Green deal seeks to boost energy efficiency A long-awaited move to encourage millions to ditch their old boilers, double glaze their windows and insulate their lofts gets under way on Monday amid competing claims about whether it will work. Cashback offers of more than £1,000 are available to lure early adopters to the so-called green deal energy efficiency programme that coalition ministers have been promising since they entered office in 2010. The scheme lets people take out a loan for more than 40 energy-saving home improvement measures, from fixing a draughty window to installing a solar water heater. A basic interest rate of 6.96 per cent will be charged on loans, which can be paid back over time through savings on household electricity bills. This is a more ambitious - and complex - scheme than past efforts, which have typically offered cheap or free insulation just for walls or lofts but have failed to do enough in a country with some of the world's draughtiest buildings. Of the UK's 26m homes, millions do not have full double-glazing and most lack adequate insulation, efficient condensing boilers and even proper heating controls. Commercial buildings are often as bad so keeping them all warm produces 38 per cent of the country's total greenhouse gas emissions, according to the energy department. Yet the green deal has attracted substantial criticism since it was first mooted. Estate agents say it could make it harder to sell a home because the loan is attached to a house, not its inhabitants, and potential buyers might not want or understand the extra debt they are taking on. Others worry it will encourage so-called "cowboy builders" into people's homes and be hard for renters to use. But the biggest controversy has been over whether it will really deliver enough savings on energy bills to cover the cost of people's loans. Even some of the environmental groups that would normally be expected to embrace moves to boost energy efficiency are concerned about this. "The interest rate on loans is bound to undermine the green deal's appeal to cash-strapped households," said Andrew Pendleton of Friends of the Earth, adding the scheme was undermined by such "significant flaws." But PwC, which advises the non-profit company organising green deal financing, said loans would be affordable for more than 80 per cent of Britons and it was easy to "get distracted by the headlines or expect too much too soon." "The reality is this has the potential to be a truly transformational programme, kick-starting a much needed upgrade of Britain's housing stock, and helping the economy on the way, " said Paul Davies, a PwC partner. It could also make one of the most significant contributions to our 2020 carbon reduction commitments. Though the initial green deal interest rate will be 6.96 per cent, once operating fees are taken into account, overall rates on a £5,000 loan will range from 7.67 per cent to 7.96 per cent, PwC says, depending on the duration of the loan. Rates will climb to more than 9 per cent on loans for smaller amounts of money over 25 years. The UK Energy Research Centre, meanwhile, is to publish research on Monday, showing it is "overly simplistic" to expect too much from the green deal, given the lack of appetite people generally have for energy efficiency. Some homeowners would think about using it, especially those already planning to spend about £5,000 on a new boiler and insulation, the centre said. But people spending this amount on something like a new kitchen were less likely to spend more on extra efficiency measures. "The fundamental insight from this research is that home renovations have to be understood through the lens of normal, routine domestic life," said George Chryssochoidis of Norwich Business School, a co-leader of the research. Decisions to renovate are rooted in a need to improve the quality of life at home, rather than any burning desire to be energy efficient.