Homeowners will get a helping hand to improve the energy efficiency of their homes now that Green Deal finance has been announced.
Under the Green Deal, householders will be able to get an upfront loan over a maximum of 25 years from their chosen scheme provider to pay for efficiency improvements - which can include new boilers, insulation and draught proofing. They will then repay the loan through higher electricity bills as long as they live there.
However, loans will only be granted if they comply with the "Golden Rule", under which Plan repayments must not be greater than the reductions in energy bills which are expected over the lifetime of the loan.
Today's announcement, which has set the fixed interest rate for Green Deal Plans at 6.96% per year and confirmed that each plan will have a set up charge of £63 and an annual operating charge of £20, means the big energy suppliers will now be able to provide financing to their customers.
Until recently, the Big Six energy firms, have been letting their customers book Green Deal Assessments for their homes to ascertain what efficiency improvements may be suitable but have been unable to actually start financing the work.
Long-term and low-cost funding
Mark Bayley, chief executive of the GDFC, said: "We can now offer Green Deal Providers a one-stop-shop to set up, finance and administer Green Deal Plans. This package will provide very long-term and low-cost funding to enable householders across all parts of the country to finance energy efficiency improvements to their homes.
"By ensuring that householders can only borrow what they can expect to save in energy bills, and by offering a fixed rate for 10 to 25 years, Green Deal Plans will be affordable and widely available to over 80% of the population. No other consumer credit product offers a fixed rate for up to 25 years and is this inclusive."
Energy and Climate Change Minister Greg Barker added: "It is clearly very early days but the latest figures on the Green Deal show that this new market is gathering real momentum. The Green Deal gives people the opportunity to improve the efficiency of their homes, make them warmer and protect themselves from rising energy bills."