The Green Deal was one of the government’s flagship energy efficiency schemes that did not take off as expected and as the industry thought the scheme was dying off it has been revived through private investors.
What is the Green Deal?
The Green Deal is an energy efficiency scheme designed to help homeowners to pay for energy improvement measures in their homes at no upfront cost. The scheme’s aim was to enable homeowners to use their energy bill savings to pay for the monthly repayments for the energy efficiency measures.
The Green Deal repayment is added to the homeowner’s electricity bill and it remains on the property as it’s the property that gains the measure not the person once they have moved out.
The guiding principle behind the Green Deal is that the finances should meet the ‘Golden Rule’ which is where the monthly repayment for the energy efficiency measures installed should not exceed the savings that could be achieved in the first year of the loan.
The scheme offered a wide range of energy efficiency improvement measures include, insulation, heating, draught-proofing, double glazing, and renewable energy systems.
In 2015 the scheme was stopped but it has been relaunched with loans available again from May 2017. The relaunched Green Deal scheme is now funded through private investment.
What Can the Green Deal Offer Now?
The Green Deal has now re-opened with a smaller range of measures available than before, but it includes heating, insulation, and renewables.
The range of energy efficiency measures will be extended in the future.
You can currently get a Green Deal loans and financing for:
- New or replacement boiler
- Biomass boiler
- Solid wall insulation (internal or external)
- Cavity wall insulation
- Loft insulation
- Floor insulation
- Controls for heating, hot water or lighting
- Ground and air source heat pumps
- Fan assisted storage heaters
- Flue gas recovery devices
- Innovative hot water systems such as waste water heat recovery systems
- Draught proofing
- Double glazing
To be eligible for the Green Deal you will need to use a Green Deal approved installer or provider.
Why Did the Green Deal Stop?
The Green Deal loan was attached to the home, not the person applying for the home, which made the Green Deal unattractive as it was viewed that it would make the home harder to sell.
The Green Deal also did not work for all homes as low users of energy often could not make the savings required to balance out the repayment amounts.
In 2015 the government stopped the Green Deal scheme as the take up was low with only 15,000 Green Deal loans been funded since its launch in 2013.
How Has the Green Deal Altered?
The Green Deal has not changed very much, and it works on the same principles that the homeowner pays for the energy efficiency measures through the energy bill savings.
Some of the finer details have changed such as the loan APR has increased, and the duration of the loan period is now restricted to the anticipated lifetime of the energy efficiency measure.
The same customer protections and regulations will still apply, and the industry bodies will still manage the issues that arise from the scheme, such as the Energy Ombudsman and Trading Standards.
Who is the Green Deal Available to?
The Green Deal is available to homeowners, landlords, and tenants.
Landlords can have energy efficiency measures installed under the Green Deal in their properties with the consent of the existing tenant as the tenant will be the person who repays the loan as they pay the electricity bill.
All new tenants must be informed of the Green Deal repayment on the property.
Tenants might want to have the Green Deal as they will benefit from the energy efficiency savings, and they may struggle to get their landlord to pay for energy efficiency improvements. The landlord will have to give consent as they are the property owner and they will need to rent the property out again in the future with a possible Green Deal finance on it.
Is the Green Deal Right for Me?
Whether the Green Deal is right for you will depend on your circumstances and if there are other schemes that offer energy efficiency measures that are more suitable.
Before applying for the Green Deal, it is worth investigating if you are eligible for energy efficiency measures through the Energy Company Obligation (ECO) scheme. The ECO scheme has eligibility criteria which are largely benefit related.
If you are a tenant or landlord, you should be aware that from 1 April 2018 all new lets and tenancy renewals have to meet a minimum energy efficiency rating of E on their Energy Performance Certificate (EPC). All existing tenancies will need to meet this requirement by 1 April 2020.
How Do I Apply for the Green Deal?
If you are interested in the Green Deal you should contact the Green Deal Provider or the Green Finance Company with which energy efficiency improvements, you are interested in.
They will arrange for an assessor to visit your home to assess the suitability of your property for the energy efficiency products you are interested in and discuss the impact that those measures will have on your home.
The Green Deal Provider will also arrange for the installation of the energy efficiency improvements and put the finance agreement in place with the Green Deal Finance Company, to make sure you get funding.
Can I Get Advice on the Green Deal?
You can also discuss the Green Deal with a Green Deal assessor or provider.
Who is the Green Deal Finance Company?
The Green Deal Finance Company is the company behind the Green Deal who is responsible for setting up, financing and administering Green Deal loans. It is a privately-owned consumer credit company.
The Green Deal Finance Company works with the Green Deal Providers so that they can offer Green Deal finance to their customers on behalf of them.
They currently manage over 12,500 loans and have started offering Green Deal funded loans once again after private investors took over the scheme.
Do the Changes in the Green Deal Affect Existing Participants?
Those who previously signed up to the Green Deal will not be impacted by the change in the scheme. If there are any questions about the Green Deal loan, financing or funding that you have, you should contact the Green Deal Provider.