Energy-Saving News

UK Energy Efficiency Home Loans Take A Lesson From The Carbon Trust

Posted on 03. Mar, 2010 by Ross in Government Policy, United Kingdom

Smart, forward-thinking businesses have been doing it for years. An interest-free Carbon Trust loan of up to £500,000 for new energy-saving machinery, energy efficient lighting or other low-carbon technologies has been a great way to cut costs, whilst lower loan repayments than the achieved savings led to immediate positive cash flow.

Now UK householders are being offered the same opportunities as part of the government’s new domestic green loans scheme, which could see as much as £700 million a year lent to households to improve energy efficiency, announced by Department of Energy and Climate Change’s Ed Miliband MP.

The scheme represents great opportunities for homeowners. With the repayments for improvements structured in a Pay-As-You-Save manner (repayments set to be less than the projected savings), the loans will leave more money in the back pockets of the occupants of the UK’s 22 million homes. The loans will be tied to properties rather than individuals too, so that if a family move before payback on the loan, then the next occupants will be responsible for the repayments (as they also enjoy the benefits).

Improvements to be considered for loans include insulation and micro-renewables such as small wind turbines and ground source heat pumps. The deluge of money going into these areas will be a massive boon for companies providing such products, leading to strong local job creation for manufacturers and installers alike.

The government also stands to benefit as well. Strong achievements in domestic energy efficiency will help the UK towards its 34% carbon reduction target by 2020, and lessen the number of new power stations required to replace the country’s current stock of ageing coal power plants. The loan scheme will also stimulate the green sector at a time of recession, bolstering economic metrics such as unemployment rates.

Aside from the obvious plus points, the scheme will represent a substantial financial commitment from the government at a time when it is under pressure to start to reduce the huge national deficit.

There are worries for first-time buyers as well: properties which have received a green makeover will have additional overheads to meet (from the loan repayments), which will tempt mortgage companies to offer smaller mortgages to allow for the extra financial burden.

Image of Ed Miliband by theageofstupid @ Flickr

Related posts:

1. £51 Million in New UK Public Sector Energy Efficiency Loans Now Available From The Carbon Trust
2. Carbon Trust Farms Interest With Free Agricultural Loans For Energy Efficiency
3. Carbon Trust: Bigger Loans, More Businesses, Less Carbon
4. Carbon Trust Building The Low-Carbon Workplace: £350 Million Commercial Energy Efficiency Fund
5. Blue Chip Hits The Jackpot With 500k Carbon Trust Loan For Energy Efficiency

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Tags: energy efficiency, Government Policy, home, loans, uk