Introduction to the Green Deal
The Green Deal is a finance mechanism to enable people to make improvements to the energy efficiency of their house without having to bear the up-front cost.
At the heart of the Green Deal is the ‘golden rule': as long as the expected financial savings in lower energy bills are equal to or greater than the costs of the energy efficiency measures installed, you are eligible.
The loan to cover installation costs will be in the form of a charge on the property. It will be repaid over a period from 10 to 25 years (depending on what measures are installed) through the property’s electricity bill. (The rate is 6.96% and there is a £63 sign-up charge and a £20 service charge per year of the loan).
DECC has put aside £125m to incentivise early take up with a Green Deal Cashback scheme e.g. external wall insulation attracts £650 and boilers £310 cash-back. This is available for all people who install relevant energy efficiency measures, whether or not you use the Green Deal finance, as long as you have a Green Deal assessment and get and agree quotes through a Green Deal Provider.
How the Green Deal works
- An accredited Green Deal Advisor will assess the energy efficiency of the building, using a system that is based on an improved energy performance certificate (EPC). They will draw up a list of measures that can be taken to improve the energy efficiency and indicate which ones meet the golden rule. They can be independent, or tied to a Green Deal Provider – but must declare any business arrangement and their fee and must first give impartial advice – like a mortgage broker.
- Domestic properties will also get a Green Deal occupancy assessment, which will look at your current energy use, and how that varies from the national average (which is what is used in the EPC calculations). If your use is higher than average you will benefit more than calculated by the golden rule; and if your energy use is lower than average, you will see less benefit. Green Deal assessments for non-domestic properties will automatically take current energy use into consideration.
- You can then invite Green Deal Providers to give you quotes for any of the improvements mentioned on the report that you would like to go ahead with. If you are applying for a Green Deal plan of £10,000 or more, you must get at least three quotes. (Even if you are not, it makes sense to get three quotes as different providers will offer different products and approaches – Warm Wales can arrange this for you, for a small fee).
- If you wish to install measures that don’t meet the golden rule you can use the Green Deal up to the level of estimated savings, and pay the rest yourself.
- Your chosen supplier(s) installs the measures.
- The Green Deal Provider arranges for the repayments to be taken through a charge on your energy bill. This charge stays with the property, funded by energy savings that would otherwise have been incurred, until such time as paid off.
For more information:
If you need further information on your Green Deal options, you can speak to the Energy Saving Advice Service on 0300 123 1234. Alternatively, if you need to find out if you can qualify for a grant for your home improvements, then please contact Warm Wales Cymru Gynnes on 01656 747 622 or firstname.lastname@example.org