It has now been 12 months since the government’s ‘soft’ launch of their flagship energy efficiency programme ‘the Green Deal’ (the scheme was officially launched in January of this year), but as we enter the final months of 2013 how have things shaped up so far?
A Disappointing Uptake
Despite the coalition government’s aim of signing up 14 million homes for energy efficiency measures by 2020 via the Green Deal, a mere 961 households have taken up financing options – just 1.35% of the 71,000 Green Deal assessments that have taken place.
This has amounted to just £3.4 million of the initial £244 million in funding available being allocated – but why the reluctance from homeowners?
Possible Reasons for Lack of Interest
Critics of the Green Deal have put forward a number of possible reasons for the slower than expected uptake of financing:
1. The process is too complex.
The chief executive of the Green Deal Finance Company admitted in a recent interview that the complexity of the scheme may be putting people off signing up.
To secure financing requires a number of home visits and multiple forms, while there have also been delays in credit checks of “around three weeks”.
2. For all of the complexity, there is no immediate substantial financial benefit.
The ‘Golden Rule’ that is intrinsic within the Green Deal ensures that homeowners will never pay more on the loan than they save on their energy bills, but the fact that the majority of the savings will be made in the future once the loan has been paid is perhaps not enough of an incentive to take it up in the first place.
3. People are wary of taking on new debt.
Although the Green Deal’s interest rate of 8% is favourable when compared with most personal and credit card loans, with many households still feeling the squeeze on their finances it could be that there simply isn’t the appetite for taking on a debt totalling thousands of pounds – no matter how favourable the terms may be.
Here at SolarTech we are specialist installers of solar panels as well as a number of other energy efficiency measures. To find out more give us a call on 0845 838 2477.