Thousands face ‘rip-off’ energy bills for decades after failure of the £400m energy scheme 

Thousands of homeowners face rip-off energy bills for decades after being ‘scammed’ into joining a state-backed £400million eco-energy scheme that ‘utterly failed’.

The Green Deal – which ministers trumpeted as the ‘biggest home improvement programme since the Second World War’ – was abandoned after two years as MPs admitted it had been a ‘complete fiasco’ that brought almost no environmental benefits.

But more than three years after its collapse, families remain trapped repaying loans of up to £21,000 which they unwittingly took out for solar panels, replacement boilers and insulation.

The repayments are added to monthly utility bills which in some cases have quadrupled once the loans were added to the cost of their usual fuel and will take more than 20 years to pay back.

In some of the worst cases, the scheme was allowed to be ruthlessly exploited by Government-approved ‘gangster companies’ who conned the elderly and vulnerable, including those with dementia, MPs told the Commons.

Because loans were attached to a property, many victims are unable to sell their home and are effectively ‘imprisoned’ in them for the rest of their lives. The result has been ‘years of agony’ for people fighting for compensation.

MPs have now called for urgent action, saying the scandal showed the UK’s system of regulation is ‘simply not fit for purpose’. 

When the Green Deal was launched by the Coalition Government in January 2013, climate minister Greg Barker said it would make 14million homes more energy efficient by 2020 and upgrade the UK’s entire building stock by 2030.

When the Green Deal was launched by the Coalition Government in January 2013, climate minister Greg Barker said it would make 14million homes more energy efficient

The aim was to encourage homeowners to save energy by installing loft and wall insulation, more efficient boilers, solar panels and ground source heat pumps at no up-front cost. Homeowners were lent cash via private companies with repayments collected through energy bills in what was described as ‘pay as you save.’ But take-up was far lower than hoped, largely because the interest rate for loans was almost 14 times the Bank of England rate at the time, meaning that in almost every case it would be cheaper for a homeowner to raise cash needed off their own house.

Ministers finally announced they were pulling financial support for the Green Deal in July 2015 to ‘protect taxpayers’ because of low take-up and ‘concerns about industry standards.’ But nearly four years later, thousands of people are still paying the price. In 2017 the Government sold the Green Deal loan book to a private firm, which now deals with consumer complaints.

SNP MP Gavin Newlands said the Green Deal ‘failed utterly’. He told the Commons: ‘Through their incompetence, the UK Government has in some cases allowed unscrupulous operators to prey on vulnerable families who ultimately just want to be able to go back to a warm home every day’.

‘When a consumer sees a UK Government logo on paperwork, they do not expect to get scammed. People across the UK have been through years of agony in seeking redress.’ The Department for Energy and Climate Change spent £240million on the scheme and another £154million went on the Green Deal home improvement fund.