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The Green Deal will enable householders to invest in energy efficiency improvements to their homes, at no upfront cost, that will pay for themselves through savings on their energy bills. The money to pay for the improvements will be borrowed from a Green Deal provider who will arrange for the measures to be installed. It is expected that the repayments plus reduced energy bills will always be lower than energy bills were before installation of the measures.
The finance will be tied to the property rather than the householder and repayments will be made via the householder’s energy bill.
Overview
The implementation date of the Green Deal passed us on 1st October 2012, and as the scheme becomes ever more prevalent, you are likely to be bombarded with ever more information relating to the scheme from training providers, accreditation schemes, government bodies and the like. Practicing energy assessors are likely to play a large role in the introduction of the Green Deal.
The government’s scheme requiring a significant number of assessors to be trained and to become Green Deal Advisors, having carried out the official training qualification that was launched earlier in the summer. With this in mind, it is important that assessors have a good understanding of what the Green Deal is, why it has been implemented, and how the government foresees it working in practice. Let’s look at this now……
What is it?
The Green Deal is the government’s flagship energy saving programme, which will enable homeowners, tenants and landlords to upgrade the thermal properties of their buildings at no upfront cost, and then use the subsequent reduced energy bills to offset the payback of the work completed.
Why is it needed?
The U.K. government has various international carbon and energy reduction agreements which it is required to meet or else face possible recriminations. U.K. building stock is responsible for a significant level of the country’s energy usage and carbon emissions, and any improvements will go some way to helping the U.K. meet its targets.
How will it work?
A typical scenario of the Green Deal working in practice would be this:
A homeowner is made aware of the Green Deal, and feels that this is something they would like to look into in order to upgrade the energy performance of their building. The homeowner commissions a Green Deal Advisor to complete an assessment of the property, and the assessor compiles an assessment report which includes detailed information relating to the make-up of the property, how it is used, and specific recommendations which can be implemented to help achieve cost savings.
In addition to the recommendations, the advice report includes information relating to the cost of potential implementation measures, what the predicted savings would typically be, and details of Green Deal Providers that the homeowner can contact to carry out the work. Once the homeowner has decided which measures they would like to be implemented, they would contact the Green Deal Provider who would go ahead and install the desired measures.
The important bit is this – there are ZERO upfront costs to the homeowner. The homeowner puts in place an agreement with the Provider whereby a certain amount is regularly paid back over a set period – say £15 a month over 25 years (dependent upon the cost of the measures) to cover the installation costs of the Provider. However, as a result of the installed measures, the homeowner enjoys a resulting £20 saving on the energy bills each month, thereby fully offsetting the cost of the payments to the provider. The homeowner has therefore enjoyed a ‘free’ installation, upgraded the quality of the property, and paid no more bills than they would otherwise have been doing.
