Green Deal Finance UK: History and What Has Replaced It

The Green Deal was supposed to revolutionise home energy efficiency in the UK. Launched in January 2013 under the Energy Act 2011, it offered homeowners a way to finance energy improvements — insulation, boilers, double glazing — and repay the cost through savings on their energy bills, with repayments attached to the electricity meter rather than to the individual. It was an ambitious idea. It did not work as intended.

Understanding why it failed, and what has grown in its place, is essential context for any homeowner trying to navigate the current landscape of energy improvement grants.

What Was the Green Deal?

The Green Deal was a government-backed finance scheme administered by the Department of Energy and Climate Change (DECC). The mechanics were:

A homeowner commissioned a Green Deal Assessment from an accredited assessor, who would identify improvements and calculate the likely energy savings.
A Green Deal Finance Plan offered a loan to pay for the measures. The loan was attached to the electricity meter — repayments were collected via the energy bill, and if the property was sold, the obligation transferred to the new occupant.
The loan amount was governed by the Golden Rule: repayments could not exceed projected savings on energy bills.

In theory, the Golden Rule meant improvements would pay for themselves. In practice, it was the scheme's fatal flaw.

Why the Scheme Collapsed

The Green Deal never achieved meaningful uptake. By 2015, fewer than 15,000 Green Deal plans had been agreed — against government projections of hundreds of thousands. Several problems compounded each other:

The Golden Rule was too restrictive. The projected savings used to calculate the Golden Rule were based on standard assumptions that rarely matched individual circumstances. For many households — particularly those in larger or older properties — the Golden Rule meant the finance available was too small to fund the improvements they needed.

Interest rates were high. Green Deal loans carried interest rates of around 7–8% at a time when mortgage rates were close to historical lows. Homeowners who could remortgage to release equity had no incentive to use an expensive on-bill loan instead.

The meter attachment put buyers off. Attaching a repayment obligation to the electricity meter — so that it transferred to a new owner — created problems at the point of property sale. Buyers were wary of inheriting an unknown obligation; solicitors were uncertain how to handle it; mortgage lenders were uncomfortable.

Awareness and trust were low. The Green Deal was complex, and the accreditation framework for Green Deal Providers was under-resourced. Several providers went into administration, including the largest, Home Energy Solutions, which collapsed in 2015, leaving customers with incomplete works and disputed obligations.

The main Green Deal Finance Company ceased lending in 2015. The government wound down the scheme in 2019.

ECO4: The Main Successor for Fuel-Poor Households

The Energy Company Obligation (ECO) scheme — now in its fourth iteration as ECO4 — is the primary route for eligible households to receive fully funded energy efficiency improvements.

ECO4 requires the UK's largest energy suppliers to fund insulation and heating upgrades for households in fuel poverty. Eligibility is based on:

Receipt of qualifying means-tested benefits (Universal Credit, Pension Credit, Child Tax Credit, and others)
Or referral through the LA Flex route, where local authorities can nominate households with a low EPC rating (D–G) and low income, even without benefit receipt

Eligible measures include loft insulation, cavity wall insulation, solid wall insulation, and heat pump installation. The scheme is free at the point of delivery. To check eligibility and find an ECO4 installer, visit the government's Simple Energy Advice service or contact your energy supplier directly.

ECO4 runs until March 2026, with its successor scheme expected to continue support for fuel-poor households beyond that date.

The Great British Insulation Scheme (GBIS)

Launched in 2023, the Great British Insulation Scheme targets households with an EPC rating of D–G and occupants in Council Tax bands A–D in England. Unlike ECO4, it is not restricted to benefit recipients — households just above the fuel poverty threshold can also access support.

GBIS focuses on single insulation measures — primarily loft insulation and cavity wall insulation — rather than whole-house improvements. Partial funding contributions may be required from some households depending on income.

Installers must be TrustMark-registered. Check eligibility and find installers via the government's GBIS portal.

The Boiler Upgrade Scheme (BUS)

For homeowners considering a heat pump, the Boiler Upgrade Scheme provides a grant of £7,500 towards the cost of an air source or ground source heat pump (or £5,000 for a biomass boiler in rural areas). The grant is available in England and Wales.

To qualify:

The property must have a valid EPC with no outstanding recommendations for loft or cavity wall insulation (or the recommendations must have been acted on)
The installer must be MCS-certified and must apply for the grant on your behalf through the Ofgem portal
You must be replacing a fossil fuel heating system (gas, oil, or electric direct-acting heat)

The BUS grant represents a significant improvement on the Renewable Heat Incentive (RHI) that preceded it — the process is simpler and the upfront funding more accessible. For a full guide to heat pump installation and the BUS, see Heat Pump Installation Guide UK: ASHP, GSHP and the Boiler Upgrade Scheme.

Other Schemes Worth Knowing

Warm Home Discount — an annual rebate of £150 on energy bills for households on low incomes or Pension Credit. Applied directly by energy suppliers.

Home Upgrade Grant (HUG2) — targeted at rural households in England that are off the gas grid and have an EPC of D–G. Funds insulation, solar, and low-carbon heating. Administered by local authorities.

Local authority schemes — many councils run their own energy improvement schemes using UK Shared Prosperity Fund and other grant sources. Eligibility and measures vary by area. Your local council's website is the starting point.

ECO Flex — allows local authorities and participating charities to refer households that don't meet the standard ECO4 benefit criteria but are in fuel poverty. Worth exploring if you fall just outside the standard eligibility.

Using Multiple Schemes Together

The current landscape encourages households to combine support where possible:

Insulate first under GBIS or ECO4, then install a heat pump under the BUS (loft and cavity insulation recommendations on the EPC must be cleared before BUS eligibility applies)
Combine local authority grants with ECO4 referrals for larger improvement packages
Check whether your property is eligible for both GBIS and a BUS grant — these are not mutually exclusive

The key difference from the Green Deal era is that most of these schemes provide grants, not loans. There is no interest to pay, no meter attachment, and no Golden Rule calculation. For households who qualify, the current suite of schemes is considerably more accessible — and more generous — than anything the Green Deal offered.