Green Deal is based on a couple of major factors to determine the ‘Golden Rule’. The predicted performance of your house (via an Energy Performance Certificate) and your behaviour in it. These two factors are designed to predict how much you can afford to pay back against the approved green deal ‘improvement’ measures. The Golden Rule states that your bills should be no higher than they are currently and that the savings accrued from the ‘improvements’ are used to repay the loan that will be attached to your house.
So all sounds lovely – house improved at little to no upfront costs and no difference in the amount of money flowing out of your bank account (the money just goes to different places).
Firstly, the way that the Energy Performance Certificate (EPC) is calculated is not very good at predicting the energy performance in older homes (inc. solid walled terraces). It tends to assume that your walls perform worse than they actually do. This under predicting of performance means that the savings that are predicted by the model will be over-estimated. This could be a major issue, especially since one the major priorities of the Green Deal is to insulate solid walls.
Secondly, the way that the assessment tools work means that they don’t take into account damp in a meaningful way. The measures that might be recommended therefore can either cause or compound damp problems. Damp walls are less thermally efficient than dry ones by around 30%. So in reality some of the ‘improvement’ factors might not perform as well as expected.
Thirdly, models use precise specifications in their calcs. They do not take into account factors like poor detailing (causing thermal bridging). So how your house appears in a computer model will be different from how it actually is, no matter how many assurances one puts on it. So in practice your house will not perform as well as the models predict. The Green Deal providers will be looking for ‘value for money’, so materials used will be the cheapest possible and there will be huge pressure on installers.
So the upshot of these factors is that it may well be that the savings predicted are over-estimated. Thus you will be offered measures / costs that may well be unrealistic. This could be devastating for those already close to fuel poverty. The repayments to the Green Deal Provider will be fixed and so you will not be able to influence these, so the only variable will be reducing energy costs. With energy costs rising this would mean a drastic change in the heating level of your home…….
The fact that the interest rate on your loan is set at 7.5% for the Green Deal Provider this could leave an especially bitter taste in the mouth for those potentially facing higher costs thanks to the programme that is designed to save carbon and money.
For more info on the report that sets out the limitations of the Green Deal calculation tools visit: http://www.stbauk.org/ and look at the Responsible Retrofit of Traditional Buildings.