The Governments 'Green Deal'

[=XDC=FluphyBunny]

Heard this discussed a few times recently and just had a very quick look at it. Its the Green Deal offered by the government for 'energy saving improvements on your home'.

So its basically a loan, repaid through your gas/electric on the basis of an estimate. The estimate is based on an assessor who will charge you £120 for their efforts.

Why would you choose this over a normal loan, or house owners why would you not just borrow on your mortgage and overpay over a shorter period of time?

 

[Danthus]

I listened to a debate on Radio 4 yesterday, the Government minister who took part thought that spending £10,000 on home improvements in order to save in the region of £250 a year was a good idea.

 

[Castiel]

Its a stupid idea...you can get the majority of those improvements on far better terms privately...why would you pay more to the Government.

 

[Danthus]

Its a stupid idea...you can get the majority of those improvements on far better terms privately...why would you pay more to the Government.

But you will save on your energy bills.

 

[Jono8]

I guess it is like the whole "Buy this brand new super economical car that does mega mpgzz for only £12k + finance and save yourself £500 a year on fuel and car tax!"

 

[Cosimo]

But you will might save on your energy bills.

Corrected.

 

[Hank_Marvin]

I need a new boiler which I can get done about £1500 so if I can get a good loan for that over a couple of years it sounds ok.

I enquired last weekend just to see but not heard anything yet.

 

[jsmoke]

Out of interest(no pun) if you payed back your heat savings of £250 per/year on a £10,000 loan at 6.5%, how many years would you be paying back and what's final amount etc. Anyone got a formula?

EDIT: So it's obviously not compound interest as the interest would be more per year that the savings.

 

[apeksdiver]

I really can't see people going for this one, the interest rate is to high over too long a term.

 

[Dj_Jestar]

This'll be for those that can't get a loan anywhere else. They'll default on this loan too, probably. Then the govt will probably do nothing about it, but at least they will have a record of those who don't pay off their loans.

 

[Hank_Marvin]

Do you have to have it over 10 years?

 

[St0rmer66]

Wow, the government really have messed up the release of the green deal if this is what people think it is.

A green deal assessor has to come to your house and do a survey, it will be far more in depth than the old style "HIP" surveys and apparently can take 3-4 hours in some cases.

The results of the survey need to show that the savings made will either be equal or greater than the monthly payments for the loan. The loan is over 12 years and goes onto the electricity bill of the house, even if you move the extra cost stays with the property.

To make the kinds of savings needed, the boiler will have to be very old and inefficient (open flued or balanced flue with a permanent pilot at the least). It also includes things like insulation (loft, cavity wall) and double glazed windows.

The majority of people will not have a chance in hell of getting the grant simply because the savings needed are so high. Apparently so far only ~20% of applicants are being successful.

 

[jsmoke]

Yep simple calculation 6.5% of £10,000 over 12 years £14,288 or £100 per month. So hence you would need to save £1200+ per year, are you living in an igloo?

 

[St0rmer66]

Yep simple calculation 6.5% of £10,000 over 12 years £14,288 or £100 per month. So hence you would need to save £1200+ per year, are you living in an igloo?

Correct, but also remember it is up to £10,000. It could be, for example, £3000 over 12 years which would need much lower savings per month.

 

[Danthus]

And lets not forget the assessor may work for a company that flogs the boilers, insulation and double glazing.

Would could possibly go wrong?

 

[Jonny69]

Yeah it's a bit of a crap deal and I take it it's replacing the free loft and cavity wall insulation that you could get up to December 2012 (the economics of that was that it worked out cheaper for the government to pay for homes to be insulated than it was for them to invest in infrastructure to make power generation more efficient, plus it ensured it actually got done). Either way, it means many people probably now won't be changing a boiler or insulating at all, because it will simply never pay back for them while they are in the property.

So well done Tories, well thought out environmental strategy there

 

[Danthus]

So well done Tories, well thought out environmental strategy there

Ridiculous targets for cutting CO2 emissions are pushing up the cost of energy.

 

[nath247]

Anything with the word "Government" in usually involves screwing people over.

 

[isonomicjedi]

I thought the governments "Green Deal" was that the majority of the population are green with envy at the millionaire coalition cabinet?

 

[Deleted member 66701]

I wonder how hard a house will be to sell with a "green deal" loan hanging around it's neck?