The Green Deal: How The UK Government Is Pushing Green Energy

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Green Deal UK

Approximately one quarter of the UK’s carbon emissions come from the energy used in homes — things like running appliances, lighting, and especially heating. It’s not uncommon for Brits to live in houses that are over 100 years old, and these older homes can be extremely inefficient at retaining warmth, with heat leaking out through poorly insulated roofs and walls. Modernizing these houses can be expensive, and homeowners are often caught in a catch-22 style situation — their utility bills are too high, yet they can’t afford the work needed to reduce their bills.

This is where The Green Deal comes in. The Green Deal is a UK government policy that was launched in October 2012 by the Department of Energy and Climate Change. It is a loan that can be used to pay for energy saving measures — things like loft insulation, wall insulation, upgraded heating, double-glazing, draught proofing or solar panels. Unlike a traditional bank loan however, a Green Deal loan is paid back using the money saved by the energy efficiency work. For example, if a household uses the Green Deal to install solar panels, and as a result their electricity bill is reduced by £200 per month, then they will pay back no more than £200 each month. Instead of paying the money back as you would with a normal loan, the £200 would instead be added to the customer’s electricity bill. Once the loan has been paid off, the customer enjoys cheaper bills and a smaller carbon footprint — it’s win-win. The loan is attached to the property, not the occupant, so if you move house the loan is handed over to the new owner.

In 2008 the UK government pledged to reduce the country’s carbon emissions by 80% by 2050. Since then several schemes have been put in place to help people pay for energy efficiency products, with catchy names like CERT, CESP, CSCO and ECO. The Green Deal is unique to the UK, but other countries have similar programs in place.

Will The Green Deal be a success? In March 2013 the government released its first set of statistics, revealing that slightly over 1,800 assessments had been carried out. It’s a promising start, but there are several million homes that could still benefit. Lack of publicity, uncooperative landlords, and delays in funding have all been blamed for the slow start (as recently reported by the Energy Saving Trust). The UK’s overall carbon footprint took a steep drop between 2008 and 2009, but rose again from 2009-2010 (see here), so the government are banking on The Green Deal and other funding schemes being able to reverse the trend. Only time will tell if it works.