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    • CommentAuthorTriassic
    • CommentTimeAug 1st 2012
     
    I keep getting e-mails about the "Green Deal", suggesting I attend various training courses.

    The latest offer had a list of points and this set me to wondering. What is it all about and do I need to know more, ideally without wasteing my time?

    So anyone here got any answers ---

    How does the Green Deal work?
    How is the Green Deal funded?
    What kinds of customers will the Green Deal benefit the most?
    How are Green Deal loans repaid and how long is the payback period?
    What is the "Golden Rule?"
    What are the roles of the Green Deal Assessors, Providers and Installers?
    What do you need to do to prepare your business for the Green Deal?
    How will participants in the scheme earn their revenue?
    What are the rules about relationships between Assessors and Providers?


    By the way I started the tread here because I keep being told energy assessment is key to the deal?
    •  
      CommentAuthorDamonHD
    • CommentTimeAug 1st 2012
     
    Hi,

    You could do worse than start here, I think:

    http://www.superhomes.org.uk/resources/green-deal-offer/

    Rgds

    Damon
    • CommentAuthorJoiner
    • CommentTimeAug 1st 2012
     
    You could also do worse than cast your eye over the results of a 'search' for "Green Deal" in the search facility at the top of the page. :wink:
    • CommentAuthortony
    • CommentTimeAug 1st 2012
     
    I have little confidence in it working for anyone other than solicitors. It is a nice idea and well thought out but like tower blocks I cant see it working in our society without significant changes to the way we value, buy and sell houses, not going to happen

    Remember HIPs?
    •  
      CommentAuthorSteamyTea
    • CommentTimeAug 1st 2012
     
    I am with Tony on this one for the same reasons.
    I can't see why anyone would buy a house with a debt against it.
    •  
      CommentAuthorDamonHD
    • CommentTimeAug 1st 2012
     
    The debt should be relatively small and saving money: I can't see why anyone would buy a house that's big enough to cost more than they can afford to keep comfortable, but people do, even though that liability isn't capped.

    Rgds

    Damon
    •  
      CommentAuthorted
    • CommentTimeAug 1st 2012
     
    For anyone who can borrow on their mortgage for less than the proposed 7.5% interest rate for the Green Deal it will never make much sense.

    For landlords who can get their tenants to pay for energy efficiency improvements then it will make a lot of sense.

    Those on low incomes or with solid wall homes will get extra help via the ECO part of Green Deal.

    How does the Green Deal work? You borrow money and pay it back via your electricity bill.

    How is the Green Deal funded? Supposed to be bundled via the bond market at advantageous terms on the basis that the loans are 'low risk'. Government will provide some seed funding and initial incentives. ECO is funded by levy on bills (as CERT is now).

    What kinds of customers will the Green Deal benefit the most? Those who cannot raise finance via an extension
    to their mortgage. Landlords.

    How are Green Deal loans repaid and how long is the payback period? Via electricity bills, flexible. Can be paid back early but may attract extra fees.

    What is the "Golden Rule?" The amount of repayment must be less than the predicted saving on the energy bill.

    What are the roles of the Green Deal Assessors, Providers and Installers? Assessors visit prospects and assess their energy use (think SAP EPCs) and advise how it can be reduced. Providers handle the finance. Installers put in the insulation or whatever.

    What do you need to do to prepare your business for the Green Deal? Depends which segment of the market you might be interested in.

    How will participants in the scheme earn their revenue? Installers get paid by the Provider, Provider is paid from repayments, Assessors still not completely clear.

