January 13 2012

The United Kingdom’s ‘Green Deal’ Initiative: Will it Be Any Good?

The United Kingdom government recently launched a consultation on their flagship energy efficiency initiative the “Green Deal” which starts in October 2012.  The scheme aims to refurbish 14 million draughty houses by offering homeowner loans of up to £10,000 to install insulation and energy saving measures, which will be paid off over 25 years by small increases to their energy bills. The government hopes this will help people out of fuel poverty and create jobs.  The “golden rule” of the Green Deal is that loan repayments must not exceed the savings made on energy bills.

The Green Deal differs from existing lending because the repayments are fixed to the property, so when a property is sold, they move to the new bill-payer.  The scheme will be part paid for by energy companies contributing £1.3bn a year, and the government estimates that by the end of the decade £14bn of private sector funding will be invested.  The government hopes that the green deal, along with other climate change policies, will result in energy bills being 7% lower by 2020.

A recent report by the Sustainable Building Association noted there has been little mention of energy monitoring so far, but it’s important to ensure that saving calculations at inception are proven to be accurate, and therefore do not break the “golden rule.” They are concerned about how local businesses fit into the process because many homeowners want local trusted tradesmen refurbishing their homes.  The green deal is essentially a financial product, so how will cost-effectiveness be assessed?

One building will have to be given a green makeover each minute from now until 2050 if the UK is to meet its emissions targets according to the Energy Saving Trust. Given that insulation and energy saving measures have already been subsidised, how will in effect a 25 year debt be any more attractive to homeowners?  In particular, a significant number of social landlords have already upgraded their housing stock using previous initiatives – what does the Green Deal offer them?

Would this initiative persuade you to refurbish your home?

Credits: Images linked to sources.

Laura Paterson

Laura Paterson is a graduate of the Mackintosh School of Architecture in Glasgow and Edinburgh College of Art. She holds a B.Arch in Architectural Studies and a PG Diploma in Architecture and is currently studying for a M.Sc Architecture: Advanced Environmental and Energy Studies with the Centre for Alternative Technology, Wales. A qualified United Kingdom architect, Laura was born and still lives in Edinburgh, Scotland. Edinburgh, with its a rich source of historic buildings was what inspired her to study Architecture. With experience in refurbishing Victorian houses, Laura has a particular interest in sustainable, low carbon refurbishment of historic buildings and passive approaches to building design.

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This entry was posted on Friday, January 13th, 2012 at 7:43 pm and is filed under Community/Economic Development, Energy, Environment, Environmental Design, Government/Politics, Housing, Social/Demographics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


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