Yet Another Green Deal Thread......This time from EPC view point....

Berneray · Dec 22, 2012

Okay so here is the story.

Signed up a deal for a 4kwp system last week.

Stone built cottage....75% double glazed......17 year old oil boiler for c/heating and hot water.

When the Assessor emailed through the ECP we got their just by the skin of our teeth.

However what struck me as strange was that there were no Green Ticks on any of the recommended measures....Green ticks means eligible for Green Deal Finance.

The largest recommendation was a new boiler.......but that did not qualify for Green Deal as the savings did not justify it.

The tick on the EPC was orange which apparently means the customer may have to contribute from his own funds toward the install.

Green Deal finance is based on a 7% charge made on the amount of the loan...

So say replacing the boiler cost £2000.....then the interest would be £140

So I spoke to the Assessor we use and have a good working relationship as my thinking is if a 17 year old boiler in an old stone built house does not qualify for Green Deal..............then what on earth will.

His opinion is that new windows, pv solar, pv thermal and in a lot of cases new boilers will not qualify for Green Deal finance as the savings will not justify the cost...They cannot meet the Golden Rule....

The interest on a Green Deal is 7% of the amount financed. i.e. If a new boiler costs £2000. Then the interest is £140 so the amount paid back via their energy bill is £2140. Repayment is over seven years is £25 a month or £300 a year. In the case above the anticipated savings from a new boiler are £175 a year. So its does not qualify...

Is this you guys understanding or am I missing something...

I've been approached a a training company offered Green Deal Assessor Traiing which when passed will allow me to carry out Green Deal Plans.....I am tempted as I can apparently also carry out our own EPCS. We need on average three a week at £75 each. Course costs £2150 with some government funding so it wuold pay back itself after about 15 EPC's...

Anyone else considering becoming involved from the Assessor side....I have heard some of the large national pv companies are training up their Sales Reps along these lines...

Look forward to your comments which are always interesting...

TedM · Dec 23, 2012

The 7% interest is the annual figure, not for the whole term. The term can be anything up to 25 years as long as it is not more than the expected life of the measure being paid for. If you borrow £2000 at 7% over 7 years the repayments would be about £360 a year. These details will vary depending on the specific offers available from GD providers.

More realistically a new boiler would have repayments over maybe 15 years which would be about £216 a year at 7% interest.

The anticipated savings of only £175 seem very low. Most GD documents I've seen quote around £500 as the annual savings to be expected from fitting a new condensing boiler.

Eco Deal · Dec 23, 2012

The orange tick mean extra funding is required to meet the golden rule.

or the installation cost needs to be lowered to turn green.

or ECO funding could help if they qualify

Berneray · Dec 23, 2012

So where is the great deal for the public.

A flat rate of 7% is hardly brilliant. And why would you want to borrow a relatively small amount of £2000 over such a long repayment term as 15 years. That means paying back £5240......

Am I missing something here

TedM · Dec 23, 2012

Well, the total payments would be £3235 not £5240. But many commentators have said that a GD interest rate of more than 2% will lead to a failure as the Golden Rule will fail to be met in far too many cases.

The GD has only 2 real 'benefits' for homeowners - credit if you cannot get it anywhere else cheaper (such as extending the mortgage) and walking away from the repayments when you sell the house (whether that affects the price you can get for the house remains to be seen). Any enforced (by the house buyer) early repayments to clear the GD balance will likely be cripplingly expensive for those with more than 15 year terms as the GD provider will be allowed to charge for their lost interest.

The other advantage is for landlords who will be able to get energy efficiency upgrades to their properties paid for by their tenants - although both will have to agree before a GD can be taken out.