Green Deal: what does it mean?
The Green Deal is a new nationwide scheme to help householders and tenants pay for energy-saving improvements to their property. One will be able to take out Green Deal finance to pay for measures such as loft, cavity or solid wall insulation, double glazing, a new boiler or even a ‘micro-generation’ system such as solar panels.
The Green Deal is different from a standard loan, as repayments of the loan will be paid through the savings on your energy bill made from the energy-saving improvements installed. Therefore, one will not pay back more in loan repayments than you are saving on your energy bill – This assurance is known as the ‘Golden Rule’.
This loan is unique from traditional personal loans and mortgages, since it is attached to your property rather than you as an individual. This means that the loan repayments will pass on to the next owner of your house if you move.
THE FOUR STEPS: Assessment, finance, installation and repayment.
- A Green Deal assessor will carry out an assessment of your home and recommend energy-saving improvements. Such suggestions and measures will be incorporated into a Green Deal advice report.
- A Green Deal provider will then issue you with a Green Deal plan, and a quote for the improvements based on the Green Deal advice report.
- A Green Deal installer will provide and install the energy-saving home improvements agreed with the Green Deal provider in the Green Deal plan.
- Your Green Deal Loan will be paid back through the savings made on your electricity bills.
If this Deal appeals to you, the first thing to do is to arrange a visit from an assessor accredited with the Green Deal Quality Mark. All companies involved in the Green Deal must bear this mark and comply with a code of practice. Assessors are not necessarily independent from providers – they can be tied and on commission – but they must remain impartial at every step of the procedure.
Qualified assessors are able to offer you assessments from 1 October 2012. But you will not be able to take out a Green Deal finance plan until 28 January 2013.
Will it affect house prices?
The Green Deal loan is an additional charge attached to the electricity meter of your house, not to you as an individual, so if you move house the Green Deal stays with the house.
It is not know how the Green Deal will affect the property market, but there are already concerns that some prospective buyers may not be attracted to a property with a substantial Green Deal charge attached to it.
Who are the GD providers?
Any organisation can choose to be a Green Deal provider, assessor or installer, so long as they have been authorised to do so by registering and obtaining the Green Deal Quality Mark. Examples of GD Providers include:
- Ampere GDP: http://www.ampere-gdp.com/
- Anglian Home Improvements: http://www.anglianhome.co.uk/
- BritishEco: http://www.britisheco.com/incentives/the-green-deal/
- CarbonLow Group: http://www.carbonlowgreendeal.co.uk/
- Enact Energy: http://greendealpartnership.com/
- Insta Group: http://www.instagroup.co.uk/green-deal.aspx
- Keepmoat: http://www.keepmoat.com/
- Torriga Energy: http://www.toriga-energy.com/
- Yorkshire Energy Services: http://yorkshireenergyservices.co.uk/green_deal.html
Not all Green Deal Providers may be profit-making businesses. Local councils and social housing providers may decide to provide Green Deals or endorse or partner with Green Deals provided by others.
Green Deal Assessment
The Green Deal assessor will produce a Green Deal advice report which will be made up of two documents: an Energy Performance Certificate (EPC), and an Occupancy Assessment, which assesses how you use energy in your home.
EPC’s are already in use, as they have to be produced when properties are sold or rented out. An EPC is a basic assessment of the fabric of your property; it assumes how many people live in the property and how they use their heating, so it does not take into account of your actual usage or energy bills. The Occupancy Assessment is personalised to you and assesses your own energy bills.
It is the EPC that is used to decide the amount of Green Deal finance on is able to borrow.
The Green Deal Assessor
The assessor is required to carry out an ‘impartial’ assessment, but does not necessarily need to be independent from a company selling the energy-saving improvements.
Green Deal assessors will recommend improvements that are appropriate for the property. They must ensure that their recommendations meet the ‘Golden Rule’.
You are entitled to ask your assessor or provider if there is an alternative package that will deliver bigger energy savings and/or at lower cost.
A second opinion is possible, but you may have to pay for each visit from an assessor.
The Green Deal Provider
Green Deal companies are not allowed to suggest that they are recommended or approved by government, or that they are working in conjunction or association with government.
However, the Green Deal itself is backed by Government-approved standards and a code of practice giving customers protection from fraud, errors and mishaps.
A Green Deal Ombudsman has been installed to help deal with complaints, although if there are any problems, customers should initially contact their Green Deal Provider.
Warranties for Instalments?
Most Green Deal measures come with a minimum 5 year warranty and an extended 10 year guarantee to cover any building damage sustained as a result of the measures being installed.
For solid wall insulation and cavity wall insulation, Green Deal providers must offer guarantees for both the improvements and consequential building Damage for 25 years.