It’s recently been revealed that the taxpayer funded scheme to help homes be more energy efficient, known as the Green Deal, has been axed. The government announced in July that there will be no more loans or cashback, due to a low take up and reports of shoddy workmanship.
Find out more about the Green Deal and why it’s been such a catastrophic failure.
What is the Green Deal?
The Green Deal was introduced in 2012 to encourage homeowners to install energy saving home improvements. The government wants homes to be more energy efficient, so decided to offer loans to cover the upfront cost of installations such as new boilers, double glazed windows and different types of insulation.
The Green Deal Home Improvement Fund consisted of £540m cash, funded by taxpayers, which was meant to act as incentives for homeowners to take up the improvement works. So the two-phase scheme included loans and cashback to attract homeowners – the only problem is it didn’t.
Why did it fail?
According to government figures, just 2% of the households which were originally assessed for Green Deal improvements works actually signed up to the deal. Maybe one of the reasons so few homeowners decided to go ahead was because the loans weren’t attractive – Green Deal loans charge borrowers a high interest rate of 6-7% and then last for 25 years. One couple in Plymouth borrowed just £456 but the 25 year repayments added up to £1,550 – hardly a good deal for people who are trying to reduce their carbon footprint.
Many homeowners have also complained about not receiving the cashback they were promised. The whole process was just too complicated, with many who had tried to apply for the scheme describing it as chaotic. The fact that people also had to pay a non-refundable Green Deal assessment fee of £120 has also been criticised.
Another key reason why the Green Deal has turned into an embarrassing failure is reports of bad workmanship and industry standards. Homeowners had to have work carried out by Green Deal registered assessors and installers, but this did not enforce the industry standards the government had hoped. It caused problems for thousands of people who were left with botched installations and improvement works, no cashback and a big loan to pay off.
No more Green Deal
The Green Deal scheme has been axed due to the poor standards of workmanship and the downright pathetic amount of households using the scheme. The government has yet to announce a replacement scheme, but there is still £4m in the cashback pot for those who have had energy efficient improvement and want to apply.