The Department for Energy and Climate Change has announced that it is to put £200 million into incentives to encourage people to take up the Green Deal.
The Green Deal is a proposed energy-efficiency scheme that will enable consumers to pay for energy-efficient home improvements, such as insulation, through a loan paid back as savings are made on energy bills.
The money could be delivered to customers as cashback, money off council tax, or even a discount on stamp duty when they sell their home. You can find out full details of the scheme in our expert guide to the Green Deal.
Short term incentives
The cash is being offered to encourage early uptake of the energy-efficiency scheme. However Which? is concerned that consumers may not be confident in taking up the Green Deal.
Which? executive director Richard Lloyd said: ‘It’s crucial that the government gets the fundamentals of the Green Deal right. If it’s not good value for consumers overall, short term incentives will not be enough to guarantee that this scheme will be a success.’
Golden rule of Green Deal
The key element of the Green Deal for consumers was the ‘golden rule’ – that they would never pay more per month on the loan than the amount saved on their energy bills.
However, in the consultation released by Chris Huhne this week, the proposed golden rule is based on average energy-saving rates. This means that many consumers could end up paying back more per month than they are saving.
Richard Lloyd said: ‘The Golden Rule was supposed to reassure people that Green Deal repayments would not exceed the savings made on energy bills. But if this is based on average figures then it could be meaningless for many.’