    What are the rules about relationships between Assessors and Providers? Still not completely clear but they need to be completely independent.
    • CommentAuthortony
    • CommentTimeAug 2nd 2012
     
    7.5% just killed it stone dead for anyone with a even only half a brain cell.
    •  
      CommentAuthorSteamyTea
    • CommentTimeAug 2nd 2012 edited
     
    So if your annual bill for all domestic energy is £500 (as mine is).
    I go and borrow £3000 for improvements (not a huge amount), that would attract a interest rate of 7.5%. If the loan is over 20 years that will be £288 per year repayments (total repayment price of £5,693).
    My actual energy use should now be £212 or about 2 MWh a year at current prices.
    I think that would not be possible on at least 3 counts, 2 MWh/year is about my DHW cost, so would leave nothing for anything else, £3000 would not buy and install a HP or ST (the only alternative to resistance water heating) and because I could not achieve the Golden Rule criteria, I can't get it anyway.
    7.5% is way too high.
  1.  
    Similar, but slightly more 'live' example: I have a detached solid-walled house on 3 floors. Lots of external wall. It has IWI to around 0.5 U value on most walls, but was done 25 years ago when I (and the industry generally) was a lot less hot on air-tightness and detailing.

    Even if I manage to distract the assessor enough for him/her not to notice the IWI (?not difficult? non-invasive survey - discuss on separate thread!) RdSAP would probably not be able to show annual savings of more than £500. Max term = 25 years. Est cost of EWI at £100/m2: c£25000 (and bear in mind *many* EWI contractors charge more than £100/m2). 'Golden rule' allows me a loan of £12.500. ECO may chuck a bit extra in the pot, but surely not £12,500, so where do I find the balance? A loan? As Tony says, 7.5% would put off most mere mortals, so if I need to take out a non-GD loan for the balanace, why don't I do it for the whole lot?

    Thee *only* thing that excites me about it ( and I honestly doubt it will happen to a great extent) is the possibility of prices plummeting in the way that PV prices did, as a result of the GD 'markert intervention'.

    I don't think I'll be doing it.

    The hsg mkt, as prev stated, does not like charges on properties. There would be a lot of haggling on sales, with purchasers insisting the vendor 'buy out' the GD aas a condition of sale.

    Tell you what, double (or triple) energy prices, and it might become more popular.
    •  
      CommentAuthorSteamyTea
    • CommentTimeAug 2nd 2012 edited
     
    Posted By: Nick ParsonsThee *only* thing that excites me about it ( and I honestly doubt it will happen to a great extent) is the possibility of prices plummeting in the way that PV prices did, as a result of the GD 'markert intervention'.


    Glad you put 'possibility' in there.
    The UK market price for PV has been volatile to say the least, it should settle down to near enough world prices on modules, though not installations. Legislation keeps that high (and safety).
  2.  
    But whatever is the balance between materials and labour, PV installation prices have about halved. If that were to happen to EWI 'ball-park'figures (and I strongly believe it won't/poss even *cannot*), that would bring my example down to a point where the Golden Rule would cover 100% of the cost.
    • CommentAuthorJoiner
    • CommentTimeAug 2nd 2012
     
    Didn't I read somewhere that the GD "assessments" were inclined to be overly optimistic (perhaps to encourage take-up)?

    No hint of collusion between assessor and installer though, just that the sums apparently weren't stacking up when reviewed by someone who could add a column of figures and get the decimal point in the right place. :neutral:
    •  
      CommentAuthorSteamyTea
    • CommentTimeAug 2nd 2012 edited
     
    I would like to think so, but retrofitting insulation is labour intensive.
    All markets have the 'early adopter' syndrome, but some elements are greatly affected (or is it affected) by other competing markets.
    When the countries largest PV installer in 2004 was charging about £20k for a 3 kW system, most people said it was too expensive and would never take off. He struggled to make ends meet.
    Modules where about £3/Watt then, they are now £0.5/Watt.
    So the module price for a 3 kW system has dropped by £7500, inverters may be down about 20% from £1800 to £1440, saving another £360.
    Being generous let us say that 'the competitive market' has saved another 20% of the remainder or £1500.

    Add that lot up and you get £9360, so a 3kW system should be about £10640, about twice what is being charged (though would be wary of a £5000, 3 kW system).

