The Green Deal - I & R Energy Assessors
Find out more about The Green Deal
Under the Green Deal, the loan that is taken to make the relevant improvements will be lodged against the property and not the occupier. Repayments will be added to the property’s electricity bill as an additional charge in the similar way that a standing charge would work. The Charge will be paid by whoever pays the current electricity bill, this could be subsequent owners of the property or tenants.
This mechanism breaks down two of the barriers to installing energy efficiency works:
1. Homeowners who are reluctant to install additions to the property which have payback time longer than they expect to own the property.
2. The split incentive with landlords reluctant to install energy efficiency upgrades which would benefit their tenants.
The Department of Environment and Climate Change (DECC) has published a list of energy efficiency upgrades that can be installed and funded through the Green Deal charge. These items consist of boiler upgrades, heating controls, double glazing and insulation (including solid wall insulation).
To take advantage of the Green Deal you will have to have your home/property assessed by an accredited Green Deal Assessor (GDA) who will produce a Green Deal Report. A GDA may be an independent assessor or they may be employed or contracted to a Green Deal Provider (GDP). The Green Deal Provider will possibly be an
To protect consumers against the
The Golden Rule
Under the Golden Rule, the cost of loan repayments is required not to exceed the deemed savings on the energy bills. The savings will be calculated using a software package which will use Government approved algorithms. Even so, saving will not be guaranteed. The theory is that the person who is paying the bills will always save more than they have or will be paying. However, This will be based on a set of standard occupancy and standard heating patterns which may not match the actual energy use.
Where a product does not meet the Golden Rule even with the full 25 year loan period, the customer has the option of paying some money in advance to reduce the cost of the improvements and only applying a charge of the part of the cost if the measure up to the point where it breaches the Golden Rule.
Certain measures such as solid wall insulation will get a heavy subsidy from energy suppliers under the new Energy Company Obligation, reducing the cost to a level that will meet the required Golden Rule. It will be worth bearing that in mind, with energy bills rising at the above rate of inflation annually, meaning that savings are small now, are likely to become more and more significant year on year, with loan repayments staying fixed and costing less in real terms.
Going Ahead with a Green Deal package.
Once you have your Green Deal report with your improvement recommendations you can then shop around for multiple quotes for the work, or allow the GDP to manage the whole process from start to finish. It will be your responsibility to ensure that all the relevant permissions are secured, including things like planning permission or in the case of rented property, the tenant’s or landlord’s approval to have the Green Deal charge added to their electricity bill. If you fail to get these permissions could invalidate the Green Deal packages and leave you footing the entire cost of improvements in one go.
Once the contract has been signed with the GDP, the Green Deal charge is centrally registered. This will ensure that, regardless of who supplies the electricity to the property, the charge will be added to the bill and the money passed over to the GDP. The Green Deal charge must then be notified in writing to any new tenant or owner of the property as part of the conveyancing process or again the costs could entirely fall back onto you.