Green Deal: Government launches home improvement fund to boost flagging scheme

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Payments of thousands of pounds will be available to UK householders who install energy-saving measures such as insulation and new boilers from June, in a move designed to breathe new life into the Government's flagship energy efficiency schemes say greenwisebusiness.co.uk

The Green Deal, which launched in January 2013, was hailed by Ministers as"transformational" and the "biggest home improvement programme since the second world war". But the scheme was dogged by administrative problems and even Energy Secretary, Ed Davey, conceded earlier this year that the financing that had been at the heart of the initiative was 'disappointing.'

Ministers will announce a bold new package of measures on Thursday, known as the Green Deal Home Improvement Fund, in a bid to revive the scheme.

A £500 payment will be offered for anyone who installs energy efficiency measures within 12 months of moving into a property. They will also get £1,000 for fitting any combination of two measures from a list of twelve improvements, which include installing double glazing, cavity wall insulation, a new boiler, replacement doors and flat roof insulation.

Householders with older homes that have solid walls who undertake the much more expensive process of having solid wall insulation will be able to claim 75 per cent of the cost, up to a maximum of £6,000, from the Government.

Davey told the Guardian: "I think it’s much more generous [than before]. It’s also much simpler. We did a lot of research on what consumers would react to – to make their homes warmer and cheaper to run. This list approach, 'pick two from a list and get £1,000', research showed people liked that. We’ve gone for things that people most want – they want a new boiler, double glazing, cavity wall insulation."

Climate Change Minister, Greg Barker, said: "The Green Deal Home Improvement Fund is another way the Government is making it simpler and cheaper for people to stay warm and improve their homes. I want households across the country to benefit from more energy efficient homes and reduced bills through the Green Deal, and that is what the new home incentive fund will do."

Ministers and officials also appear to have addressed one of the criticisms of the previous scheme, whereby people had to pay £100-150 for an upfront assessment of their home to see what measures would work best. Up to £100 of the assessment cost will now be refunded after works are undertaken, under the new plans.

Davey said that the Government had got the focus on loans wrong first time round, but lessons had been learned: "I still think the pay-as-you-save [financing] model has a really important future. But what we got wrong was to say it was the only show in town. People want to finance it in different ways, and you know what, I don’t care. What I care about is people making their homes more efficient, and getting their energy bills down, and the Green Deal assessment has been key to doing that, and because of that the Green Deal has been a success.

The package of measures to be unveiled today were part of a round of horse-trading in Whitehall last winter, under a deal that saw changes to social and environmental levies after David Cameron was reported as saying he wanted to "get rid of the green crap" on energy bills. The deal saw targets for solid wall insulation reduced under the 'energy companies obligation' (ECO).

However, the package fell short of the type of reforms that some had been calling for, such as offering discounts on council tax or stamp duty.

John Alker, director of Policy and Communications at the UK Green Building Council, said: "We welcome this package of measures which represents a genuine attempt to rescue the Green Deal and shows that Government remains committed to home energy efficiency. The increased cashback for solid wall insulation is particularly encouraging following the cuts to ECO. But this isn’t 'problem solved’ for the Green Deal. The scheme’s initial cashback went unspent so it’s important that history doesn’t repeat itself."

Davey said he thought the incentives "more than offset the changes made [to ECO] last year."

Household energy bills have risen regularly in recent years, leaving the average bill at £1,264 a year for electricity and gas. The payments to be announced today will be guaranteed for the first £50 million the Government pays out.