What will my electricity bills look like with a green deal plan?
Posted by Tasha Kosviner on 30 July 2013 at 9:30 am
So, you’ve had your green deal assessment and you’ve chosen a green deal provider with whom you’ve agreed the terms of your loan.
You know the cost of the work proposed and how much energy you are predicted to save over the course of your loan. And you’ve reassured yourself that, based on the assessor’s calculations, the golden rule will apply: that is that cost of your loan repayments, which will be added to your electricity bill, will not exceed the predicted savings on your energy bills.
But what will those bills look like and how can you reassure yourself that the golden rule continues to apply once those bills start to come in?
Emily Hamilton, spokesperson for the Green Deal Finance Company, the body charged with accessing finance for green deal loans explains that your bill will be itemised so you can see how much of it is down to the cost of the loan and how much is down to your electricity usage.
“Each bill will display a single separate price incorporating the loan interest rate, GDFC service charge and the cost of the measures,” she says. “In addition, customers receive an annual statement from the GDFC showing the amount paid to date and the remainder to be paid.”
The GDFC’s annual service charge will be £20 a year, in addition to the one off set up charge of £63. Your provider may or may not choose to pass on those charges to you and they will make this clear to you when you take out your loan.
It is reassuring to note that the charges and interest on your loan will be fixed for the duration of the loan.
There are two further variables that could lead to unexpected increases in your electricity bill. As we have explained, the golden rule is not guaranteed. As such, it could be the case that if the cost of energy goes up faster or higher than expected, or if you crank up the thermostat during a particularly cold winter, you may end up ‘saving’ less under the golden rule than expected. It may even be the case that for the course of your loan, your bills end up being higher than they would have been had you not taken out a green deal plan in the first place. Remember though, that the key words here are “for the course of your loan” – the cost-saving benefits you get from energy-saving measures such as loft or wall insulation, double glazing or draft proofing should outlive the lifetime of your loan.
One final thing to remember when you’re looking at your bill under your green deal plan. If you heat your house using gas or oil, then you will probably see your electricity bill go up. Don’t be afraid! This is just the cost of your loan being added to your usual electricity use. The increase should be offset by a comparable reduction in the amount of oil or gas you are buying.
If you have a question about anything in the above blog, please ask it in the comments section below.
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