The Green Deal Scheme Outlook

The Green Deal is a flagship policy of the new Government and is scheduled for potential introduction in 2012. The idea behind the policy is to allow home owners, landlords and businesses access to energy efficiency improvement measures where they might previously have been unable to afford the measure or could not obtain a suitable grant.

Under the Green Initiative the consumer will get an Accredited Assessment, which will be an independent inspection of the property, such as found in an Energy Performance Certificate. This independent report will help to identify what energy improvement measures could be undertaken upon the property. These measures could potentially include upgrading insulation, changing the heating system and controls, and installing renewable technologies.

The Accredited Assessment will then pass the information onto an approved Deal Provider, who are certified installers for the improvement measures that are outlined on the report. It is expected that the Green Provider will analyse the list of improvements with a view to what would be permitted to qualify for the Green Deal Finance.

There is a Golden Rule that will be applied to any potential improvement before it can be approved for Green Deal Finance. This Golden Rule has two conditions, first, that the expected saving from the improvement must be equal to or greater than the projected cost of measure itself. The second is that the repayments must not go on longer than the expected life time of the improvement measure. If a measure does not meet these criteria then it will not qualify for the Deal Finance.

If a measure does not qualify for Green Deal Finance then it may still be installed provided that the consumer either pays for the measure in full or subsidises the amount to the point where the remainder could be approved under the Green Deal Finance.

The Green Deal Finance will allow the cost of the improvement measure to be spread as repayments and collected from the property Utility Bills until such time that the debt is repaid. These repayments will be taken by the Utility Provider and will be covered under the Consumer Credit Act. Because the Deal Finance is a charge against the property utility bills any future owner or tenant of the property will continue to pay the charge until the debt is paid. In this way the debt belongs to the property.

Before work can commence on the installation of an improvement measure under the Deal Finance express consent must be given by all parties with a vested interest in the property. For example, a tenant may undertake improvement works under the Deal, but must have the landlord’s permission to do so.

In this way the Green Deal aims to making energy efficiency measures available for domestic and commercial customers, to help save energy use, make the properties better insulated and to help to reduce the amount of carbon we generate.