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MSE News: Green Deal launches to help insulate homes

edited 28 January 2013 at 1:04PM in Energy
161 replies 16.6K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 28 January 2013 at 1:04PM in Energy
"Households can get energy-saving improvements installed from today without having to pay the cost up-front..."
Read the full story:
Green Deal launches to help insulate homes


Also see Government Minister Greg Barker's guest comment:
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Replies

  • stphnsteveystphnstevey Forumite
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    So you still pay interst on 'the loan'?
  • edited 28 January 2013 at 10:37AM
    SnowManSnowMan Forumite
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    edited 28 January 2013 at 10:37AM
    From a quick look it all looks very confusing.

    It appears that you pay the cost of the assessment which may be £100+ but if you don't use the company doing the assessment (which could be a big company like British Gas who we know 'overcharge' for boiler replacement) then you lose the £100+.

    Then you have to repay the loan based on what you are expected to save in utility cost. So if the measures are expected to save you £10 per month on your fuel bills you pay an extra £10 per month through your fuel bills. But then they might charge you 10% interest, and there is no option to repay early without paying all the future 10% interest
    :eek:

    And you can't accept part of the energy saving measures it's either all or nothing. So if the assessor decides the saving is quite small and so the loan is being paid back over a very long period (a period you have no control over) then the company is making all their money out of the high interest with the help of compound interest, at your expense. Seems a bit like a payday loan but worse as there is no early option to repay.
    :eek:

    As I say I've not looked at it very closely so hopefully someone will be able to confirm I'm wrong here. I look forward to the MSE detailed guide.
    I came, I saw, I melted
  • This article in the Guardian makes interesting reading.
  • edited 28 January 2013 at 10:55AM
    MPwannasavemoneyMPwannasavemoney Forumite
    190 posts
    edited 28 January 2013 at 10:55AM
    Well the guardian says it all

    "The government's flagship "green deal" home insulation programme provides no guarantee of saving money for cash-strapped households, and is unlikely to rescue many from fuel poverty, experts warned ahead of its formal launch on Monday."

    I think any rate above 4.5% is too high its a scam to help the energy companies make money out of people who cannot afford to pay upfront.

    When you sell the house what is the buyer going to think when they inherit an obligation to pay high interest on the loan which if paid early might incur a fee.
  • Ken68Ken68 Forumite
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    Sounds like another bank fiddle.
    A few years ago a quote to exterior insulate my house at an energy saving of £275 p.a. would have taken 75 years to pay back.
  • edited 28 January 2013 at 3:05PM
    rogerblackrogerblack Forumite
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    edited 28 January 2013 at 3:05PM
    In some cases, it's a good deal.
    If, for example, you're moving in three years, and have no concern of future property prices, and need expensive work done, perhaps.

    There are however serious issues.
    The work is done by a select set of companies, who will certainly be charging at over market rates, compared to simply calling up a tradesman, and having them do a given improvement.
    Clearly - DIY improvements - which can in many cases be very effective and cheap - are not paid for under the scheme.
    The loan is comparatively expensive - even at 7%, over more than a couple of years, that interest mounts considerably - over 10 years extremely.

    If you can afford to get the work done, and can get a loan at a reasonable rate, or especially if you can add it on to a mortgage - this will almost always be a cheaper solution.

    If the loan provider can repay out of energy savings, so can you!
    And you will not be paying increased rates due to requiring the work is certified.

    Then there are the thorny issues that I've not seen mentioned.
    You have an energy bill of 1K (say), you get work done, your energy usage halves, and you are now paying back 400 pounds a year on your green deal, 500 pounds for energy - saving a total of 100 pounds.

    You lose your job, and can't get another decent one, and can't afford to properly heat the house, and end up spending only 200 pounds on energy as you're only heating one room.
    Do you still pay back 400 pounds a year from your energy bill?
  • I don't know why everyone didn't take the free loft and wall insulation when they had the chance.
  • murphydog999murphydog999 Forumite
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    The more I read about this the more I can't believe someone actually thought this was a good idea! We were all set to do this after we had a surveyor round - on the previous free loft insulation deal that we were out of time for - until we learnt that what he told us was a pack of lies.

    We were told the government had set aside £190 million - he was very precise - the energy companies were going to match that sum, and after your assessment had taken place, you would pay 20% of the cost, the rest would be gov funded. What a fab scheme we thought! The only part that is true is that it is all of the recommendations or nothing. We are in a rural property - so off-gas - in a single skin building, I'm told we are ripe for lots of nearly-free installation, what a load of B*******s!!

    As has already been said, if we sell in a few years time, we sell a property with a built-in loan, I can imagine myself saying 'well at least it's warm'!!

    What an absolutely useless idea, that does nothing to encourage people to improve their living conditions, save money, and help the environment.
  • HappyBunny wrote: »
    I don't know why everyone didn't take the free loft and wall insulation when they had the chance.

    Because my loft is boarded out, over 10cm insulation, and I'm not able to move the stuff up there so installers can get in at it, even if I was to give up the space and say 'lay it on top'.
    Because I have walls not suitable for wall insulation. (other than external)
  • Questions for those who have looked into this.
    Are repayments based on a per-unit levy on energy prices, or a monthly or other fee?

    The 'golden rule' - there will always be savings - how is this calculated?
    Does it assume you are able to heat the house properly, and hence the energy bill will be X, loan cost Y, existing price Z, X+Y<Z - so you can afford loan repayments of Y.
    Or is it more nuanced.
    If it's a fixed repayment per year - what if you only have less than this to pay - does the loan take priority, or the actual supply of electricity and gas?
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