The Green Deal
What actually is the Green Deal?
In the simplest form possible - the government is establishing a framework to enable private firms to offer consumers energy efficiency improvements to their homes, communities and businesses at no cost upfront, and recoup the payments through a charge in instalments on the energy bill.
"The Green Deal is about putting energy consumers back in control of their bills and banishing Britain's draughty homes to the history books. By stimulating billions of pounds of private sector investment, the Green Deal will revolutionise the way that we keep our homes warm, making them cosier, more efficient - and all at no upfront cost."
- Chris Huhne
"I have published the Government's detailed plans along with legislation that will allow the industry to bring the Green Deal into existence. The Green Deal will play a huge role in improving the energy efficiency of our homes and businesses, with ECO making sure that the most vulnerable homes benefit too."
- Edward Davey, Secretary of State
The government intends that the Green Deal UK will revolutionise the energy efficiency of British properties. The Green Deal plan is an innovative financing mechanism allowing consumers to pay back the cost of their improvements through their savings on their energy bills. This means consumers can see the Green Deal charge alongside the reductions in energy use which generate savings to the ultimate energy bill. Another advantage is, if the consumer is then to move out and cease to be the bill payer at the property, the financial obligation does not move with you, but will move to the next bill payer - the charge is only paid whilst the benefits are enjoyed meaning it does not stand as a conventional loan.
The only rule that stands with The Green Deal is that the expected financial savings for the customer must be equal to or greater than the costs attached to the energy bill. This is known as the Golden Rule.
The Green Deal removes many of the barriers faced by householders and businesses wishing to install energy efficiency measures. By making investments possible at no upfront cost (repaid through energy bills) it increases the incentive for owners, occupiers, tenants and landlords to take action.
Green Deal Assessment
A Green Deal Assessor's role is to provide the customer with a Green Deal Advice Report, detailing recommended measures and indicating whether these are likely to pay for themselves through reduced energy costs. This puts the consumer in a position to get quotes from Green Deal Providers, which if accepted will lead to signing a Green Deal Plan.
Assessments may not be free of charge, this is dependent on the assessor and actual energy savings will be dependent on usage and future energy prices; whereas the actual costs for the measures will be dependent on the prices quoted by Green Deal Providers.
In addition to the Green Deal Advice Report, clients will receive an Energy Performance Certificate (EPC) and Occupancy Assessment (OA).
The Assessor's site visit will seek to determine:
- Occupancy Patters
- Types of appliances and heating systems
- If any existing energy saving measures exist
- Whether the property is owned or rented, in a conservation area, built before 1900, or constructed in a non-traditional way.
Green Deal Plan
A Green Deal plan is a contractual agreement setting out the cost of the work, rate of interest, terms and the fixed repayments amount which is only available from the Green Deal Provider once a written quotation has been accepted.
The Green Deal Plan has been set out as a new type of unsecured loan attached to a property, repaid via a charge on the energy bill. Annual statements are sent out detailing how much has been paid off and the remaining balance.
Repayment calculations are based on EPC stated consumption, which is problematic for householders with below average energy consumption. Green Deal Providers can be contacted to amend payments and base these on actual energy usage if asked.
Even though you are signed to a contract, switching energy supplier is still possible as the Green Deal Plan payments will be collected by the new supplier.
Green Deal Installer
Once the contractual agreement is in place between the consumer and the Green Deal Provider, the provider will then source an installer to carry out the works to the property. Consumer protection and robust standards are said to be two pillars of the Green Deal which will ensure its success. The Government has gone to great lengths to make sure that the Green Deal will not be let down by poor workmanship. Only fully accredited Green Deal Installers can carry out Green Deal measures.
Installers must keep records of all Green Deal work carried out, which ensures work can be monitored at all times. This will protect the property owner and can be used to rectify any issues they may have with a Green Deal Installer. The Green Deal Provider will be at the first port of call if there is a complaint about an installation and they will make decisions on how to rectify complaints.
Property owners can choose to go directly to a Green Deal Provider or independent Green Deal Installer. However if the property owner decides to go directly to a Green Deal Provider, the Provider will co-ordinate the installation work. This work will be carried out be in-house installers or sub-contracted out to Green deal approved Independent Installers.
If the household or business decides to proceed with the suggested package of measures, they will have the option of paying some or the entire amount upfront. Alternatively, the customer can use Green Deal finance to cover some or all the cost so as the long the Golden Rule is obeyed. The interest rate and the repayment period will be determined by the Green Deal provider but the Government may place some limitations to protect future occupiers of the property. Also, the repayment period cannot exceed the expected lifetime of the measures. The customer signs the Green Deal plan binding themselves and future occupiers to make Green Deal payments through the electricity bills at that property.
Measures covered by the Green Deal
There are so far 45 measures being introduced as improvements that can be funded through the Green deal.
The measures that we at Green Energy can help you with include:
- Cavity Wall Insulation
- Heating Controls
- Loft Insulation
- Internal Wall Insulation
- External Wall Insulation
- Draught Proofing
- Floor Insulation
- Heating system insulation
- Light Fittings (LED Lighting)
- Ground and air Source Heat Pumps
- Solar Thermal
- Solar PV
If you would like to enquire about The Green Deal, please call us on 01670 828695 (Northumberland), or 01751 432096 (North Yorkshire).