As part of the 2011 Energy Act, the Green Deal was launched in 2013, with the intention of making homes across Britain more energy efficient. It was launched to great fanfare as the greatest home improvement programme since World War II. The idea was that you would in effect take out a loan of up to £10,000 to make ecological improvements to your property. The loan would be paid back over a 25-year period by being added every month or year to your energy bill. What was meant to make the Green Deal attractive was that the amount of money you would pay back would be made in accordance with ‘The Golden Rule’. The Golden Rule stated that the money you would pay back on the loan would never be more than the amount of money you saved on the ecological improvement made to your home. So, for example, if new cavity wall insulation saved you £150 per year on your energy bill, you would never pay back more than £150 per year on the loan. The idea being that the ecological improvements made on your home would cost you nothing. A nice idea. It didn’t work.
It was no surprise to me that the Green Deal was abandoned in 2015 due to lack of take up. Why? Well, for two main reasons. Firstly, launching a scheme where you were in effect being asked to ‘borrow’ money and take out a ‘loan’ with a Green Deal provider was never going to work while we’re still trying to recover from the biggest economic crisis in living memory. Psychologically, taking on more debt for a bit of insulation or new double glazing wasn’t going to work with people struggling to pay their living costs from month to month. Yes, I know the Golden Rule was supposed to make this loan ‘free’ but the reality was that interest was being charged against the loan so it was still a ‘debt’.