The Green Deal is an innovative financing mechanism that lets people pay
for energy-efficiency improvements through savings on their energy
bills.
How the Green Deal works
The Green Deal process has four stages:
Assessment
This is carried out in your home or business premises by a Green Deal Advisor or Assessor. They will:
- use standardised software to identify what energy efficiency or microgeneration improvements you can make and what the financial savings would be
- outline how the payments will work
- identify which improvements are likely to be cost effective
- produce a Green Deal advice report outlining your options
- declare any links they have with Green Deal Providers.
Finance
Once
the Green Deal Advisor has given you your report, you can take it to
one or more Green Deal Providers who can arrange and fund the
improvements. 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.
Installation
The Green Deal Provider will arrange for a
Green Deal installer
to come and carry out the work you have agreed to. The installer will
have been vetted to ensure they meet the standards set out for the Green
Deal.
Repayment
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 it will be worth shopping 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.
Details of the Green Deal
What improvements will the Green Deal cover?
There are 45 measures or areas of home improvement approved to receive funding under the Green Deal, covering:
- insulation
- heating and hot water
- glazing
- microgeneration (generating your own energy).
For the non-domestic sector lighting, mechanical ventilation and heat
recovery measures can also be covered. More areas may be added as
technology develops.
Incentives to kick-start the Green Deal
The Government have recently launched the
Green Deal Cashback Scheme,
an incentive to encourage people to make improvements during the early
days of the Green Deal. Eligible customers will receive cashback
payments once they have measures installed, with the highest rates going
to the earliest applicants.
