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'Energy efficiency' Green Deal launched by government 'Energy efficiency' Green Deal launched by government
(about 1 hour later)
Householders are to be offered long-term loans to help make their homes more energy efficient and cut bills under a new government scheme.Householders are to be offered long-term loans to help make their homes more energy efficient and cut bills under a new government scheme.
Ministers say the Green Deal, which launches on Monday, will help thousands "stay warm for less". Ministers said the Green Deal, which started on Monday, will help thousands "stay warm for less".
Under the scheme, households can use cheap loans to spend on energy-saving improvements, such as insulation and new boilers, with no upfront cost.Under the scheme, households can use cheap loans to spend on energy-saving improvements, such as insulation and new boilers, with no upfront cost.
Campaigners said the project would "not stop fuel poverty rocketing".Campaigners said the project would "not stop fuel poverty rocketing".
The Department of Energy and Climate Change (DECC), which launched the flagship scheme, said it believed hundreds more households than expected had already signed up for assessments to join the project. It said official figures were being collated. How it works
Earlier reports had indicated just five assessments had been carried out ahead of the launch. The move to insulate the UK's aged housing stock is designed to save carbon emissions, keep people warm, and make energy affordable.
Deputy Prime Minister Nick Clegg said: "The Green Deal will help thousands of homes stay warm for less. Those people will benefit from energy saving improvements - and their energy bills will fall. Homeowners will first be visited by an assessor, who will ask some basic questions about their energy usage.
"The UK green sector is a success story. It is the sixth largest in the world and has a crucial part to play in building a strong economy." Approved Green Deal installers, such as energy companies or DIY chains, will then advise on potential improvements, such as double-glazing, insulation or new heating systems.
'Cosier' homes Consumers will pay for the improvements by taking out a loan with the Green Deal Finance Company, a non-profit making organisation backed by the government.
He added: "The Green Deal will support thousands of jobs, not just over the next few years, but in the long-term." Such loans will be paid back through electricity bills for periods of up to 25 years.
Energy and Climate Change Secretary Edward Davey also praised the "great deal", saying: "Improve the look and feel of your home, make it cosier and at the same time save energy - what's not to like?" There is no guarantee that the eventual savings made by consumers will match the cost of the loans they take out to make the improvements.
The move to insulate the UK's aged housing stock is designed to save carbon emissions, keep people warm, and make energy affordable, the government said. "However, there's a good chance that you will make savings," said Paul Reeve, of the Electrical Contractors' Association.
Anyone joining the scheme would first have their home reviewed by an independent assessor, advising on possible upgrades, costs and energy saving timescales. Consumers taking out Green Deal loans will have to repay them at a maximum rate of 6.92%, according to the Department of Energy and Climate Change.
Green Deal providers would then calculate quotes for the proposed work - with households free to get multiple quotes - before carrying out the changes. Compared to a standard home loan rate, that is relatively high.
Under the deal, improvements are installed at no initial cost. But a spokesman for the department defended the rate, saying that consumers will expect to save money on their energy bills.
Instead, charges are covered with cheap loans via the not-for-profit Green Deal Finance Company, and recouped gradually over up to 25 years through customers' electricity bills. The amount that anyone can borrow will be capped at £10,000.
But campaigners have warned the scheme does not go far enough. Moving on
Mr Reeve said it was possible, but unlikely, that consumers could end up out of pocket.
"Many of us believe that energy prices will continue to rise over the coming years. If that's true, people who've taken on the Green Deal will generally feel a lot better off," he explained.
Should householders sell their home, the loan will need to be taken on by any new homeowner.
Mark Bayley, the chief executive of the newly created Green Deal Finance Company, said: "What makes it work is that the experience of energy companies is that people's default rate is very much lower than the experience in consumer credit and that's how we're able to construct very long term, low cost financing."
"And as people move house the loans they take out under Green Deal plan stay behind with their electricity meter."
More needed?
Deputy Prime Minister Nick Clegg said: "The Green Deal will help thousands of homes stay warm for less. Those people will benefit from energy saving improvements - and their energy bills will fall."
"The Green Deal will support thousands of jobs, not just over the next few years, but in the long-term," he added.
However, campaigners have warned that the new scheme does not go far enough.
Ed Matthews, head of fuel poverty campaign group Energy Bill Revolution, said: "The Green Deal and Energy Company Obligation will not stop fuel poverty rocketing in the face of high gas prices."Ed Matthews, head of fuel poverty campaign group Energy Bill Revolution, said: "The Green Deal and Energy Company Obligation will not stop fuel poverty rocketing in the face of high gas prices."
"We call on the prime minister to use money from the carbon tax to super-insulate this country's homes."We call on the prime minister to use money from the carbon tax to super-insulate this country's homes.
"This will provide households with five times more subsidy to insulate their homes and not add a penny more to energy bills.""This will provide households with five times more subsidy to insulate their homes and not add a penny more to energy bills."
"It is enough to eliminate fuel poverty and in time cut bills for everyone. It is the just and fair solution." The Department of Energy and Climate Change (DECC), which launched the flagship scheme, said it believed hundreds more households than expected had already signed up for assessments to join the project.
It said official figures were being collated.
Earlier reports had indicated just five assessments had been carried out ahead of the launch.