Green Deal incentive scheme

The Green Deal incentive scheme is a government initiative signifying a nationwide drive to pursue energy-saving policies. The process was instigated as far back as 2008, with the introduction of the Climate Change Act outlining how Britain could cut-back on levels of energy waste. Amongst the projected plans were cutting carbon emissions to a third of their 1990 levels by 2020.

Contents of the scheme

The Green Deal incentive scheme offers a loan to home-owners to improve their property's energy efficiency (adding value to property). It has brought in legally-binding carbon budgets for every sector of the UK economy, from businesses to private homes. The reasons for the need to improve energy efficiency are plain to see. The UK contains a lot of old housing which is notoriously inefficient at conserving energy. With about 75% of the nation’s energy going towards heating water and households, a lot of this simply goes to waste due to factors such as poor insulation. In fact, this lost energy accounts for around 13% of all the carbon emissions. Business premises are even less efficient, leaking 20%.

With no restrictions based on who can actually apply for the scheme, applicants are also encouraged by the fact that credit history is not taken into account when applying for the Green Deal loan. Tenants are just as eligible as home owners,with the only proviso being that before upgrading work is undertaken, written consent must be received from the bill payer, landlord or freeholder.

What the Green Deal scheme is not is a personal loan for improving a property’s energy efficiency. It is actually more like a fixed-term credit agreement. This means that the customers are protected by law, under the terms of the Consumer Credit Act.

How the scheme works in practice

With the final aspects of the Green Deal incentive scheme due to be enacted in 2013, the amount of cash being made available to improve the energy efficiency of homes or workplaces is likely to average £6,500. The main focus for the renovations will be home insulation by adding protection to walls and roofs, as well as draught proofing and double-glazing. As the Green Deal rolls out, it will also include renewable energy.

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