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Is the Green Deal a Good Deal?

April 21, 2012

Some energy improvement pay-back times you need to see!

October 2012 marks the start of a new government initiative called the Green Deal, which is designed to make energy saving improvements more affordable to homeowners. The cost of these improvements is spread over a period of time (usually based on the expected life-span of the new appliance) and is paid by whoever is currently occupying the property.

Before you rush in, please take a look at the pay-back times in years for a number of energy improvements you may consider.

If you plan to take advantage of this new scheme, please be careful as I fear the alleged energy saving improvements will be sold to you based on the GOLDEN RULE (e.g. the money saved on the gas/electric bill is greater than the Green Deal repayments) rather than the whole life cost of the installation.

Please note that your predicted energy saving will be based on a set of assumptions within the software. If your family size and consumption of energy doesn’t conform to the assumptions, then the actual energy saving and the money saved will be different from the predicted amount. This could come as a bit of a shock if the savings don’t meet expectations!!

Improvements below zero save carbon and money

Take a look at the coloured graph. All the improvements less than zero £/CO2 save you carbon dioxide and money… a very good thing! However, these figures still don’t take account of carbon dioxide generated in their manufacture and transportation. Since most appliances are manufactured overseas, you can see why the Government aren’t keen on reviving the manufacturing sector!!

Have a look where double glazing is, it’s awful. CWI means cavity wall insulation.

Please also note that because the relatively small repayments are spread over many years, excessively high capital costs can be hidden behind the small regular premiums. Much the same way hire purchase repayments are made to look more affordable if spread over a number of years.

When Green Deal salesman come knocking at your door (which they will) they’ll talk of energy saving and money saving in the same breathe. Please don’t forget that the amount of saving from your energy bill must be off-set by the cost of the installation AND the running and maintenance costs AND the cost of product guarantees which the scheme may require you to purchase.

As a rule of thumb, unless the energy and money saving is significant and immediate, think twice about the procuring the improvement. If the improvement is loft insulation you’re onto a winner, if you want to install solar panels on your roof you’ll probably wish you hadn’t.

As a footnote, Part L of the Building Regulations prohibits alterations to your property that makes your home’s energy performance worse. If for example you install a device that becomes too costly to run or doesn’t deliver the improvements you had hoped, then technically you’ll not be able to remove it! This could make your property harder to sell. This is even more relevant because under the Green Deal the appliance will not legally be yours until you’ve finished the repayments!

Visit the Energy Saving Trust for more information.

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