The idea of the Green Deal was that people would borrow money from their gas or electricity companies to insulate their house and replace their old central heating system and windows. This money would be paid back over 25 years as part of the fuel bill. The government seemed to think that this would all be completely painless. The customer notices a massive fall in the fuel bill after all this work has been done and gladly pays a little bit extra to the gas or electricity company to repay the loan. The customer is still better off in spite of the loan because the fuel bill has fallen so much.

How well does this actually work? In practice not all improvements made to a house will repay huge savings in fuel bills. This is true of improvements that don’t cost too much money. Ordinary cavity insulation if the walls are in good condition or ordinary loft roll insulation are both low cost improvements that would lower fuel bills and would pay for themselves in about 5 years. But some improvements are very expensive. Insulating a badly cracked old wall might require very expensive water resistant cavity insulation or it might be a solid wall. Solid walls can have either external insulation or they can have a new timber frame insulated wall built inside the building. Neither of these would be cheap. Double glazing is also very expensive. It is worth having double glazing for lots of reasons. It looks better, it makes the house less draughty and burglars find it especially easy to climb through old windows that look like they’re about to fall out. From the point of view of comfort and safety, I would highly recommend having your house double glazed. But if you’re trying to save money on the fuel bills it’s a really poor investment. The chances are you won’t live long enough to recover the cost of double glazing from the few pounds a week it actually saves in fuel. Solar panels and heat pumps are also things that are dearly loved by energy consultants but deeply hated by customers because they are so expensive. So the philosophy of Green Deal has a fundamental flaw – improvements don’t always pay for themselves in reduced fuel bills. It is a delusion.

Another common complaint about the Green Deal is that the interest on the Green Deal loan is high. If you want to make improvements to your house borrowing money from somewhere else is probably cheaper. The official government figures seem to reflect a great deal of frustration among the public with the Green Deal. In some areas about one household in fifty has had a Green Deal assessment. They also show the Green Deal assessment to be far more popular than the Green Deal financial plan. This has been taken up by fewer than one in a thousand households. The vast majority of Green Deal customers will have the assessment done but will borrow money from elsewhere. Is it worth paying hundreds of pounds for an expert to walk around your property and give you some advice? It is if you don’t have a good technical knowledge of all the issues. So the Green Deal assessment still has some value although many people wouldn’t need it. The Green Deal finance plan has none.




What Do I Think of The Green Deal?