What is  The Green Deal?

Put simply, the Government is establishing a framework via The Department of Energy and Climate Change to enable private firms to offer consumers energy efficiency improvements to their homes at no upfront cost and recoup payments through a charge in instalments on the electricity bill.

At  the heart of the Government’s proposals is the Green Deal Plan , an innovative financing mechanism which allows consumers to pay back through their energy bills. This means consumers can see the Green Deal charge alongside reductions in energy use which generate savings on their bill. It also means that if they move out and cease to be the bill payer at that property, the financial obligation doesn’t move with them but moves to the next bill payer: the charge is only paid whilst the benefits are enjoyed. In this way, the Green Deal differs from existing lending – it is not a conventional loan since the bill payer is not liable for the full capital cost of the measures, only the charges due whilst they are the bill payer. This is a market mechanism, funded by private capital which will deliver far more to consumers than any sort of top-down Government programme.

There are a number of important consumer protections which will be embedded into the Green Deal including –

1. The expected financial savings must be equal to or greater than the costs attached to   the energy bill, known as ‘the golden rule’.
2. The measures must be approved and the claimed bill savings must be those accredited through this process.
3. The measures installed must have been recommended for that property by an accredited Green Deal Advisor.
4. The measures must be installed by an accredited installer.
5. For households, the Green Deal provider must give appropriate advise within the terms of the Consumer Credit Act and take account of the individual circumstances of the applicant.
6. The Green Deal provider must have consent from the relevant parties, including the press consent of the current energy bill payer.
7.  The presence of a Green Deal must be properly disclosed to subsequent bill payers (eg new owners or tenants) alongside  information from the Energy Performance Certificate.
8.  Energy suppliers must collect the Green Deal charge and pass it on within the existing regulatory safeguards for collecting energy bill payments, including protections for vulnerable consumers.

Full details of the type of work that can be carried out is still being decided by Government. A second bill will be passed this spring ( 2012) and the proposed implementation date is October 2012. Assured Home Inspections will be instrumental in providing the Accredited Assessment and providing independent advice and recommendations to the consumer.