How Does Green Deal Work to Improve Energy Efficiency?

With the instigation of Britain's first post-war coalition government in 2010, one of the big initial policies to be announced was the creation of a 'Green Deal' for homeowners. The British government is committed to a tough set of energy saving targets, some set by the EU and others, even higher, set by the outgoing administration in Westminster. While the construction of large wind farms, a push for solar power and some large-scale power generation changes have been initiated, including Britain's first new nuclear power station for a generation, the Green Deal was proposed as a means to plug the shortfall through simple measures that save individual households money by reducing their energy emissions.

Coming into force in 2013, the logic of the Green Deal is unassailable. Many homes have substandard insulation, old boilers, 'dirty' energy generation and so forth. These elements of a home can be costly and time consuming to update or replace, leading many homeowners to leave their homes 'leaky' and spending the money on more pressing concerns. The Green Deal, though, offers home improvements for these individuals - for free.

Surely, economists might argue, subsidies are not free but paid for through tax. The repayment structure of the Green Deal, however, is ingenious. A government loan initially covers the cost of the improvements, with repayments being added to the energy bills of the homeowners. The eureka moment is that repayments are only added as and when energy bills are reduced by the energy saving measures, so the costs never actually go up. The savings, so to speak, pay for themselves.

There are various ways in which you could benefit from the Green Deal, depending on what type of property you have and what its major energy efficiency shortfalls are. The first stage of an application will involve an assessment of the property in question and the extent to which the suggested improvement is suitable. These assessments may be charged, although if there is to be a fee, the assessor must notify the homeowner in advance.

Given the nature of Britain's current housing stock, some of the most effective savings to be made are likely to come from improved insulation. This, while not as exciting as the installation of a new solar panel or intelligent boiler, can often be an inexpensive renovation and once the repayments on the government's initial loan are paid off, you are likely to start seeing significantly lower energy bills as a result.