Green Deal loft insulation scheme approved
The Green Deal is a secondary legislation that was set up in 2010 as part of the Energy Act 2011 which the Government describes as a ‘flagship piece of legislation.’ It is designed to deliver energy efficiency to homes across the country with projects such as the loft insulation scheme that has recently been approved.
The lost insulation scheme is designed to address the problem of draughty homes across the UK. The Government is offering a maximum £10,000 loan to homeowners over a 25 year period, with a 7.5% interest rate attached. This will then enable them to buy and install loft insulation which is designed to save them money on their energy bills.
Unfortunately the scheme has been deemed by critics as costly because the borrowing of £10,000 over a 25 year period would mean you have to repay £22,000. This makes the energy efficiency improvements expensive, especially as the scheme is ultimately designed to save the homeowner money.
However, the Department of Energy and Climate Change dismissed the criticism and stated that people can borrow smaller loans over a shorter period of time therefore, paying less interest.
The loan will be attached to the property, not the homeowner so if the property is sold, the debt is passed onto the next owner and it then becomes their duty to repay the loan. This is ideal for homeowners who may have a bad credit rating as they loan is linked to the property and not the individual.
The Government is hoping to provide £300 million from the Green Investment Bank to finance the scheme and the companies involved including British Gas and the B&Q DIY chain. There are currently 16 companies in total who have signed up to the Green Deal since October 2011
It is expected that the cost of energy is on the rise and the Green Deal can help homeowners save money on their energy bills before this rise occurs.
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