Prior to its launch in Jan 28th 2013, Climate Change minister Greg Barker described the Green Deal as “the biggest home improvement programme since the Second World War…” Unfortunately last week the Parliamentary Select Committee on Energy and Climate Change criticised ministers for having no clear targets for the scheme. It is easy to understand why – in the first month just 1,803 Green Deal assessments were requested.
A May 2011 report “Financing the Green Deal” predicted minimal take-up of the Green Deal unless loan rates are subsidised down to 2% (they are currently near 8%). Competition amongst the 50 lenders of The Green Deal Finance Company shows little sign of improving rates by natural means.
The Green Deal scheme is intended to increase the uptake of energy efficiency measures, particularly in households who would otherwise struggle to raise the capital sum outright. In order to discover if a property is eligible, an assessment is required. A recent Guardian survey discovered these assessments cost between £95 and £150 – a significant investment for lower income households, particularly with no guarantee of recouping the outlay. Moreover, an April 2013 survey by Which magazine discovered that 46% of prospective house purchasers would insist that any outstanding Green Deal loan be paid off before proceeding with the purchase. This could prove a fatal flaw – property owners must purchase an assessment without knowing whether it will be beneficial. If it is not, they have wasted the assessment fee. If it is, it may suggest a long term loan which will hamper any future sale of the property.