The Green Deal

Many businesses and NGO’s have expressed concern about the public’s willingness to take up the Green Deal scheme as similar programs promoting energy efficient home improvements have failed to spark demand and participation from the public. 

 
In response to these concerns, the chief secretary to the Treasury Danny Alexander announced the approval of £200m to be used as an incentive for the public to pick up the Green Deal scheme when it is available for homeowners in October 2012. 
 
Both the business community and NGO’s welcomed this announcement as another step towards the successful roll out of the Green Deal scheme.
 
While the primary goal of the Green Deal scheme is to increase energy efficiency of UK homes and business buildings to reduce the carbon emissions associated with climate change and to reduce energy costs, there are other benefits of the Green deal scheme. 
 
The government estimates that in the long term the scheme, if successful, will create 65,000 new jobs and lead to £14b in new investment from the private sector. Additionally, energy companies are mandated to assist with energy improvements for low income households. 
 
The goal of the Green Deal scheme is to have 14m UK households upgraded for energy efficiency, making the UK the European leader in reducing greenhouse emissions.
 
Experts state that the success of the Green Deal program is dependent on the experience of those homeowners who take up the scheme early, thus there must be great attention to the details of the program so that all goes smoothly. Some critics expressed concern that the current £150 cash rebate for those who adopt the Green Deal with be insufficient in spurring demand for the program since the rebated will be added to the amount of the loan.
hile the details of how the £200m will be disbursed to early adopters of the scheme, experts agree that using this money for a reduction in the council tax or the stamp duty tax will be a powerful tool to motivate homeowners to take up the Green Deal within the first year. The government is considering this proposal as well as others for the distribution of the funds.
 
Another consideration discussed by critics of the Green Deal is the interest rate charged on the loan might be considered too high by homeowners and put them off the scheme. In order to address this concern a group of private companies and firms have organised the Green Deal Finance Company, which will sell bonds on the open market whose proceeds will fund the costs of the scheme. 
 
The leaders of the non-profit finance company report they believe this will result in a lower interest rate on the loans for the energy improvements, thus lower costs for the consumers. While the cost of the monthly payments added to the homeowner’s energy bill should be offset by the reduction in energy costs, many consumers are wary of taking up another expense. 
 
Government officials hope the added incentives will motivate UK homeowners to study closely how the Green Deal scheme will benefit them by saving money in the long run.  
 

 

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