You may want to make energy-saving improvements to your home but simply can’t afford to pay for the work. A scheme is available to help you with this in the form of a loan. The Green Deal was once a government scheme but is now available through private companies. Here, we’ve described what the Green Deal is and the energy-saving improvements you can use it for.
What is the Green Deal?
As mentioned above, the Green Deal used to be a government scheme. The initiative was created to encourage homeowners to carry out energy-saving improvements. For example, installing double glazing, having adequate insulation or upgrading the heating system. Help was provided by way of a loan that could be repaid over a term of 10 to 25 years. The original government scheme closed in 2015 but now you can apply for it through private companies.
Available in England, Scotland and Wales, you can take advantage of this scheme if your home has an electricity meter. This also applies to prepayment meters. For rented accommodation, both the landlord and tenant have to agree to the improvements for the loan to be approved.
How does the Green Deal scheme work?
Once your home has been assessed and you’re approved for a loan, you decide which improvements you want to have done and how to pay for them. We’ll explain this in more detail below. The Green Deal loan is then repaid via your electricity bill. The loan cost shouldn’t be higher than the energy savings you stand to make. Therefore, you shouldn’t have to pay a higher amount for your energy bills than you already do and, if you’re lucky, the amount may even decrease. This isn’t guaranteed, however, as rising energy prices can’t be taken into account and the savings on your energy usage are estimated.
What improvements can you use the Green Deal for?
Provided that the energy-saving measures are recommended in your Green Deal assessment, you can make these improvements:
- Upgrade your heating
- Insulate your walls or loft
- Use energy-efficient lighting
- Replace your doors and windows
- Install secondary glazing
- Add draught proofing
- Generate renewable energy, such as with solar panels or a heat pump
How to qualify for the Green Deal
Your property needs to be assessed to check your eligibility for a Green Deal loan. A Green Deal assessor will check your home and discuss your energy use. You may be asked about the type of heating in your home and how often it’s used, what other appliances you use in your home, if you already use any energy-saving measures and how many people are in your household.
Afterwards, you’ll receive a Green Deal advice report containing:
- An Energy Performance Certificate (EPC) detailing your home’s energy efficiency rating
- Recommended improvements, according to the assessor
- An assessment of how much energy is used by you and the other occupants
- An estimate of the savings you could make on your energy bills
- A statement as to whether the lower energy costs would adequately cover the cost of the improvements needed
You can find a Green Deal assessor or a Green Deal provider who can recommend an assessor for you here. Some assessors charge for carrying out the assessment so be sure to check this first.
What happens next?
Once you’ve had a look at the recommendations in the report, the estimated costs and the approximate savings, you can decide if you want to go ahead with any of the work and, if so, how to pay for it.
For example, you may prefer a Green Deal provider to arrange the work for the improvements in your Bexley home and either pay for the cost yourself in advance or arrange a Green Deal finance plan. Or you may prefer to find your own installers, either paying for the work in advance yourself or using a combination of payment methods, such as your own money and a Green Deal finance plan. You may even be able to combine a Green Deal loan with financial help from another scheme, such as the Renewable Heat Incentive (RHI), the Affordable Warmth Obligation or the Smart Export Guarantee.
Whether you use a provider or go direct to an installer, the relevant party will provide you with quotes. If using a Green Deal finance plan, you’ll be provided with details of the repayment terms.
How to apply for a Green Deal finance plan
To use a finance plan, you’ll need to give a copy of the assessment to a Green Deal provider. They will find an installer and provide you with a quote for the energy-saving improvements. The amount you can borrow will be based on the anticipated savings on your energy bills. The provider will advise you on how much you will have to repay and for how long. Your repayments shouldn’t be higher than the expected energy bill savings. An interest rate will be set by the provider depending on the loan amount and this will be fixed throughout the repayment term.
Repaying your Green Deal loan
Your loan will gradually be repaid via your electricity bill. If you have a prepayment meter, a small daily amount will be deducted as part of the repayment. Each Green Deal loan applies to the property rather than belonging to the person who applied for it. This means that if you move out of your flat in Pimlico, you’ll no longer be charged for the improvements. The repayments will be passed to the new occupant as they will then benefit from the improvements made.
Is the Green Deal right for you?
When you want to make improvements to your property’s energy efficiency, the Green Deal is one way to finance the costs. However, there are other options to consider too. For example, the government’s Energy Company Obligation (ECO) scheme and the Boiler Upgrade Scheme (BUS). Another option is via a green mortgage or remortgage. Our mortgage brokers are on hand to discuss your energy efficiency requirements and advise you on the financial benefits available when taking out this type of green finance. Just give us a call on 01322 907 000 for more information about green home loans.