Rising Fuel Prices - and the Green Deal

The Green Deal has not been well received by many of those knowledgeable in this field.

The interest rate on the Green Deal loans will be around 7%, there will also e the cost of the initial survey and other cost and penalty payments and for some people the Green Deal could cost them more than they save. The loans will, of course, be subject to the usual credit checks and this and the costs may exclude many poorer and pensioner households, the people most likely to be in fuel poverty and most likely to benefit from it The figures for how much will be saved by putting in the measures recommended by the deal are only estimates. There is no guarantee that the savings will be there and no comeback if the forecast savings do not materialise.

It has been suggested that many people would be better off arranging finance elsewhere as not only will the loan be cheaper but Green Deal loans are attached to the house not the owner and this could make selling the house more difficult. Buyers may also want resurveys to check whether they will get the savings that the Green Deal promises. Different family and living circumstances could make it less effective, with smaller savings that do not cover the loan payments. If the owner decides to pay off the GD loan to ensure a sale goes through they will be it by an early repayment penalty.

The householder can only use companies approved as installers under this deal. These are mainly big companies who can provide a comprehensive service. However it may be that your local heating company can supply and fit a new boiler much more cheaply than the GD approved installer. Similarly for insulation or new windows.

I am all for some scheme that encourages people to make their houses more energy efficient and provides payment facilities that make that possible. But the GD is not it. The GD is another scheme like capping care costs for the elderly at £75,000, that could lead to a scandal in future years when householders, burdened by a GD loan that is not covered by energy savings watch arrears and penalty costs mounting and end up having to sell or remortage their houses to pay their debts under the scheme

Gosh flicketyb - I am not great fan of Green Deal because it is so complicated but it is not an evil plot!
You can only have a GD loan if your total energy bills, including the repayments, are no more than your current bills. The only way you can lose out is if fuel prices fall, or the energy use of the house drops significantly. If fuel prices rise and inflation continues, it will become an ever smaller part of the energy bill.
It is hedged around with a veritable forest of consumer protection. Hence the "only use approved installers".
I agree that there may be cheaper ways of financing a loan - e.g. extending a mortgage - but one advantage of the GD is that it will pass to another owner if you sell. ALso if all you want is loft insulation it is far too much hassle.
If anyone is looking into it, now is a good time because of the cash back - which may make the deal cheaper than a local supplier.
When you sell a house you have to get an EPC anyway.
An advantage of having a GD assessment is that the assessor is obliged to tell you if there is ECO grant funding in your area and the report is portable. Should be able to get the assessment free - and it will give really useful advice on the cost effective things you can do - whether or not you want to finance them with GD.

But Jess, one of the points I made are that the energy savings are only estimates, not guaranteed so if the energy savings estimated are much more than those that actually arise the homeowner is lumbered with an expensive deal that is not delivering the promised goods and this could lead to either to an immensely extended loan or arrears.

The problemis that everything about the GD is so gold-plated and expensive that it will exclude most of the poorer households who most need help and who are most likely to live in properties where lofts are still not fully insulated and cavity walls without insulation. Many of these were helped by the Warm Front Scheme, which provided this for free. Now with the introduction of the GD this scheme has been closed and the Government itself estimated that this would lead to a fall of between 70% and 80% in the number of properties receiving these most basic of insulation measures. Other people would be better off getting a loan elsewhere and using their local tradesman to do the work. The debt burden will be less onerous and it will not reduce the saleability of their house

"Estimates" are based on two things - a very detailed and sophisticated energy rating of the property which can show what could be done. The other part is based on occupancy and use. All goes through tried and tested software of a standard quality.
There is an initial guarantee that your bills will be no higher even when they include the loan repayments.

Do you think energy prices are going to be steady in future? It is clear that they are not and that people need to start taking action now. As you are aware there are still a lot of under insulated homes with inefficient boilers.
Poorer households may get ECO funding - but it depends where they are in the country.
No point really yearning for Warm Front - its gone and it aint coming back. My son worked on it and he used to complain that even when insulation was free people were suspicious and unwilling to do anything.

No, I worked in the energy industry and still have an involvement and I understand only too well the future, and current, energy situation. I am well aware that bills are going to rise. I am all in support, and have said so for a long time, for a scheme that, as far as raising the energy efficiency of houses, the Green Deal does, but the financing of the scheme is not satisfactory,

When mortgage rates are around 5% or less the Green Deal loans will cost 7%. There is a list of approved contractors, all of them large because they are expected to offer everything, boilers, insulation including dry lining walls, heat pumps etc etc. Several years ago the government offered a grant to homeowners replacing boilers that were less than 60% efficient. DS applied for this as he had just bought a house with a very old boiler. All he had to do was get 3 quotes for the work, submit these with his form and choose the cheapest, which was the local CH tradesman that he had been using for many years in his previous home. Once the work was done and invoice submitted the grant was paid. As the house surveys are paid by the householder I can see no reason why they should not commission the work included in the Green Deal in a similar manner.

