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Energy Assessment: Would the Green Deal work if the interest rate on it was dropped?

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  1.  
    • CommentAuthorRobinB
    • CommentTimeJan 27th 2013
     
    Currently set at 6.9% it doesn't seem a good deal for the vast majority of households.

    If it was dropped to say, 3% would it work or does it have other fundamental shortcomings?
    • CommentAuthorDarylP
    • CommentTimeJan 27th 2013
     
    In short, 'No'.

    It has many shortcomings: lack of GD Assessors, upfront costs of Assessments will put many people off even starting the process, companies in 'business' to skim off %s at every stage, does not bode well for a start!:angry:
    •  
      CommentAuthorted
    • CommentTimeJan 27th 2013 edited
     
    The quoted 6.96% is only the base loan rate. Once costs are added on it is higher still, between 7.5% and 9.5% depending on the size of the loan. These 'extras' include a £63 setup fee and a £20 annual admin fee. Add on £100-150 for an assessment as well. Mark Group are offering free assessments for an introductory period.

    See http://www.businessgreen.com/bg/news/2239206/breaking-green-deal-finance-company-confirms-696-per-cent-interest-rate

    And the scary part of the latest GD news is that 20% of the population will not be eligible for a GD loan anyway. It's not clear exactly what those exclusion conditions are yet.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 27th 2013
     
    Really quite amazing how a government department with all the resources they have can screw up what should simple.
    I think they have forgotten what the GD is meant to do, which is reduce domestic energy use and have focused on how it will not cost the consumer any more than they pay today. Then they layer on rules and exclusions, create a false marketplace and have to offer incentives. Really is such a mess.
    • CommentAuthorbillt
    • CommentTimeJan 27th 2013
     
    I thought that the GD was meant to give the appearance that the government was doing something, without the government paying anything. It works fairly well at that. The fact that no one with a brain cell will take it up is not important (to the government).
  6.  
    Posted By: billtI thought that the GD was meant to give the appearance that the government was doing something, without the government paying anything. It works fairly well at that. The fact that no one with a brain cell will take it up is not important (to the government).

    I see you have a clear understanding of the 'greenest government ever' :smile:
    • CommentAuthortony
    • CommentTimeJan 27th 2013
     
    I too think that the short answer to the op is no.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 27th 2013 edited
     
    Posted By: jamesingram'greenest government ever'
    Should that not be the 'greenest parliament ever' as the Green Party MP is not in the government. Has she said much about the GD?

    Bit in today's Sunday Times about the GD and this bit in yesterdays Guardian, say about the same thing:
    http://www.guardian.co.uk/environment/2013/jan/27/green-deal-unlikely-deliver-promises
    • CommentAuthorRobinB
    • CommentTimeJan 27th 2013
     
    Miserable isn't it?
    • CommentAuthorSeret
    • CommentTimeJan 27th 2013
     
    Posted By: SteamyTeaHas she said much about the GD?


    Not sure, but the Green Party itself is quite critical of the GD:

    http://greenparty.org.uk/news/2013/01/16/green-deal-needs-major-rethink/
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 27th 2013
     
    Posted By: RobinBMiserable isn't it?
    It's the English way :bigsmile:

    Posted By: SeretNot sure, but the Green Party itself is quite critical of the GD:
    £3M for 50,000 homes, £60 a home, or £1.5b for the nation. Isn't that about what the Government backed bank was going to need, the one that was going to invest in green things, the one that was going to save us all from the crooks in the existing banks, the same one I have not heard anything about recently. What is Nicola Horlicks up to these days :wink:
  12.  
    I dont understand why the interest rate is fixed for 20+ years. Almost nobody in uk fixes their mortgage that long so why would they want to fix their GD payments. The consequence is the rate is similar to longterm average interest rate, which looks expensive compared to present all time low market rates.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 28th 2013 edited
     
    Posted By: WillInAberdeenThe consequence is the rate is similar to longterm average interest rate, which looks expensive compared to present all time low market rates.
    That is because we have very low interest rates in historic terms. Once inflation starts to kick in again they will rise. In the early 90s if I had said that I think that the Bank rate will drop to 5% you would have all said I was mad, so shall I predict that the Bank rate may well rise to 3% in the next 5 years, that will be a 10 fold increase.
    • CommentAuthormarsaday
    • CommentTimeJan 28th 2013
     
    5% is the historical norm give or take. What about interest rates at 8% and rising in the future. It will happen, just not able to say when.
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 28th 2013
     
    Nothing quite like controlling the GDP through interest rates, much more effective that taxation and a lot quicker.
    Trouble is at the moment we cannot realistically cut them, only raise them, hence the sneaky charges on top of the interest rate (thinking the 20 quid annual charge, or 2 percent on a £1000 per year energy bill).

