Friday, 28 November 2014

Government offers £125m of green deal cashback

Residential property owners including social landlords are to be offered £125 million of ‘cashback’ payments as an incentive to take up the government’s green deal scheme.

From 28 January next year households having work done through the flagship energy efficiency initiative will be able to apply for cash payments based on the amount and type of work they are having done.

To qualify they will need to have a green deal assessment carried out, and then get some of the recommended work done through a registered green deal provider

Under the green deal households will be able to get work done to their homes without paying upfront. The cost of the work will be met by a green deal provider, and the money will then be paid back using the fuel bill savings. Repayments with interest cannot exceed the fuel bill savings.

Homeowners and landlords will qualify for the cashback payments as long as they are making the repayments, and the cashback cannot be more than 50 per cent of the cost that will be met by the property owner. Any green deal work that is funded entirely through the £1.3 billion a year energy company obligation will not be eligible for cashback.

The Department of Energy and Climate Change has published the cashback rates for a range of different measures that can be installed through the green deal. These are valid for the first £40 million of the fund. Once this is spent, rates may be lowered for the next round of funding.

Energy secretary Edward Davey said: ‘This cashback offer will help get the green deal off to a flying start. It really is a great offer – the more work households have done, the more energy they stand to save and the more cash they receive.’

The department has also announced a separate £40 million fund to improve energy efficiency and reduce fuel poverty.

Councils in England are being invited to bid for £25 million to spend on schemes to combat fuel poverty by improving energy efficiency, and for £10 million to schemes to ‘pioneer’ the green deal.

A further £5 million is available for councils and third sector organisations who want to set up collective switching schemes that encourage consumers to group together to get better energy prices from suppliers.

Readers' comments (4)

  • Gavin Rider

    That's an interesting idea - the consumer pays money to save energy - he then has to pay what he saves on energy to the provider of the energy saving system, to pay for its installation.

    "the cash back cannot be more than 50% of the cost that will be met by the property owner"

    ??? So this means that the property owner must pay the other 50% for the energy saving improvements up front himself.

    That doesn't sound like much of an incentive to me, but perhaps I have not understood it correctly?

    Unsuitable or offensive? Report this comment

  • No Gavin. They don't pay upfront. They have a loan effectively with a the green deal provider after the green deal assessor has assessed their house. They pay it back over the payback period but the savings must be more than the payments. The gov't are offering cashback as an inducement.
    A much better inducement would be to have a simple system that everyone understands and SOME retailers felt they could sign up to. Unfortunately we don't have that so we are likely to have a HUGE flop.

    Unsuitable or offensive? Report this comment

  • The 'cashback' scheme sounds more akin to encouraging someone to max out their credit card on the basis of money now, pay back later and don't worry about the APR in the mean time! What a suprise this government cannot think of any other way of operating when it comes to money.

    How about simply investing in energy conservation and allowing those who invest to share in the benefit instead. For instance, decent homes improvements have been primed by the taxpayer but are being paid for via rents, meanwhile the tenant gains the benefit of the extra insulation etc. That seems faired than forcing the tenant to take out a loan, still pay for the work and the loan, and only when it is paid off start to feel the benefit (some 20+ years later if they are still alive then!)

    I agree with Gavin on this - they call it an incentive! Possibly from where they are sitting, but they are trying to foce it upon those who can neither afford nor wish to be in such debt.

    Unsuitable or offensive? Report this comment

  • Gavin Rider

    Butti - I still don't understand it. It sounds like the energy equivalent of a perpetual motion machine.

    How do you calculate what you are saving on your energy bill if you are not using the energy, so you don't have a "before" figure available to calculate how much of it you are saving by having the energy-saving gizmos installed?

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

sign in register

Related

Articles

IH Subscription