There are three major types of improvements homeowners make in order to save money on their energy costs. The first is switching energy suppliers by comparing prices and finding a supplier who is cheaper than their current supplier to reduce their tariff. The second way you can save money is by investing in small projects or changing your habits in order to reduce energy usage. The third way, and the one currently touted by the government as the best solution, is by making major improvements to your home through schemes like the Green Deal programme.
Which is the most important improvement to focus on first? It may be better to focus on the quick win and compare energy prices, change suppliers, then use your savings to fund small improvements to your household. Though the Green Deal programme seems promising, there is too much uncertainty around it right now. Here are the details of the Green Deal scheme and how it could affect your home.
Property values may increase.
The major pro of the Green Deal scheme is that, in addition to eventually saving money on your energy bills, you may be able to increase the value of your property. Assessments conducted by the Department of Energy and Climate Change have determined that the installation of such measures as loft insulation and more energy-efficient boilers can increase your home’s energy band from G to E and the price by Â£16,000. If you live in the North East, the price could increase by Â£25,000, and in the North West, by nearly the same amount Â£23,000. For London residents, your home value may increase by as much as Â£41,000.
Buyers may not be willing to take on debt.
The appeal of the Green Deal scheme for sellers is that once you sell your home, the debt is sold with it. The energy improvements are tied to the specific address and energy bill, not the individual who initially installed the improvements. This means you won’t be paying off improvements for a home you no longer live in. However, one survey of prospective buyers said that nearly half of them would want the Green Deal loan paid off before they considered purchasing a home, and a fifth would reconsider buying a property with this loan.
Saving money on energy bills is appealing.
The main appeal of the Green Deal scheme is that you will be saving money on energy. A new boiler may drastically cut down your energy costs, but it costs a lot and a Green Deal loan can come with high interest rates. Instead, you could save money on energy bills through small improvements you make by yourself. You don’t necessarily need funding to seal cracks, install a programmable thermostat, turn down your boiler slightly, or turn off your heating when you leave the home on a holiday, for instance.
Passive improvement in bills from switching.
If you compare energy suppliers and find a supplier who is cheaper than your current one, you could save a lot of money passively. This method of passive savings is appealing to many homeowners, as saving energy can require you to change your habits or consumption patterns. Simply switching suppliers is one of the easiest ways to save money.
Adopting green energy is worth considering.
You should consider installing solar panels, if possible, with or without a Green Deal loan. Your energy supplier might be willing to finance part of the cost, for instance, and you could end up selling back excess energy to help pay off the cost of purchasing and installing these solar panels. Once you are producing enough solar energy to get off the grid, you are no longer dependent on changing energy prices.
It’s hard to recommend one improvement for every single homeowner. Some may be willing to take on a Green Deal loan in order to improve a home they plan to live in for years to come, while others might prefer to compare energy suppliers and choose the cheapest available rate to easily save money. You may be able to fund small improvements, or you might need to use the cashback scheme to help you finance changes to your home. The easiest solution is clear switching energy suppliers but it does not have the long-term potential of other solutions, so don’t stop there once you notice monthly savings.
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