The Green Deal

What is the Green Deal?

There has been much talk in energy circles about the Green Deal, but what exactly is it?  Well, it’s the Government big idea to encourage householders to make their homes more energy efficient without having to pay costs up front. The energy efficiency improvements made can be paid for over 20 years or more via a charge collected and attached to their energy bill. The theory being that if you make energy efficiency improvements to your home you will save long term on your energy bills.  It is due to start towards the end of 2012, enabling households and businesses to install certain eligible energy efficiency measures financed from an approved Green Deal provider. Details of who these will be are not yet certain but it could be from a high street name such as Marks & Spencer’s, or via your electricity company.

How will the Green Deal work?

The process will start with a home visit by an accredited Green Deal assessor to offer advice on what measures would benefit the home, e.g. loft insulation, and to discuss energy usage.  If appropriate the homeowner would then be offered a Green Deal Finance plan by an approved provider.  Could be a range of providers).  A key point of the plan is that it must meet the Green Deal ‘Golden Rule’. That is that you never pay back more than you are saving on your energy bills from having the energy efficiency measure installed. For example, if you have cavity wall insulation installed and it saves you £135 per year on your energy bills, your Green Deal repayments will be less than £135 per year.  For consumer protection, there is a Green Deal code (not to be confused with the Green Cross Code!) currently being completed, which all assessors, installers and providers will have to abide by.

What happens if I sell my house or want to switch energy supplier? Green Tariffs

As the Green Deal plan is attached to the house or business premises, not the householder, the repayment will pass on to the new owner and appear on their energy bills.  Householders will be obliged to inform buyers of the existence of a Green Deal finance plan.  There has been some concern expressed that this could put of potential buyers, – but in theory they should be getting a more energy efficient home, with lower running costs,  but it might be a concern for some people.

If you switch energy suppliers, as the government is encouraging us all to do, then your existing supplier passes on details of the Green Deal finance to your new energy supplier.

What energy efficient measures are eligible for the Green Deal?

Detailed eligibility criteria is not yet known as is due to be consulted on in autumn 2011.  But the broad principles are that they are measures that are fixed to the property and “non-portable”, such as external cladding or cavity wall insulation, boilers or light fittings.  Initially, measures that generated your own electricity such as Solar PV panels, were included but this is still uncertain.