon emissions by making homes warmer, saving homeowners money and stimulating 'green recovery' in jobs.

Read the full press release at cabinetoffice.gov

It's unclear at this moment whether other energy saving methods like installing double glazing etc will also be covered in the Green Deal - the Governments announcement only mentions insulation which could imply loft, cavity wall or both.

photo credit: dichohecho