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Concerns over Green Deal debts

Published on 02 May 2013 12:30 PM

Fears of going into debt are putting older and disabled people off a Government scheme aimed at encouraging homeowners to make their properties greener, a report suggests.

 

The Green Deal allows householders to take out loans to pay for improvements that will make their homes more energy efficient. Once the work is completed, the homeowner pays off the loan in instalments through electricity bills.

But the idea of going into debt is acting as a deterrent to many older people, as well as families and households with disabilities and long-term health conditions, according to reports in the Guardian.

The newspaper says that focus groups conducted by the charity National Energy Action (NEA), which is funded by the Department for Energy and Climate Change, found that 'many of these households are struggling to heat their homes' and 'are concerned about taking on a debt/further financial commitment like a green deal in the current financial climate'.

The Government has also launched the Energy Companies Obligation (Eco), which is supposed to complement the Green Deal by placing an obligation on energy suppliers to provide additional support for low-income and vulnerable households.

But the research found that this was also failing to have the desired impact because people found it too complicated.

The general consensus among the focus groups was that local authorities and voluntary organisations were considered to offer the most trustworthy and reliable advice.

Green Deal debts 'stay with the property'

NEA also conducted interviews with officials from local authorities in January 2012 in which they gave a 'mixed response' to the Green Deal and Eco. Some said they could see 'strategic benefits' of the scheme. However, others said the initiative presented 'operational challenges'.

It added that there was less enthusiasm for the Green Deal among tenants in the private rented sector as they were more reluctant to take out loans to improve the energy efficient of their landlord's property.

A spokeswoman from the Department for Energy and Climate Change said: 'Vulnerable householders and those on low incomes will receive around £540 million of support per year, under the Energy Company Obligation, to help with energy efficiency improvements.

'Unlike a normal loan that follows the householder wherever they go, green deal loans stay with the property. So if the householder moves out, the new bill payer takes on responsibility for repayments, because the new resident gets the benefits.'

Copyright Press Association 2013

Last updated: Oct 06 2017

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