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The Green Deal is the Government’s flagship energy efficiency scheme aimed at renovating millions of draughty, energy-inefficient homes and office buildings across the UK. This scheme will begin later this year* and will give everyone in the UK the opportunity to improve their homes - by making them more energy efficient.
British property is amongst the leakiest in the Western world. Too many people work in energy wasting offices or put up with ever rising domestic energy bills just to keep the living room liveable. That is uncomfortable for them and unsustainable for the environment.
The vision for the Green Deal and the new Energy Company Obligation (ECO) is an ambitious and far-reaching one. It's a world where the UK leads with a dynamic new energy efficient market, with nationwide brands, local businesses and community organisations competing to deliver the best proposition for the consumer.
The Green Deal
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The Green Deal will put consumers back in control. By 2020, we will have seen a revolution in British property. Millions of us will live and work in greater comfort, through upgraded and insulated properties which do not cost the earth to heat, with smarter controls and meters helping us manage our energy use, and generating our own heat or electricity. Fewer of us will struggle with our fuel bills, unable to reach basic standards without spending a huge proportion of the weekly budget. And for many people this will mean a more attractive home - modern measures like external solid wall insulation can transform a tried pebble dash terrace into a tidy, smart facade; internal measures can be the catalyst for new render or repainting; replacing an inefficient boiler can be done easily whilst renovating the kitchen.  |
Because the Green Deal will reduce energy consumption, many more households will be able to hold down their energy bills even as energy prices continue to rise.
For the country as a whole, properties leaking heat and money are also properties leaking carbon. The central rationale for the Green Deal is to reduce carbon emissions cost effectively. We know insulation is often the most cost-effective way to reduce carbon emissions from buildings. It is also often one of a package of improvements, including heating measures, needed to lift a family out of fuel poverty. Consumers will therefore be encouraged to take out a comprehensive package of measures. These measures should equip homes for the low-carbon future of 2050.
Enshrined in the Energy Act 2011, the Green Deal allows for private companies to offer upfront energy efficiency investments and then recoup payments through energy bills. This simple idea has a significant effect. It means that consumers face no upfront costs, and also means that they only make the payments whilst they stay at the property. As the charge is added to the electricity bill, it stays with the property and is taken on by the new bill payer as they move into their improved home. The Green Deal "Golden Rule", set out in legislation, specifies that any charge attached must be less than the expected savings from the retrofit. So the customer gets a cosier, more efficient home, at no upfront cost, that is expected to pay for itself.
The Green Deal Process - Green Deal Advisors
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In order to qualify for a green deal the government has proposed that a green deal advisor has to visit your home to determine its energy efficiency and what the most effective improvements would be. Other than your home being suitable for improvment, there are no other criteria for being eligable for a Green Deal. |
This green deal advisor will be accredited through the government body in charge of green deals, and will offer trusted high quality advice on green energy alternatives. The advisor will also offer you advice on energy saving behaviour you could take to help lower your carbon footprint further. This will be done by completing what is known as an energy performance certificate (EPC); this EPC will take into account all aspects of the property and generate an efficiency level.
The green deal advisor after completing the EPC will offer independent standardised advice to you, to help you understand the methods you could undertake into making your home more energy efficient.
Click here for the Green Deal Process explained.
The Finances
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The unique quality of the green deal plan is that consumers can chose to pay for the work as they wish to. This could be with the entire installation been paid for with the green deal, partial payment through the green deal it offers the opportunity to pay back the cost of instalment through your energy bills, spreading the cost and allowing it to be passed on to future occupiers. |
The unique quality of the green deal plan is that consumers can chose to pay for the work as they wish to. This could be with the entire installation been paid for with the green deal, partial payment through the green deal it offers the opportunity to pay back the cost of instalment through your energy bills, spreading the cost and allowing it to be passed on to future occupiers.
While the green deal is not a conventional loan, it is attached to the energy metre at a property and is likely to count as a fixed-term credit agreement. This means that green deal providers will need to have a consumer credit license and act in compliance with consumer credit quidance. They are therefore obligated to only offer credit responsibility and they must ensure that payments are affordable for all customers.
There will be considerable consumer protection built into the framework where consumers who default on their green deal payments will be treated the same as those who default on energy bills. There is more legislation to do with consumer protection which is yet to be released by the government.
The repayment of the green deal will be recovered through the charge on the energy bill in order to create simplicity for the consumer. Although the government have suggested the green deals will be financed through large scale energy providers this will not inhibit the consumer's ability to switch energy suppliers, although they have not specified yet how this is so.
At the end of the charge period the green deal charge will be wiped from the account and therefore off future energy bills.
Future prospects
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The government still has a lot to define in the framework of the green deal legislation. If you require any more information on the green deal or wish to talk to one of our experienced green energy advisors please feel free to fill in the contact form. |
* All the information on this site is based on our best understanding of the information currently available. All items are subject to change. We have years of experience in this industry, if you would like to know more about us or why we feel we are best placed to give you 'our best understanding', please click here.
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