The Green Deal is an innovative, government-backed initiative which helps meet the upfront cost of making energy saving improvements to homes and business. Expected energy savings, over the lifetime of the products, are then used to pay back the loan through electricity bills.
How the Green Deal works
The Green Deal process has four stages:
This is carried out in your home or business premises by a Green Deal Advisor, They will:
- use standardised software to identify what energy efficiency or micro-generation improvements you can make and what the financial savings would be.
- outline how the payments will work.
- identify which energy efficiency improvements are likely to be cost effective.
- produce a Green Deal Advice Report (GDAR) outlining your options.
We identify the most appropriate energy saving or micro-generation measures for you
Once our Green Deal Advisor has given you your report, we can arrange for our approved network of Green Deal Providers to provide quotes to fund the improvements, utilising Green Deal Finance. If you decide to take up a Green Deal offer you will then sign a Green Deal Plan, which is a contract between you and the Green Deal Provider.
You pay back the cost of the improvements over time through your electricity bill. Your electricity supplier will pass your payments on to your Green Deal Provider. The amount you pay back will be no more than a typical household will save on heating bills, so you are likely to be better off overall from day one.
Although the cost of the improvements is repaid, this is not a conventional personal loan as the charge is attached to the electricity meter in your house and paid back through your electricity bill. If you move out, the new occupant will pick up the charge while also benefiting from a more energy-efficient property.
Interest will be charged on these payments, but the rate will be fixed and you will be shown a full schedule of all the payments before you sign up to the plan. It is up to the Green Deal Providers to decide on the interest rate, so we will help you shop around to find the best deal. You will be able to pay off the plan early if you choose, though the Provider may charge a fee for this.
- We manage your installation to completion including any subsequent aftercare.
- Green Deal Approved Energy Efficiency Measures
- Measures that currently qualify for Green Deal Finance are:
- External Wall Insulation
- Internal Wall Insulation
- a condensing gas boiler on mains gas
- Solar PV
- double or triple glazing as a replacement for single glazing
- secondary glazing
- energy efficient replacement external doors
- cavity wall insulation
- Loft Insulation
- floor insulation
- flat-roof insulation
- insulation for a room in the roof
- a replacement warm air unit
- fan-assisted storage heaters
- a waste water heat recovery system
Are there guarantees that savings will be achieved and the Golden Rule will be met?
No, but the savings estimates used by Green Deal Providers to calculate the amount of finance they can offer a customer will be reduced by a set percentage (called an ‘in-use factor’). This approach was also taken in the CERT Scheme. The in-use factors have been recommended by a team of experts and are different for each measure.
Is there a cap on the amount of Green Deal finance available?
No, there is no cap on the amount of finance a customer can receive through Green Deal, but the total amount available will be limited by the Golden Rule.
Can Green Deal be used with Feed-in Tariffs or the Renewable Heat Incentive?
Green Deal packages can include energy efficiency, renewable heat and energy generation products together. However, you will not be able to use expected income from the Feed-in Tariff, for example, to help you meet the Golden Rule.
Renewable Heat Incentive payments will be conditional on making ‘Green Deal-able’ thermal efficiency improvements to the property, so that renewable heat is not wasted.
What protection is being put in place for consumers?
The government has put in place a range of consumer protections including:
- new accreditation and standards so customers can have confidence in those authorised under the Green Deal.
- strengthening cold-calling protections by introducing a cooling-off period of one day.
- only allowing cross-selling of products where the customer has agreed to this in advance.
- ensuring that assessors outline any commission they receive or ties they have to Green Deal Providers and disclose when they are moving from the impartial assessment stage to a sale.
- making Green Deal Providers offer minimum periods of mandatory cover: five years for warranties, 10 years for building damage cover and 25 years for cavity or solid wall insulation.
- Comfort that the Golden Rule has to be met in all instances.
Can customers on pre-payment meters take out a Green Deal Plan?
Yes. However, the current design of prepayment meters does not allow for the collection of the Green Deal payment as a standing charge, therefore the charge will be collected in the same way as arrears are collected.
Can customers that take out a Green Deal Plan still switch energy supplier?
Yes, providing that the new supplier is participating in the Green Deal payment collection mechanism.