    How can one shout to the general public that this is not a good deal for energy reduction?
    • CommentAuthorrhamdu
    • CommentTimeJan 29th 2013
     
    It seems pretty iniquitous to me, that lenders are allowed to charge a penalty if you repay early. This will particularly hit those who would like to sell their home unencumbered by Green Deal debt.

    Just another sign that the whole thing has been dreamed up for the benefit of the financial 'services' industry.
    • CommentAuthorTriassic
    • CommentTimeJan 29th 2013
     
    Posted By: tedMark Group are offering free assessments for an introductory period.


    Went past one of their depots yesterday and thay have a lot of vans parked up, suggesting work is slow.

    The house building industry is on its knees and the renovation industry will be next! Don't see many bankers on their knees or on the dole !!
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 29th 2013
     
    Posted By: TriassicDon't see many bankers on their knees or on the dole !!
    I think there are:
    http://www.telegraph.co.uk/finance/jobs/9658595/City-to-cut-13000-jobs-in-2013.html
    • CommentAuthorTriassic
    • CommentTimeJan 29th 2013
     
    Sorry ST I missed that one as I live in the grim north, mind you with HS2 I'll soon be able to get 'into town' in under 2 hours !! Oh the joy of the suburbs !!!
    •  
      CommentAuthorSteamyTea
    • CommentTimeJan 29th 2013 edited
     
    You live nearer the capital than I do, you want grim, go have a wander around Redruth, or Camborne, Penzance is just about closed now. I blame the unemployed Bankers overpaying for their holiday cottages (actually I don't, but that is another story).

    HS2 is going to be a boom for the West Country, shall miss the 'All Stops to Exeter', and the bus service when the line is flooded again. Nearly 200 quid to get a ticket to London from here, and they put us on a bus.
    • CommentAuthorTriassic
    • CommentTimeJan 30th 2013
     
    So according to Owen Daggett, the Sustainability Manager at the Joseph Rowntree Foundation and Joseph Rowntree Housing Trust, the Green Deal won't even help replace his old boiler!

    "For those who take the deal, what will it deliver? The qualifying list of measures currently stands at over 40, but when it comes to what it can deliver for a typical household, options are limited. Take my home as an example. I have insulation in the walls and loft, and double glazing that was installed some 15 years ago. The problem is the creaky boiler that needs replacing, which happens to be the one thing I can’t afford to replace. Surely a case of Green Deal to the rescue? Unfortunately not, as under the ‘golden rule’, the savings from the Green Deal must outweigh the re-payments for the package to qualify. And my boiler doesn’t meet those criteria, meaning that for me and millions in the same situation, the only option is dig deep and pay for it myself. Lower interest rates could help tip the golden rule in favour of my situation, but in its current state the Green Deal fails to launch."

    http://www.jrf.org.uk/blog/2013/01/green-deal-homeowners

    I would have thought efficient heating (after adequate insulation and draftproofing) was a must?
    •  
      CommentAuthorted
    • CommentTimeJan 30th 2013
     
    Boilers can only be financed under the Green Deal over a maximum 12 year term as that is their GD defined lifetime. If the savings over 12 years do not cover the repayments for a replacement boiler then it doesn't meet the Golden Rule and therefore cannot be funded by a GD loan. It may still be possible to part-fund a replacement boiler for the amount that does meet the rule.

    Another hidden gotcha with the Green Deal is once you have signed up for a loan it will restrict which electricity suppliers you can then switch to. Any supplier not supporting the GD will be off-limits. I'm not aware which ones have opted in or out at this stage. I imagine all the big ones are in, but some of the smaller ones may not join.
    • CommentAuthorSaint
    • CommentTimeJan 30th 2013
     
    Posted By: tedBoilers can only be financed under the Green Deal over a maximum 12 year term as that is their GD defined lifetime. If the savings over 12 years do not cover the repayments for a replacement boiler then it doesn't meet the Golden Rule and therefore cannot be funded by a GD loan.
    Unless you are eligible for ECO under the Affordable Warmth Obligation as a low income or vulnerable household which possibly precludes Mr Daggett
    • CommentAuthorDarylP
    • CommentTimeJan 31st 2013
     
    Why can't Owen Daggett pay for a new boiler himself? :neutral:

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