Green deal in the press.

[Earthstore]

I thought I should bring it to your attention as I read it in the Sun, which I am sure none of you read,
The Green Deal had some really bad publicity, see what you think?
I hope the link works...


Government?s flagship energy-saving scheme branded a ?rip-off? due to eye-watering interest rates | The Sun |News|Politics

 

[JulianC]

Sums it up quite nicely I think.

 

[telectrix]

you call 6.9% " eye-watering"? . my bank have just offered me a personal loan at 26.9%. no that's a rip off. if i ever saw one.

 

[Earthstore]

you call 6.9% " eye-watering"? . my bank have just offered me a personal loan at 26.9%. no that's a rip off. if i ever saw one.

Who do you bank with, Pounds to pocket...

 

[Greenday]

For those of you old enough to remember------- "The Emperors New Clothes"------me thinks

and Im a GDA!

 

[telectrix]

Who do you bank with, Pounds to pocket...[/QUOT


nope. RBS. their idea of replacing overdraft. trouble is, it's a far higher rate than the O/D. bloody numpties.

 

[Eco Deal]

Just done A GDR

£750 cash back
Eco funding

the customer eyes will be watering with happiness ....

 

[Elmer BeFuddled]

The Coalition hopes 14million families will take part but only FIVE have signed up.

Is that 5million families or 5 families???

 

[Earthstore]

Is that 5million families or 5 families???

Only 5, the scheme has not really started yet, as with most Government schemes it has been delayed..

 

[SolarCity]

British politics stinks. Caroline Flint is point scoring and she knows full well that this kind of bad publicity at the start of a scheme can seriously damage it.

- - - Updated - - -

British politics stinks. Caroline Flint is point scoring and she knows full well that this kind of bad publicity at the start of a scheme can seriously damage it.

 

[Earthstore]

Just done A GDR

£750 cash back
Eco funding

the customer eyes will be watering with happiness ....

This is what I see to be a large fault in the system and will lead to the GD being sold when there are better alternatives.

Let's assume the customer will stay in the house for the full term of the system/loan, it sounds great to offer them £750 and a system that in essence should be free (it will not cost them more than they are paying out at the moment) but add up the full repayment at around 7% with the compounded interest and that £750 is just the sweetener to get them to sign up.
Go to the high street for funding at around 3.5% compound that over the term and the customer would save thousands.

If they wanted the GD to work well then the interest should be better that most can get on the high street, simple...

This is part of the problem with the economy in the western world, borrow because it looks good for today and to hell with tomorrow...

 

[finchy]

Nicely put ! The rich get richer... GD is really for wealthy landlords wishing to upgrade there stock at the expense of the tenant (best of all without putting up rent) !! Win win ....!

 

[Eco Deal]

Do Agree the intrest rate should be low as possible

 

[TedM]

I see that Mark Group are offering free GD assessments (at least for an introductory period) and BG are charging £99. Cut-throat competition from the start.

 

[The Solar King]

As normal the Taxpayers Alliance are up their own back sides as this is self funding and using what was CERT.

More interesting is the reference to the scheme in Germany which was for insulation. This was withdrawn as it was deemed to have failed after a short period due to very low take up. This is in a country where electricity costs a lot more than in the UK.

Whilst being highly sceptical about the Green Deal, I do not have a better answer than the general principals on which it is based. The sums of money involved in improving the thermal efficiency of existing building stock are vast and unaffordable from the public purse. The need to do something about it is urgent if emission reduction targets are to be met. There are also major implications if the prevention of a marked rise in fuel poverty is seen as a priority.

The two major issues are the cost of finance and the reliability of the Green Deal assessment in accurately predicting fuel savings.

The first should be relatively easy if a little pragmatism was used as the driving force rather than ideology and libertarianism. The Government has been happy to pump vast sums of money in to the economy through Quantative Easing, the idea being the sale of bonds would stimulate the banking sector to buy this cheap money and do what they need to do to get the economy moving. All it appeared to do was allow them to reinforce their balance sheets. The Government then provided yet further funding at base rate or less specifically for lending for mortgages and business. Some of this is filtering through to first time buyers, but the banks are still not playing their part. Why not provide money on the same basis to the green investment bank or other Green Deal funders with a proviso of a maximum interest rate of 2.5%? This would be more than enough to cover the costs of loan administration and provide a profit. Maybe this won't happen as you really need a 'not for profit' organisation to run it which would mean the Governments fat friends couldn't get their snouts in the trough.

