Green Deal Finance Paves Way for Mass Insulation

11 April 2013

A financial agreement is now in place that will see the Green Deal act as a catalyst for the installation of insulation across the UK.

Under the Government’s latest initiative tackling carbon emissions, climate change and fuel poverty, householders will be entitled to financial assistance allowing them to install Cavity Wall Insulation, Loft Insulation and a number of other energy saving and energy generating measures.

"I am delighted to confirm the completion of the £244m financing package with our principal stakeholders,  the Department of Energy and Climate Change (DECC) and the UK Green Investment Bank,” said Mark Bayley, Chief Executive of the Green Deal Finance Company.

The confirmation comes a little more than two months after the scheme was launched. Until now, householders have been able to have assessments carried out but authorisation of plans has not yet been permitted.

The Government initiative allows homeowners, landlords and tenants to obtain upfront funding to make energy efficient home improvements. The sum borrowed will be repayable through the property’s electricity bill.

“The Green Deal gives people the opportunity to improve the efficiency of their homes, make them warmer and protect themselves from rising energy bills," stated Energy and Climate Change Minister, Greg Barker.

The Government hopes to have assisted more than one million households with insulation – including Cavity Wall Insulation and Loft Insulation – by 2015.

According to DECC and GDFC, Green Deal plans will incur an annual interest rate of 6.96%. Those taking out the loan will be required to pay a £63 set-up charge and then a £20 annual administration fee.

While these fees are sure to put some off the idea of installing Cavity Wall Insulation and Loft Insulation, the scheme’s ‘Golden Rule’ decrees that the sum of repayment must not exceed the amount saved by completing the improvements in the first place. Effectively, this enables consumers to improve the energy rating of their property without feeling it in the pocket.

"By ensuring that householders can only borrow what they can expect to save in energy bills, and by offering a fixed rate for 10 to 25 years, Green Deal Plans will be affordable and widely available to over 80% of the population,” said Bayley. “No other consumer credit product offers a fixed rate for up to 25 years and is this inclusive."
Government figures released earlier this month show that 9,268 Green Deal assessments had been carried out between the scheme launching (28th January) and the end of March. Although initial uptake was relatively low, more than 7,000 assessments were lodged in March alone.

“It is clearly very early days,” said Barker, “but the latest figures on the Green Deal show that this new market is gathering real momentum. Overall this is a really promising start for the Green Deal.”

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