    I am not sure where the other £5000 has gone to, can't all be rail, wiring, labour, commissions, mark up and early adopter market forces. Maybe it is.
    • CommentAuthorSaint
    • CommentTimeAug 2nd 2012
     
    Interesting take on Green Deal by ACE (Association for the Conservation of Energy) in January this year called Dead Cert :bigsmile: http://www.ukace.org/index.php?option=com_content&task=view&id=654&Itemid=26

    A more optimistic view on it a few months later though http://www.ukace.org/index.php?option=com_content&task=view&id=674&Itemid=83
    • CommentAuthorJoiner
    • CommentTimeAug 2nd 2012
     
    Good links!

    The linked-to Knauf report makes interesting reading and should keep Nick quiet for a bit. Can you pick any holes in their reasoning ST?

    http://www.knaufinsulation.co.uk/PDF/Green-Deal-Report.pdf
    • CommentAuthorPaulD
    • CommentTimeAug 2nd 2012
     
    I can only see this working where loft insulation and cavity wall insulation are used in conjunction with a condensing boiler and/or PV panel to meet the golden rule. Any other combinations are hard to justify. if you need a new boiler and you can get the feed in tariff its not a bad option. I can't really see any other options paying off. The government estimates for solid wall insulation are very optimistic.
  3.  
    +1 what Nick and Paul said

    I'm currently getting 30m2 of granite wall IWI'd and 20m2 of uninsulated solid floor relaid, costing about £3k plus VAT plus £1k replacement floor covering. Expected energy saving £150/y.

    So savings wouldnt even pay the interest, let alone capital, or bills for Assessors, Accredited installers etc.

    But it will extend the warm/dry/pleasant area of the house by 20m2, and be slightly green, which is why we're doing it - that isnt something I would expect GD to pay for!

    GD only looks like it would be good for

    1) very expensive jobs (which couldnt be financed cheaper other ways) which also
    2) have quick payback (enough to pay off 7.5% interest) which also
    3) happen to houses with very high bills (so enough savings can be found to pay back the loan) which also
    4) happen to people who are incentivised only by money, not their own comfort

    I cant think of many possible jobs that tick all those boxes - loft ins and CWI fail the first test, EWI/IWI and solar DHW and PV fail the second. Maybe heat pumps?

    To be fair, 7.5% is about longterm average mortgage rates.
  4.  
    I have just done the Green Deal Advisor Course at http://magmaenterprises.co.uk/index.html.

    It was explained that the 7% interest is a maximum and that competition between the 22 currently registered Green Deal Providers will force the interest rate down.

    However it is also irrelevant as under "the golden rule" the homeowner cannot be worse off , as the energy savings pay for the energy improvements. The Green Deal stays with the home, which will be warmer and cheaper to run so should not affect property sales.

    I know plenty of older people who could desperately do with a new condensing boiler as the boiler they have is hanging and about 70% efficient. Most have no chance of paying for one , under the GD they could have one as part of a package and get cheaper bills. How can it fail ?
    Furthermore the old person in question is unlikely to ever pay off the GD but at least will live out their remaining years in some comfort. With so many people in fuel poverty the government had to do something!

    There is also going to be ECO , totally free improvements for the very vunerable.

    There is some green deal information here :- http://www.greendeal-dorset.org.uk/
    •  
      CommentAuthorSteamyTea
    • CommentTimeAug 31st 2012
     
    Did they mention this:
    http://www.telegraph.co.uk/news/uknews/9503705/Green-Deal-to-hit-families-with-7000-interest-charge.html

    Have I mentioned that it is similar to a Student Loan yet?
    • CommentAuthortony
    • CommentTimeAug 31st 2012
     
    An older person could for sure walk into any high street bank or building society and get a loan cheaper than the Green Deal and I would recommend this route, they should already have got all the free insulation they need if not they have two months do do so.
    • CommentAuthorTriassic
    • CommentTimeAug 31st 2012 edited
     
    So if I need a whole house worth of insulation, walls, roof and suspended floor, where do I get my free insulation?

