Homes on the hook for fees as Green deal fund shuts

thermo house meter©iStock.com/Suljo

THE Government's Green Deal fund closed its doors abruptly on Friday night, leaving households to pay for energy efficiency home assessments that would have been refunded under the scheme rules.

The Green Deal Home Improvement Fund was suddenly closed after "overwhelming popular demand", the Department of Energy and Climate Change (DECC) said at the end of last week.

"The Green Deal Home Improvement Fund is a world first and in a short space of time it has proved extremely popular. We were always clear there was a budget which is why we encouraged people to act quickly," Parliamentary Under Secretary of State for the department, Amber Rudd, said.

Rudd added that households who had already applied for funding before the Friday cut off would have their applications processed.

But the scheme worked through refunds: households had to set up and pay for a Green Deal assessment and then apply to get the amount they'd spent, typically £100 to £150, back.

Stuck in the middle

As a result, many homes hoping to take advantage of the Green Deal will be stuck in the middle.

They've already paid for a qualified assessor to look at whether their property can make home energy efficiency improvements, but, as a result of the Government's sudden announcement, they won't be able to claim that cost back from the fund.

We were always clear there was a budget which is why we encouraged people to act quickly.
Amber Rudd, DECC Under Secretary of State

The DECC haven't yet ruled out paying back consumers caught out by the end of the scheme, but neither have they committed to paying back those that took up the fund's offer in good faith.

Households may be able to cancel their home checks or, if it's already been carried out, get their money back from the energy inspecting firm they used but there's no guarantee.

£120 million for checks gone

The Green Deal has been plagued by confusing terms and conditions, uncertain returns and high start up costs.

The £120 million home improvement fund was set up to remedy the last of those problems by refunding the amount households had to pay to have their home assessed.

The assessment is a chance for a trained professional to look at whether homes can cut costs by making changes like getting a new boiler, installing double glazing or putting in insulation and usually costs £100.

However, the outcome of the assessment is unknown. The assessor could conclude that the household isn't suitable for a Green Deal loan, either because there are very few improvements to be made or because the upgrades available don't fit the scheme.

So it was a high cost with uncertain returns and, therefore, a very real barrier to take up, especially for those households most concerned with cutting their energy costs.

Up until a few days ago, the funding went even further than that, giving households cash back for installing their improvements so that some were effectively getting the whole thing for free.

The Government withdrew that part of the scheme when, last week, they got closer to spending their budget.

Looking ahead

Homes caught out by the sudden stop to funding may face some hours of negotiation to try and get their cash back, but they're not the only ones who will feel the end of this funding.

The extra cash was more or less propping up the Green Deal scheme by getting people to take the first steps towards getting a loan.

Before the fund was implemented, in May this year, just 2,828 households had a Green Deal loan (the target for the end of last year was 10,000).

Now that it's gone, take up may slump down again.

Please read our full disclaimer for important information that relates to the service we provide and your use of this site.

We aim to provide free reviews and comparisons of consumer products and to keep our editorial content as objective as possible. To keep the site free, we are paid by some providers when new customers take products after they've clicked on our links. We don't allow our editorial content to be affected by those links, however we may not include all of the products available in the market. Finally, we do not submit or process any applications for any products or services and we cannot guarantee that any product or service listed on this website will be available to you. Credit providers make the final decision on whether an application for credit will be accepted.

If you would like to get in touch with us you can contact us here.