Under the Green Deal scheme householders can take out a Green Deal Loan to contribute to the installation cost of energy efficient home improvements and the repayments are made out of future energy savings. Due to a poor take up, in January 2013 the Government launched a £125 million cash-back scheme to encourage more householders to improve the energy efficiency of their homes by taking advantage of the Green Deal. The Green Deal cash back scheme is coming to an end this year so householders will have to move fast if they want to take advantage. Applications will be accepted until the end of June 2014 and the cash back, issued in the form of vouchers, must be redeemed by the end of September 2014.
Green Deal Golden Rule
Some energy efficient home improvements fall foul of the so-called Green Deal ‘golden rule’ which requires that the monetary value of future energy savings must be equal to, or more than the loan which paid for the home improvements. Solid wall insulation is one such measure due to its high cost and relatively low pay-back in energy savings. In this case, use of the cash back scheme can help because if less money needs to be borrowed under the Green Deal to carry out the installation, it is more likely that the ‘golden rule’ will not be breached.
£4,000 Stamp Duty Rebate
Plans have also been announced by the Government regarding the possible introduction of a stamp duty rebate of up to £4,000 for householders who carry out energy saving improvements to homes they have just moved in to. Full details have yet to emerge but some industry sources have suggested that it may be introduced to coincide with the withdrawal of the Green Deal cash back scheme.