The Green Deal is UK government policy, it was launched by the Department of Energy and Climate Change on 1 October 2012 to permit loans for energy saving measures for properties in Great Britain. The loans are repaid through energy bills and transfer with the property rather than those who took out the loan, this means new tenants or owners become liable for a debt they did not enter into, a novel concept in English law. Homeowners (or businesses) will be liable to repay the Green Deal charge, even if the promised saving on their energy bills does not materialize. The intention is that savings on energy bills will outweigh the cost of repayments, This is referred to by DECC as the golden rule. However, the so-called “Golden Rule” isn’t so much a rule as an aspiration. There are 45 different improvements covered by the Green Deal and Government estimates say that a typical three bedroom semi-detached house could save £270 a year from solid wall insulation. The loans became available on 28 January 2013. Though assessments could be conducted from 1 October none were done in the first month and only five had been completed nationwide by 28 January 2013. The scheme requires an assessment of £150 or more to determine what if any work can be done. The cost of this has been suggested to deter many people. The Government believes Green Deal loans will be repaid at a rate no more than 6.92%, This is significantly higher than average household loans. On a loan of £5,000, the overall rate that is repayable is just under 8% over 10 years, or 7.7% over 25 years. Further to these charges there will be an initial set up charge followed by a £20 annual fee, failure to repay a Green Deal will lead to disconnection of gas and electricity supplies. Recent surveys have found little awareness among the general public for the Green Deal The high interest rates and charges of the scheme have been heavily criticized.
The Green Deal – What does it cover?
- Insulation – such as loft or cavity wall insulation
- Double glazing
- Renewable energy technologies – such as solar panels or wind turbines.
What is it?
The Green Deal is the Government’s flagship home insulation programme – launched in January – offering households the opportunity to increase the energy efficiency of their homes through 45 different improvements.
You can choose to either pay outright for the improvements or get a loan, which is paid back via your energy bill.
Loans are tied to the working life of the improvements, which will typically last for more than 20 years . Plus, because the Green Deal loan is attached to the house, if you move the loan won’t move with you and will become the responsibility of whoever buys the house.
The golden rule of the deal is that you should never have to repay more than the savings you will make on your energy bills from the efficiency improvements.
The estimates on savings are made from your energy and heating use, but they are purposefully lowered to allow for household variation in order to keep to this rule.
In essence this means that energy bill should not rise as a result of paying for improvements and, at worst will stay the same. This does mean there is no guarantee that while you are repaying the loan, you will make any savings.
Read more: http://www.dailymail.co.uk
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