What it would mean was more Green Deal measures being cost effective as financing costs were lower. The benefits of increased commercial activity would stimulate the wider economy through the multiplier effect.

We also need to see no early repayment penalties on Green Deal loans. It is highly likely this will be something required as many prospective purchasers may make it a condition of sale if there is such a charge against a property.

The second point may be a little more difficult. Pressure on GDAs in vertically integrated businesses are likely to be considerable. My view is they should all be independent contractors to remove this risk. We are then left with their skill set and the methodology they work with. Talking to professionals in the field they are highly sceptical that a couple of weeks training at most can adequately equip someone with the kind of detailed knowledge required to properly assess a building and calculate it's performance. You are left relying on the methodology. If it is not sufficiently robust and foolproof in any way, there will be problems. As there are areas that can be subjective over occupancy and use, there are inherent risks. I do not have sufficient detail knowledge to produce any sort of empirical analysis, but understand from the comments of others there is a major risk. I suspect there will be adjustments over time as issues come to light. What is more important is compensatory funding for anyone who falls victim to a lack of cost saving.

This still does not take in to account people who are currently under-heating their property. They will simply use the same amount of energy to improve their comfort levels and be faced with a Green Deal Loan on top.

Part of the problem with the Green Deal is a lack of reasoned communication and explanation. If people can see they are able to save money, they will go for it. The problem is reasoned explanation means the Government having to own up to a number of inconvenient truths about the future cost of energy and the shambles of current energy policy. Whilst it remains the puppet of the fossil fuel and nuclear industries, this is unlikely to happen.

 

[TedM]

The Green Deal Finance Company (GDFC) has today confirmed that initial interest rate for finance packages available under the Green Deal energy efficiency scheme will stand at 6.96 per cent.

The underlying rate means that when operating fees are taken into account indicative interest rates on a financing package of £5,000 will range from 7.67 per cent to 7.96 per cent depending on the duration of the loan.

The company said that due to the fixed costs associated with the administration fees households and businesses would get a better rate of interest if they undertook a wider range of building improvements.

For example, a Green Deal package of £1,500 that only undertook basic insulation would result in a maximum interest rate of 9.34 per cent, but a wider package of measures worth £5,000 would result in an annual interest rate of 7.96 per cent over 10 years or 7.67 per cent over 25 years.

Breaking: Green Deal Finance Company confirms 6.96 per cent interest rate - 25 Jan 2013 - News from BusinessGreen

 

[Gavin A]

That's disgraceful at a time when the UK government itself can borrow at 2%, so if they'd directly borrowed to fund this scheme even with a 1% markup to cover admin costs the rate could have been 3-3.5% (as I believe it was in Germany when they ran a similar scheme).

This highlights the absurd devotion of this government (new labour was as bad) to the concept of private finance to fund public projects rather than actually using state borrowing at much lower interest rates to fund it directly.

 

[Vegelen]

Just heard about a fantastic new energy scheme run by the government where you can borrow lots of money at mega interest rates and save lots of money on your energy bills.
Its called "The Green Spiel".

 

[Berneray]

Its not only the Sun thagt thinks it is a non started....its also the Guardian

A Green Deal but not a great deal | Money | The Guardian

 

[Berneray]

And here is another slant on the Green Deal................Have a look on the interent and in the Home Improvement sections of the newspapers at the number of companies that have suddenly appeared with Green Deal in their name....for them its like Solar all over again.

Its a simple marketing opportunity with the backing of the government. They can let the UK Government market and publicise the campaign...then they can piggy back on the legitimacy of the scheme.....while at the same time completely miss-selling a whole range of Green Deal products.....and will use their own in house fiance instead of Green Deal finance....

Take windows and doors for example. They will never ever make the Golden Rule. So why are Anglian, SaveHeat, Cold Seal ect ect all running adverts for windows under the Green Deal banner....

Simple. Becuase they can use the legitimacy of the scheme to sell windows....financed not by Green Deal but by their own finance...

And exactly the same will happen with the larger solar companies....They will use the Green Deal banner .....to sell solar. As both solar and windows will appear on Energy Performance Certs as recommendations...but with Organge NOT Green ticks...so where will the shortfall come from....Inhouse finance of course...

Watch this space.....