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Government axes funding for Green Deal scheme

Free money for efficiency home improvements ends

End of the Green Deal

Funding for energy efficiency home improvements via the Green Deal has ended

The UK government has effectively killed its flagship scheme to insulate homes because it says take-up has been too low. It has also admitted that it has nothing to replace the energy-efficiency Green Deal programme with.

While this means less support for householders willing to make their homes more energy efficient, the Green Deal was also an expensive and unsuccessful scheme.

Which? executive director Richard Lloyd said: ‘We welcome this move as the government can’t keep throwing money at a scheme that has spectacularly failed to take off.  

‘Ministers should now work with consumers to put together a realistic new approach that is genuinely good value and helps people to save money by saving energy.’

Don’t miss our expert guide to cutting your energy bills.

Green Deal

The Green Deal was introduced in 2013 as a way of enabling people to finance energy efficiency home improvement through a loan paid back via savings made on energy bills. Only about 15,000 people have taken out a Green Deal since, far short of the uptake the government expected.  

To boost uptake, the government then introduced the Green Deal Home Improvement (GDHI) scheme, which gave cashback to householders installing certain energy-saving measures such as double glazing, a new boiler or insulation. The GDHI was a lot more successful, with millions of pounds being allocated on the day it was launched.

But yesterday the government announced it is stopping any funding to the Green Deal Finance Company, the company which issues Green Deal loans. This move, as well as the end of the GDHI, means the government has in effect killed the Green Deal.

What does it mean for consumers?

  • Householders who already have a Green Deal plan or those in progress will not be affected by the cuts.
  • Householders who have GDHI vouchers can still use them.
  • It is unclear what will happen to those householders who have just had a Green Deal assessment carried on their property in a view to getting a Green Deal. It’s likely they will not be able to claim back the cost of the assessment (about £100-£150)
  • For those looking for financial support to make energy efficiency improvements to their home, there simply isn’t much support available anymore. The remaining scheme is the Energy Company Obligation (ECO) scheme, which provides support this year to low-income and vulnerable households for energy efficiency home improvements.
  • There are still some private initiatives available to get a ‘free’ boiler.

Slashing green subsidies

The Green Deal announcement is the latest in a series of moves made to scrap green energy policies, which has also included the ending of onshore wind farm subsidies, cuts to solar farm subsidies and the abandonment of regulation to make all new homes ‘zero carbon’ from 2016.

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