Green Deal recieves £200 million boost
The government’s ‘Green Deal’ will receive an extra £200 million to encourage homeowners to eco-retrofit their properties
Chief Secretary to the Treasury Danny Alexander has released news today of a £200 million incentive boost for the take up of the ‘Green Deal’ programme.
Alexander made the announcement at the annual National House Building Council lunch today, and said further details of the plan, including how the finances are to be delivered, would be announced during next weeks Autumn statement.
The adoption of the ‘Green Deal’ has been highlighted as a major concern ahead of the start of the programme, and this latest fund has been described as ‘getting the Green Deal off to a flying start.’
The scheme is intended to retrofit 14 million homes by 2020 and help the UK meet its carbon reduction targets of 50 per cent (on 1990 levels) by 2025 and 80 per cent by 2050.
Alexander said that this new offer could save early adopters ‘hundreds of pounds’ and the notions of ‘green and growth must progress together’.
The ‘Green Deal’ scheme intends to improve the energy efficiency of British properties by encouraging homeowners to introduce energy saving measures without paying upfront costs.
Loans will be offered by accredited Green Deal providers and installers which are then paid off through a corresponding reduction in bills. The ‘golden rule’ of the scheme is that the cost of paying back the loans must not exceed the savings associated with the energy efficient retrofit.
However the cost of finance, interest rates and consumer take-up have all been highlighted as potential barriers, with industry experts and trade bodies stating the scheme is unlikely to attract major interest until 2013/14.
The government released its long-awaited consultation document yesterday, in which it confirmed that £150, or 5 per cent of the total Green Deal package, would be offered in cashback to homeowners who signed up for the scheme, however this would be added to the loan given to home by the provider.
Liz Laine of Consumer Focus said, ‘I don’t think the £150 cashback will be particularly desirable. I am pretty sure homeowners will spot that they will end up paying interest on the sum over 25 years if it comes out of the Green Deal charge. We would rather see financial incentives to put long-term value on energy efficiency in the housing market through differentials on tax or stamp duty changes.’
Energy and Climate Change Secretary Chris Huhne has said: ‘We want the Green Deal to be a game changer for British consumers who’ve been buffeted by global energy prices. The earlier you Green Deal your home, the quicker you’ll benefit from a warmer and cosier property as well as protect yourself from rocketing prices.
This big injection of government funding delivers on our promise to ensure the Green Deal hits the ground running, and make it as attractive as possible so that people start to benefit from day one.’