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Your Guide to the Green Deal

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The coalition’s Energy Bill was introduced to Parliament on 8 December 2010, and included the provision for a "Green Deal", which has been designed to revolutionise the energy efficiency of properties in Britain.

The first scheme of its kind in the developed world, the Government plans to offer energy efficient makeovers to thousands of homes. It will see the establishment of a framework, which will enable private firms to offer consumers energy efficiency improvements including energy efficient boiler replacement, cavity wall insulation, double glazing and loft insulation to their homes, community spaces and businesses at no upfront cost. Payments would be recouped by means of a charge in instalments on energy bills.

Home Heating Guide takes a look at The Green Deal, the reasons why it is needed and summarises the Government’s proposals.

What’s The Green Deal about?

The Green Deal will enable many households and businesses to improve the energy efficiency of their properties without consuming so much energy and consequently wasting so much money. The plan would see people take out loans to have their properties made more energy efficient. Householders and businesses would pay back the loan over the course of 25 years through additional charges to their energy bills. The savings on bills will overcome the additional cost, and should people move from their home, the charge will stay with the property.

In short, The Green Deal will be a win-win situation for everyone involved; from the companies undertaking the work, to the workers who are employed to do it and the consumers who benefit from having energy efficient homes.


Why is The Green Deal necessary?

With households accounting for a quarter of the UK’s carbon emissions – with a similar figure coming from UK businesses –  existing buildings need to become far more energy efficient. The hardest to treat properties are those with solid walls, and currently only 17,500 out of the country’s 6.6 million homes are insulated each year. As a nation, the UK needs to become a lot more energy efficient in order to reduce its greenhouse gas emissions which risk dangerous climate change.

A summary of the Government’s Green Deal proposal prerequisites

1. The expected financial savings must be equal to or greater than the costs attached to the energy bill, known as "the golden rule" of The Green Deal.

2. The measures must be approved and the claimed bill savings must be those accredited through this process.

3. The measures installed must have been recommended for that property by an accredited objective advisor who has carried out an assessment.

4. The measures must be installed by an accredited installer.

5. For households, The Green Deal provider must give appropriate advice within the terms of the Consumer Credit Act, and must take account of the individual circumstance of the applicant.

6. The Green Deal Provider must have consent from the relevant parties, including the express consent of the current energy bill payer.

7. The presence of a Green Deal must be properly disclosed to subsequent bill payers (new owners and tenants) alongside energy performance information.

8. Energy suppliers must collect The Green Deal charge and pass it on within the existing regulatory safeguards for collecting energy bill payments – including protections for vulnerable consumers.

Why The Green Deal is the future of energy efficiency

With houses and business premises throwing away up to £3 billion of energy every year, due to poorly insulated properties, thermostats used inefficiently and appliances left on standby, the majority of homes and businesses are spending more on electricity and gas than they need to.

From autumn 2012, the coalition Government will introduce legislation which will make it possible for homeowners and businesses to have energy efficient measures carried out, such as cavity wall insulation and double glazing, to make your property more energy efficient.

It will be a major step forward in terms of making the UK’s energy supplies more secure, and will help households cope with ever changing energy prices. In the biggest shake up in the history of energy efficiency, it has the potential to support tens of thousands of jobs; insulation installers, manufacturers and other professionals in the chain of supply will all stand to benefit, including many small businesses.

The Green Deal offers a unique opportunity to help drive economic growth. But it will need careful government facilitation to ensure it benefits consumers. For it to work successfully, energy efficiency must be valued, companies will need to engage in the scheme and consumers will need to become interested when it comes to borrowing money and investing in making their homes energy efficient.

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