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The government鈥檚 flagship retrofit scheme received a boost ahead of its full launch next week after it emerged that the interest rate charged against Green Deal loans will be less than 7% lower than many in the industry feared.

The level of interest charged on Green Deal loans affects the amount of work that can be done within the scheme鈥檚 鈥済olden rule鈥�, which states that the combined cost of the energy efficiency measures and finance must not exceed the savings on a customer鈥檚 energy bills.

The interest rate was expected to be between 6.5% and 8%. But speaking ahead of the launch of the Green Deal on Monday, energy minister Greg Barker (pictured) said the headline interest rate would be 鈥渁t the high end of 6%鈥�.

The news came as a welcome fillip to the scheme, which has suffered a string of setbacks ahead of its launch. It also comes as a host of big names, including influential chair of the committee on climate change John Gummer, , which is calling on government to bolster the Green Deal.

Steven Heath, external affairs director at manufacturer Knauf Insulation, said he was 鈥渧ery glad鈥� an interest rate had been set, because he had feared one would not be available by the launch.

However, he said other countries with similar schemes, such as Germany, had used a lower subsidised interest rate. 鈥淚t remains to be seen whether a higher rate can persuade enough householders to take up these measures,鈥� he said.

But John Egan, chief executive of Green Deal provider Enact Energy, said the rate was 鈥減robably the best that you can do on a commercial basis鈥�.

Tom Younsepour, senior policy officer at the British Property Federation, said: 鈥淚t鈥檚 better than what we were hearing was going to happen, but I don鈥檛 think for large landlords [the rate will] be a compelling incentive itself.鈥�

Providers will hope the lower rate will boost demand after it emerged this week that just five households have had a Green Deal assessment since October, when it became possible to offer them.

Barker defended the low number of assessments, saying the Green Deal was a long-term scheme and had not yet been directly marketed to consumers.

However, he said he did not expect a significant upturn in insulation activity following the scheme鈥檚 launch.

鈥淭he Green Deal is a new market that is going to be driven by a whole range of factors. We don鈥檛 know how and when the new entrants are going to deploy their marketing packages,鈥� he said.

鈥淭here isn鈥檛 a wall of money out there that鈥檚 going to smash into the market. What we want is the gradual growth of a substantial, sustainable new market in retrofit.鈥�

He added that the government intended to 鈥渒eep under review鈥� its decision to scrap changes to Part L of the 好色先生TV Regulations, which would have driven take-up of an extra 2.2 million Green Deals.

The changes, known as consequential improvements - but dubbed a 鈥渃onservatory tax鈥� by parts of the media - would have required homeowners to make energy efficiency improvements when they carried out other work on their homes.

Implementing the changes to Part L is also a key part of 好色先生TV鈥檚 Green for Growth campaign.

Read the full Greg Barker interview in next week鈥檚 好色先生TV