'Green Deal' won't work, experts warn

Flagship scheme ‘not guaranteed’ to save consumers money

The government’s ‘Green Deal’ home insulation project that launched today has faced criticism from experts who believe the scheme won’t achieve its goal of getting people out of fuel poverty.

Despite reassurance from government officials that the savings that will come with lower energy usage will outweigh the cost of the ‘green’ loans needed to install the energy-saving features, many experts believe that factors such as the interest rate of the loans (set at just under 7%), along with the cost of initial assessments of the property, set-up fees and operating charges, will put people off investing in the scheme. There are also worries that potential clients will be put off by the fact that the loan repayments are left with the house, meaning that someone moving into a property that has had energy-saving work done to it will have to take over the loan repayments.

The government's energy-saving scheme has been heavily criticised by experts

(Image source - www.bbacerts.co.uk)

Alan Milstein, chairman of the Residential Property Surveyors Association, said ‘For many consumers, taking on a green deal loan may not be the most cost-effective mechanism to fund any green improvements to their property. With early repayment penalties and the uncertainty surrounding how having a green deal loan attached to your property will impact on its future saleability, for many homeowners it may be advisable to look at alternative ways to fund energy efficiency measures’.

This news has put a dampener on the launch of the ‘Green Deal’, although according to a poll published last week, over 80% of people had never heard of the scheme.