I have some experience of the Warm Front from my work for Age Concern a few years ago. This was in the hands of one national firm and they were inefficient dilatory and impossible to contact. In one case I had to contact my client's MP in order to get the Warm Front contractor to do the work they had agreed to do.

However, the biggest failing of the Green Deal is that it completely fails to help the households most likely to suffer from fuel poverty who are often the ones in houses most in need of the most basic insulation and where the payback is fastest but the initial investment least.

Ah yes I know which firm you mean flicketyb - notable for entering an employer of the year award. But of course the generous Ts and Cs only applied to the original small group of employees and managers and did not extend to any new or TUPEd employees.
Just had a conversation over the diner table about the cash back. This can be half of what you pay for ee improvments - boilers, insulation etc and
you dont have to take out Green Deal finance . What you have to do is get a GD report and then a GD provider can put you in touch with the installer, you get all the extra consumer protection and guarantees. If you can get the report free this is almost certainly a really good deal but will last only as long as the pot of money allocated by govt.
I would encourage anyone who is worried to get a (free) GD advice report and read it carefully

https://gdcashback.decc.gov.uk/Home/Faq

ECO is aimed at fuel poverty. There is a lot of money going to be spent
Again they have gone for something rather complicated:

www.ofgem.gov.uk/Sustainability/Environment/ECO/Pages/index.aspx

Sorrry Jess, your first para went right over my head. I have no idea what you are talking about, either the company or the rest. I worked for a number of companies small and large across the energy industry, as did DH and I still have an involvement with a local energy generator through a local charity as a member of an environmental monitoring committee. .

The company that were running the nation wide Warm Front scheme, that you referred to.

The queen is obviously struggling with her fuel bills. But then aristocrats are known for living in the least energy efficient of properties and being hardened to the rigours of living in draughty barns:

i.telegraph.co.uk/multimedia/archive/02488/queen-electric-fir_2488920b.jpg

Don't suppose she is eligible for ECO funding though.
I find it interesting that no one else has joined this thread, don't you flicketyb. I would have thought GN members would be concerned about rising fuel bills - but it perhaps underlines the problems with communicating about GD and ECO - the government(s) never want to spend money on communicating about it an insist on "leaving it to the industry" . Which at the moment translates into the B Gas boiler ads.
jeni did you ever get a new boiler?

Right, got it, I only knew that they were inefficient and kept getting their contract renewed.

I have been accused, by members of my family of being obsessed by insulation but heat is money and if you waste it you cannot spend it on other things. When we first bought a house in 1968, one of the first things DH did was double the insulation in the roof and we also put in some double glazing and we have improved the heat retention capacity of every house we have owned since.

However over 15 years ago we bought a 550 year old listed building that did not have a shred of insulation in the whole property. Bought for renovation we immediately put 6 inches of rockwool in the roof. and then got on with the other renovation work. Then 12 years ago I set out to systematically make an effort to halve our fuel consumption over 10 years by incrementally making the property more heat efficient. We have done it bit by bit as we could afford it, longlife and now LED bulbs, condensing boilers, increasing roof insulation, thickness and extent, dry lining some rooms, a wood burning stove and some internal double glazing, as the house is listed we cannot replace the windows - and it has worked. Our gas consumption fell below 50% of the 2000 level in 2011 and electricity is down to just under 60%. We have further work to do.

It is also household discipline, turning lights off, TRVs on radiators, lined curtains that are drawn as soon as it is dark. But our fuel bills are now around the national average even though are house is much bigger and older than average and I estimate this is saving us about £1,200 a year, a not insignificant amount

Why other people on Gransnet are not interested in this subject I do not know. Most of us are probably over pensionable age and many are clearly from their posts managing on tight incomes. Many energy savings come from simple measures and good housekeeping and as you say there is still some help for poorer households.

I'm interested Flickety - I've taken advantage of free loft insulation to more than double the depth I previously had and it has made my house much warmer. Being of solid brick construction, my house has no cavities to insulate but in my two previous homes, I was impressed with the reduction in the gas bills when I had the insulation done. I do have a condensing boiler and theromostatic valves on the radiators. All windows and doors draughtproof and double glazed. Can't think what more I can do!

I understand that any GD loan is a charge against the property and any prospective buyer could have difficulties when arranging a mortgage. Worth checking out if you intend to sell.

It is a charge against the property and it will probably take a while for conveyancers etc to get use to this, as they got used to EPCs.
The only way this charge can ever be repaid though is via the electricity bill.
The DECC report this week was trying to say that if everyone takes advantage of GD and/or the new ECO grant funding then our energy bills will rise less on average than they would have if they had not introduced GD and ECO.
Earth shattering, as reports go, I'd say.