Forget the Politics: Why We Should Welcome the Green Deal
In amongst the buzz surrounding the Green Deal, set to launch on 1st October, the crux of the initiative seems to be getting lost.
4th September 2012 | Peter Rolton: Chairman, Rolton Group
Comment boards are alive with activity on the subject, as accusations are voiced that it will simply make the poor poorer, and will sell loans that consumers can’t afford to repay. This sort of knee jerk reaction fails to recognise that the Green Deal has been put into place to combat precisely these eventualities.
It is not hard to understand that boosting energy efficiency will not be rated highly on many people’s list of things to do with spare income, nor will it be often considered a viable option for the millions of homeowners who do not have change in their pockets at the end of the month. What the Green Deal does is offer an equal opportunity for everyone to improve the energy efficiency of their home without burdening themselves with the associated long term financial commitments. The loans, worth up to £10,000, are fixed not against occupiers but against the buildings concerned, and as the average move cycle in the UK is shorter than the payback of these technologies, this creates a huge new incentive for people who would otherwise refrain from making such a sizeable commitment. Instead of being the subject of criticism, this information should mute numerous concerns.
First, where previously a house move would result in financial loss for individuals whose energy saving measures had not yet paid for themselves, utilising the Green Deal will mean that when a customer relocates, they will leave any outstanding sum to the next owner, who will pick up both the energy and financial savings and continue to repay the loan within their bills thereafter.
Second, the initiative addresses the most intimidating aspect of energy saving technology: its high upfront cost, which prevents many customers from considering investment. Though the loans last for 25 years, the Green Deal promises that the cost of repayments within future energy bills will always be nullified by the savings made as a result of implementing the technology, and consumers are assured they will see their energy expenses either remain the same or even decrease due to the improvements in efficiency.
Third, the scheme does not act as conventional debt; it does not count against a person’s credit rating and is therefore a much more attractive prospect than taking out a traditional loan.
This should be enough to assuage fears about piling debts onto those who cannot afford to pay for them; homeowners will not experience a hike in personal expenses as a result, and if they decide to move house they will not then be paying for someone else to enjoy cheaper energy costs as was formerly a potential outcome.
Having dealt with the problems of high initial costs and long term commitment to remaining in a particular home, the Green Deal seems to be an obvious choice for those who want to make energy savings without burdening themselves with long standing financial obligation. By not paying attention to these fundamental details, many risk missing out on the opportunity to protect not only their surrounding environment but also their future energy costs.
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