Households installing efficient boilers and insulation to receive government-backed cash payments
The government will today confirm that households undertaking energy efficiency improvements will be eligible for discounts worth up to £1,000 from a new £205m fund designed to accelerate take up of the new Green Deal scheme.
Up to £125m of the funding will be provided through a cash back scheme, which will offer households payments based on the number of energy efficiency measures they install.
BusinessGreen understands people installing eligible new boilers will receive up to £270, those undertaking cavity wall insulation will be awarded up to £250, loft insulation deployments will be backed by up to £100 in cash payments, and those undertaking solid wall insulation will receive up to £650. A wide range of other energy efficiency technologies will also be eligible for payments.
Each household will be able to receive cash back payments worth up to £1,000, providing them with an additional incentive to undertake energy efficiency improvements when the Green Deal scheme comes into full effect next January.
Writing on Twitter, Climate Change Minister said the move was “fantastic news”, adding that “up to £1,000 cash bonus for a full home retrofit will be massive boost to market”.
His comments were echoed by Energy and Climate Change Secretary Ed Davey, who said the cash back offer “will help get the Green Deal off to a flying start”.
“It really is a great offer,” he said. “The more work households have done, the more energy they stand to save and the more cash they receive.”
He added that businesses should move quickly to take advantage of the likely increase in demand for Green Deal services. “[This offer represents] a great opportunity for businesses of all sizes to take advantage of this transforming market – and now is a critical time,” he said. “Whatever your business does in this sector, the Green Deal will have an impact. So I say to businesses large and small – gear up, get training and get ready to take advantage of the Green Deal.”
The Department of Energy and Climate Change (DECC) stressed that the offer was time-bound and limited to one per household. It also confirmed that the cash back rates announced today would only be available for the first £40m of the alloted funding, raising the prospect of reduced payments as the scheme becomes more popular.
“The best offers are available first, so people should act fast once the scheme opens in January because cash back rates may reduce after that,” DECC said in a statement.
Significantly, households will only qualify for the incentives if they use installers who have qualified under the government’s Green Deal scheme. However, they will not have to take out a Green Deal financing package for the work, meaning that they can still access the cash awards if they pay for the improvements themselves rather than agree to pay for the work over time through a small levy on their energy bills.
The scheme will be available in England and Wales for 15 months through to April 2014, while Scotland, which already operates a boiler scrappage scheme, will soon introduce its own Green Deal incentive scheme backed by £23m from the government’s fund.
The proposals will be broadly welcomed by the construction and energy efficiency sector, which had been waiting for confirmation on how the government’s incentive fund would be allocated ahead of the full launch of the Green Deal early next year.
It is hoped that the prospect of cash back incentives will encourage more firms to develop Green Deal services, including some of the high profile retailers who are yet to sign on to the scheme.
However, some boiler companies are likely to be concerned that the announcement of the new incentives could lead to a lull in the market while customers wait for the cash back payments to be introduced.
“The cashback scheme should provide a welcome stimulus to the marketplace,” said Andrew Warren of the Association for the Conservation of Energy. “Whilst only measures installed via an official Green Deal provider can qualify, I am glad that the government is deliberately not excluding those who opt to pay for energy saving measures without taking out a formal Green Deal Finance package.”
Shadow climate change minister Luciana Berger warned the Green Deal might not be worthwhile for many consumers even with the cash back offer.
“No amount of gimmicks and giveaways can distract from the fact that unless the Green Deal is a good deal and saves the public money, then it will not be a success,” she added.
“Because of the high interest rates that consumers will have to pay on Green Deal finance, even with the energy secretary’s announcement of a £1,000 discount, in many cases people will still have to pay more in interest payments than the upfront cost of the measures they take out under the Green Deal.”