Green Deal was the first scheme of its kind to offer loans for energy efficiency improvements where repayments are linked to consumer energy bills. The idea being that, providing you don't dramatically change your energy usage, you should always be financially better off for taking out a Green Deal finance plan.
The scheme was governed by a ‘Golden Rule’ to ensure that you couldn’t borrow more than what your installation would save you on your energy bills. If an installation cost more to implement that what it would save on fuel over its estimated lifespan (up to 25 years), then you would only be able to borrow the value of the predicted savings and pay off the remaining balance through other means.
What made Green Deal loans so unique was the fact that they were linked to the property not the person. So if you chose to sell your house, your Green Deal repayments would simply get transferred to the new occupants - who would also benefit from the property’s renewed energy efficiency.
Unfortunately, the scheme got off to a rocky start and soon got a bad reputation in the media. Despite some growth during early 2015, the scheme never gathered the necessary momentum for continued investment. The Government decided to pull the plug in the summer and review strategy for future schemes.