    By the way, I don't meet any of the eligability criteria so will I have to pay, if so, how much?
    • CommentAuthortony
    • CommentTimeAug 31st 2012 edited
     
    Try first they are sure to do the loft for you.

    Big sheds are selling rolls of insulation very cheap.
    • CommentAuthorGavin_A
    • CommentTimeSep 1st 2012
     
    Posted By: moulesnfritesHowever it is also irrelevant as under "the golden rule" the homeowner cannot be worse off , as the energy savings pay for the energy improvements. The Green Deal stays with the home, which will be warmer and cheaper to run so should not affect property sales.


    This sounds fine in principle, but as I understand it (following a meeting specifically to discuss it), the savings aren't based on actual gas consumption levels in the house, but on an RDSAP estimate of what those savings would be on average in an average house with those specifications and occupancy levels.

    The system is actually set up therefore in a way that basically guarantees that a significant proportion of people (who use less than the average to start with) will end up worse off under GD because the golden rule isn't based on actual gas / oil consumption levels, but some notional figure for what that consumption level ought to be.


    This is going to be a massive problem - I'm amazed at the level of stupidity involved in setting up this scheme tbh, this is absolutely basic energy advice stuff.
    • CommentAuthorbillt
    • CommentTimeSep 2nd 2012
     
    Posted By: Gavin_AI'm amazed at the level of stupidity involved in setting up this scheme tbh, this is absolutely basic energy advice stuff.


    I doubt that there was much stupidity. I'd expect that it has been carefully detailed to ensure take up is low and that the government won't have to pay a penny, nor will the energy companies, who have been made tax collectors by proxy in previous arrangements.
    • CommentAuthorSeret
    • CommentTimeSep 3rd 2012
     
    Posted By: moulesnfritesThe Green Deal stays with the home, which will be warmer and cheaper to run so should not affect property sales.


    Warmer maybe, not actually any cheaper though.

    Tbh, I don't think most people look particularly hard at utility bills or EPCs before moving in anyway, so I wouldn't expect it to affect property prices either. It'll only be an issue if solicitors or estate agents make a big deal out of it to their clients.
    • CommentAuthorPugliese
    • CommentTimeSep 3rd 2012
     

    Tbh, I don't think most people look particularly hard at utility bills or EPCs before moving in anyway, so I wouldn't expect it to affect property prices either. It'll only be an issue if solicitors or estate agents make a big deal out of it to their clients.


    Not sure I agree with that. When we went house hunting prior to doing our self build we had a budget of what we could afford to spend monthly on a property. The mortgage repayment + utility bills were used in the calculation. What we found was that when looking at Victorian houses we had at least £30k less to spend (i.e. less money to spend on the mortgage due to high utility bills). Am I alone in doing this? - these days I doubt it.
    • CommentAuthorSeret
    • CommentTimeSep 3rd 2012 edited
     
    Posted By: Pugliese
    Am I alone in doing this? - these days I doubt it.


    Not alone, but probably not the majority either. Most people aren't particularly analytical or data-driven and wouldn't know how to relate the energy use of two different-sized buildings (as people often move to change sizes). Previous utility bills should be provided as standard IMO, I'd be interested to hear from an estate agent how often prospective buyers actually ask for them.
  5.  
    Posted by Gavin:
    This sounds fine in principle, but as I understand it (following a meeting specifically to discuss it), the savings aren't based on actual gas consumption levels in the house, but on an RDSAP estimate of what those savings would be on average in an average house with those specifications and occupancy levels.

    The EPC (energy rating) produced for the property is based on RdSAP, but the Green Deal Advisor will take account of individual usage look at the individua'ls bills, times at home, etc. I wonder at what meeting you picked up the info you refered to. I am in the process of getting my domestic energy assessor paper and will be starting the Green Deal advisor course later this month.

    I do agree with everybody on the business of the high interest rate, it really limits the ability of the Green Deal.
    • CommentAuthortony
    • CommentTimeSep 17th 2012
     
    limits! I would say kills
   
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