In 5 Steps – What the Green Deal Means to You

In 5 Steps – What the Green Deal Means to You

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Posted in Government Action

The Green Deal was officially launched on Monday 28th January.

The Green Deal is a government initiative designed to help people make their homes more energy efficient at no upfront cost. The Green Deal has been set up by the Government to help improve energy efficiency of homes and buildings. The scheme allows private companies to offer you energy saving improvements at no upfront cost. It is based on a ‘Pay As You Save’ (PAYS) principle where you pay back the cost of your home energy saving improvements over time, using the savings you make on your energy bills.

Green Deal finance will only be available where the energy saving improvement you want to install, and the amount of finance you need to do it, meets the ‘Golden Rule’. The Golden Rule states that repayments on the finance should not be greater than the savings the improvement makes to your household energy bills. This means that a Green Deal customer should not be out of pocket for the improvements but they will have a warmer, more energy efficient home.

Forty five energy saving measures are eligible for finance through the Green Deal. This includes solid and cavity wall insulation, loft and room in roof insulation which helps reduce heating bills, and others measures such as low energy lighting which helps reduce electricity bills. There will be funding available from energy companies towards some expensive measures, such as solid wall insulation, through the Energy Company Obligation (ECO), making them affordable through the Green Deal.

The Energy Company Obligation (ECO)

The Energy Company Obligation (ECO) is a requirement on the six main energy suppliers in the UK to fund works that reduces the amount of carbon dioxide (CO2) produced in the homes of their domestic customers and thereby helps to reduce their fuel bills.

There are two elements of the ECO:
– Carbon Saving (which includes the Carbon Saving Communities obligation) and
– Affordable Warmth.

Green Deal in 5 steps

1 Commission a home energy assessment by an Accredited Green Deal Assessor

2 Green Deal Assessor will produce Green Deal Advice Report using estimated costs

3 A Green Deal Provider will arrange for the proposals to be costed (3 quotes will be necessary for schemes costing more than £10,000) and will produce a Green Deal Plan which will set out the proposals and the financing they will provide taking into account the Golden Rule (see below)

Where this is not the case (i.e. improvements would not meet the Golden Rule), the Energy Company Obligation, or ECO, will provide funding for some householders to help with the cost of the more expensive improvements such as solid wall insulation.

4 The owner/tenant/landlord chooses an accredited Green Deal installer to carry out the works. After the works are completed, a new Energy Performance Certificate (EPC) is issued by the Green Deal Provider.

5 Pay back cost via energy bill (or you should be able to pay for all or part of the improvements up front)

The Golden Rule

Green Deal finance will only be available where the energy saving improvement you would like to make to your home and the amount of finance you require to do this meets the ‘Golden Rule’. This states that the repayments on the finance should not be greater than the savings the improvement makes to your household energy bills. This means that a Green Deal customer should not be out of pocket for the improvements and have a warmer, more energy efficient home. The charge is tied to the electricity meter at the property not the householder – so you only pay towards the cost of the energy saving measures whilst you are benefitting. This is a link to the government web site which provides further information and links:

Green Deal: energy saving for your home or business:  https://www.gov.uk/green-deal-energy-saving-measures

Stretton Climate Care and The Green Deal

Stretton Climate Care has not at present set up any introductory arrangements for this scheme. We recognise the potential benefits of the Green Deal and ECO in that they have potential to support the improvement of the energy efficiency of many properties that could not be assisted under previous schemes. In particular, for example, there will be ECO funding in many cases for the insulation of solid walls, difficult to treat cavity walls and rooms in roofs. Further support is also available for households with someone on qualifying benefit payments through the ECO for Affordable Warmth and potentially through the ECO carbon savings Community Obligation.

It is early days for this scheme and Stretton Climate Care will be assessing what will be a suitable approach for us to take in advising our local community.
We will be assessing proposals which are being developed by the Principal Councils in the Marches with the Marches Energy Agency and seeing what funding will be made available to support the carrying out of Green Deal Assessments.

If you are considering entering through the Green Deal process at present, you are recommended to ensure that you only use officially accredited individuals and bodies and ensure that they understand all the options that will become available through the scheme. We will update this advice as the scheme develops.

This Note and advice has been prepared by Stretton Climate Care as its best understanding and summary of what is a complex and untried scheme with which we currently have no experience or special knowledge. In these circumstances, it is recommended that anyone considering entering the Green Deal process should carry out their own analysis of the scheme so that they can understand how it may affect their circumstances.