Have you ever heard of the “Green Deal” before? If you haven’t, it is a way for you to finance energy-saving home improvements without having to pay too much out of pocket. The Green Deal works towards financing a loft, cavity or solid wall insulation, double window glazing new combi-boiler, or solar panels.
In order to decide if this is the best option for you, it is best to have a solid understanding of the four steps: assessment, finance, installation, and repayment.
Green Deal vs. small bank loan
You may be wondering what the difference is between the Green Deal and a small bank loan. For one, the repayments you make through the Green Deal should be covered by the amount you will be saving on each energy bill. In implementing energy-saving home improvement measures, you will not be paying as much on a month to month basis. This repayment system is referred to as the ‘Golden Rule’ – you should never pay more on your loan repayments than you are saving through your new and improved energy bill.
However, it is important to note that the Golden Rule is not a guarantee that your repayments and savings will work out this way. There is a good chance that it will, as the guideline is based on energy-saving estimates. So once you have completed all of your repayments, you will really begin to see a savings.
The Green Deal differs from a traditional personal loan because it is attached to your home or building property, rather than you as an individual. One thing to keep in mind is that if you sell your home before you have made all of your repayments, the loan will then transfer to the new owners.
First steps towards getting the Green Deal
The first step you must take if you are interested in the Green Deal is to schedule a visit from an assessor who is accredited with the Green Deal Quality Mark. Green Deal qualifies and interested parties must bear this mark and work in conjunction with a specific code of conduct and set of regulations.
There are a variety of Green Deal providers, including energy companies, outfits that install energy efficient technology, and many others. You will be required to pay out of pocket for the assessment, which will vary in price depending on the company. The assessor will come out to your property and provide you with a quote, which you can then choose accept or reject.
How is the Green Deal different from other schemes?
Until recently, insulation has been available for free or at a low rate through schemes funded through energy bills. Because the Green Deal is so new, there are still many questions surrounding how it will work and the interest rates. The government has made statements that they could be around 7-8%, but that is just an estimate.
The Bottom Line
Whether or not the Green Deal is the right option for you will depend upon your financial and personal situation. Because Green Deal plans may have different interest rates, terms, and conditions, it is imperative for you to read the agreement thoroughly before committing. Additionally, since it is such a new loan, there are still a lot of questions surrounding how it will play out. However, if you and your financial adviser have sat down and gone over your finances and believe it is the right move for you, you could be one of the first to benefit from this deal. It is also essential to keep in mind that this is a long-term financial commitment that is devoted to promoting energy efficient practices.
When will the Green Deal be available?
Accredited assessors have been able to offer assessments since October of 2012, but the official launch was in January of 2013. While the launch date has passed, Green Deal organizers have yet to disclose the details of the finance and loan packages to the public.