The Green Deal: Adding Up The Sums Before Signing Up

May 16, 2014

One of the biggest roadblocks to improving a home’s energy efficiency is finding a suitable way to pay for all the work needing to be done. The Green Deal is one lending program intended to help pay for such upgrades. Guest writer Adam Wilmer provides food for thought on the scope of this program.

Green Deal plant and money

Most of us are familiar with the expression that there is no such thing as a free lunch and it is probably a fair way of summarising the approach that you should take towards taking advantage of the Green Deal, which is aimed at helping you fund the cost of energy saving improvements to your home.

There is no question that the Green Deal initiative should be viewed positively concerning what it sets out to achieve and there are certainly benefits for homeowners who are committed to improving the energy efficiency of their property. The Green Deal can therefore benefit homeowners with reduced energy bills as well as potentially adding value to their property at the same time.

Don’t rush in

As with any loan or similar financial undertaking, you should always take the time to consider the terms and conditions that you are signing your agreement to and make sure that the deal is right for you and makes sound financial sense before you finally take the plunge and agree to go ahead.

Using the Green Deal initiative to insulate your property and boost its energy efficiency rating is probably a good idea and worth checking to see if you are eligible for receiving a loan. Also do your sums to see whether you might actually be better off paying for the improvements yourself.

Once you have checked your suitability for financial assistance you should endeavour to learn more about what is involved and try to establish if the projected energy savings that you expect to achieve from your home improvements will justify the cost outlay and loan repayments.

Financial incentive

There are a couple of significant financial incentives that may well be strong enough to justify carrying out energy saving improvements to your property. The first one is the savings that you can make on your energy bills each quarter; it is estimated that having good loft and cavity wall insulation as well as updating your boiler can result in a reduction of nearly £600 per year on your annual energy running costs.

The other factor to consider is the potential uplift in the value of your property as a result of having a more energy efficient home. A recent government report estimated that by insulating your cavity walls, upgrading or installing double glazing, installing loft insulation and putting solar panels on your roof, you could add anywhere between 14 and 38 percent to the value of your property.

Energy efficiency is key

The government report looked at over 300,000 property sales during a six year period and concluded that energy efficiency has become a key factor when it comes to what influences buyers and what helps you to achieve the best sale price for your property.

Using the Green Deal to help carry out home improvements in the form of insulation and draught proofing and looking at ways to generate your own energy through the use of solar panels, is a big plus when it comes to buyers deciding which home to purchase and there is a clear correlation between the energy rating that a property has achieved and the sale value it can fetch.

The purpose of the Green Deal loan is to help you improve the energy efficiency of your property and not to make a quick financial gain by selling once you have carried out the improvements. With that in mind be sure to check the repayment terms and any redemption fee payable, so that you can benefit from the improvements yourself in the immediate future. Later down the line when the time does come to move on you know you’ll have done the right thing in terms of making your property more desirable to buyers.

Getting an assessment

Before applying for a Green Deal loan you will have to have an assessment carried out at your property to confirm what needs doing and to find out which improvements are recommended so you can derive the maximum benefit for your investment.

There is normally a fee to pay for the survey, but without the assessment to work from you will not be able to progress any further with the Green Deal application process. Therefore there is no way around paying upfront somewhere in the region of £120, although you might qualify for help under the ECO scheme.

The Green Deal could be a very smart move for you and help you to gain from lower energy bills and even a better sale price at some point in the future, just make sure you do your sums before you sign on the dotted line.

Adam Wilmer studies domestic energy usage. From improved efficiency to innovative systems through providers, he often writes about the continued effort to use energy smartly.

Image: Adam Wilmer



Glenn Meyers

Writer, documentary producer, and director. Meyers is a contributor to CleanTechnica, and founder of Green Streets MediaTrain, a communications connection and eLearning hub. As an independent producer, he's been involved in the development, production and distribution of television and distance learning programs for both the education industry and corporate sector. He also is an avid gardener and loves sustainable innovation.