Tree inside a light bulb to depict green issuesQ: Is the new Green Deal a good deal?

A: The government’s Green Deal launched at the end of January, promising to help 14 million homeowners cut their energy bills by offering loans to pay for energy-saving home improvements.

These loans can be paid back very gradually in installments through your electricity bill, therefore spreading the payments. The loans are also tied to your property, so if you move you won’t be liable to keep paying it back.

But will these Green Deals actually save you money?

As this ‘Green Deal’ is effectively a very long-term loan with interest rates, it may very well be cheaper to pay for the work (such as cavity wall insulation or double glazing) upfront or with a regular loan.

Also as the loan is attached to the property, if you attempt to sell yours in the future and there is still a loan outstanding, it may put buyers off.

Plus, the Green Deal loans are calculated using your current energy consumption, so if this changes drastically, there are no guarantees your repayment plan will accommodate this.

You also need to be aware that if you default on the loan, your energy supply may be cut off.

My advice would be to thoroughly do your research and see if it will be more cost effective to finance any home improvements up front before tying yourself in to a long loan with a Green Deal provider.

Having said that, though, the Government has put aside a first come, first served cashback deal, which allows you to claim back some of the costs of the energy-saving improvements.

But this is not a finite pot, with only £125 million put aside and when it’s gone, it’s gone, so do your research now and act fast if you want to take advantage of the Government cashback offer to fund your home improvements.

Andrea Ventress, money expert


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