Our bank balances would be far better off if we were to make our homes warmer and cheaper to run. The Government, bless them, have not only recognised this, but they are making sure people don’t have to spend large amounts of money upfront by introducing the Green Deal energy saving scheme.
The Green Deal energy saving scheme allows home owners to pay for chosen home improvements over time through their electricity bill. The Governments aim is that the cost of your chosen energy measures will be covered by the savings you’ll make as a result of having the work carried out (though this is not guaranteed), there is Government cashback on offer.
Around 45 different energy saving home improvements are currently eligible for the Green Deal. Double and triple glazing, a new boiler, floor insulation, cavity wall insulation, solid wall insulation, draught-proofing, new/replacement storage heaters, a new front door, and loft/hot water tank insulation. The Department of energy & Climate Change (DECC) have suggested wind turbines and solar panels could also be eligible.
DECC gives the example of someone living in a large detached property off the gas grid, who has solid wall insulation (external, type 2) and loft insulation installed under the Green Deal.
It estimates the total cost of the work at £10,193, including all the administration, assessment and other costs that it reckons would be rolled in.
DECC puts the estimated saving for that household as a result of having this work done at £1,388 a year. However, the Green Deal plan repayment would be just £1,000 a year, assuming an interest rate of 7.5% and a 20-year repayment period.
So the annual net saving would be £388 in year one, and the department says it would expect this to grow over time.
Furthermore, the solid wall insulation would be eligible for a subsidy through the Energy Company Obligation (ECO) programme, which would reduce the payments further and increase the net savings made by the household.
Some might question these figures and assumptions, however. For starters, £10,193 for a package including external solid wall insulation and loft insulation for a large house sounds very cheap when one considers that the Energy Saving Trust website puts the cost of external solid wall insulation alone at between £9,400 and £13,000.
The Energy Saving Trust estimates that the annual saving a household would enjoy as a result of this measure is around £475 a year – way below the hefty £1,388 figure quoted by the DECC. An annual saving of that level makes you wonder just how high their bills were before.
For more information regarding the Green Deal or if you would like to speak with one of our advisors please call us on 01484 818884.