Green Deal passes £50m loans barrier

The Green Deal, the Government’s home energy efficiency scheme, has broken through the £50 million barrier in terms of loan applications and finance plans passing through the system.

The Green Deal Finance Company (GDFC), set up to provide Green Deal Plan administration and finance to approved Green Deal providers, said last week it had over 14,000 Green Deal plans and applications in the system – totalling £50.3 million in value. The figure is a five-fold increase on May last year, when there were less than £9.97 million worth.

"Milestone"

"£50 million worth of plans and applications is a major milestone when you remember it's barely two years since the first Green Deal plan was signed," GDFC chief executive Mark Bayley said.

Over £30 million has so far been lent by the GDFC since the Green Deal launched in January 2013, and £21 million worth of applications have been received by the company in the last six months. Applications since Easter have exceeded £1.8 million per week, with 550 households making applications weekly, the GDFC said.

The growth, described as a "step-change" by Bayley has been a long time coming, however. The previous Government hailed the Green Deal as the biggest national improvement programme since the second world war and said it would see "billions of pounds" lent every year to homeowners and businesses to invest in measures such as insulation and new boilers. It also said it would create 250,000 jobs between now and 2020.

Government lifeline

But the scheme last year looked as though it may fail and had to be thrown a lifeline by the Government in the form of Green Deal Home Improvement Fund, a multi-million pound cash back scheme incentivising households to take out Green Deal plans through a voucher system. The fund proved so popular that the first time around, it had to be closed suddenly for fear it would go over its allocated budget. Meanwhile, the money allocated so far by the GDFC in the form of a loans which are repaid through the savings achieved on energy bills, is only just over a fifth of the way through its £244 million loan fund.

In February, former Energy Minister Greg Barker, the Green deal’s architect, blamed the scheme’s problems on the Big Six energy companies which he claimed had never seriously tried to sell the Green Deal to consumers.

Green Deal Providers praised

Today, Bayley praised "the considerable effort of our small and medium sized provider network", which it has fallen on to market the Green Deal to households.

Boilers, solar PV, and external wall insulation are the top three measures financed by the GDFC, which has an average plan size of £3,500.

This article has been adapted from an article published in GreenWise.