Green Deal FAQs

What if my property doesn’t meet the golden rule?
If, for example, you have solid walls, and the cost of insulating them is too high to be paid back out of savings in your energy bill, then there are alternatives. The Government is bringing in a new Energy Company Obligation (ECO) in 2012 which will combine with the Green Deal to help with the more expensive measures. It will also focus on the most vulnerable low-income households, where people can’t currently afford to heat their house properly, and for whom energy efficiency measures will mean a warmer house rather than energy bill savings.

It will also be possible to make an upfront contribution to the cost, so that it does meet the golden rule – with the balance subject to interest and paid off over the lifetime of the measure.

Is it only for homeowners?
No it’s available in the rented sector too, both for domestic and commercial properties. Either tenants or landlords can start the process, but they must get the permission of any other parties with an interest in the property before going ahead.

Is it compulsory for landlords to improve the energy efficiency of their properties?
No. Initially the Government hopes the Green Deal will be enough incentive. But if it doesn’t prove to be, then it is proposing powers to regulate if necessary. Local authorities will be able to insist landlords of properties with F or G ratings in the EPC make energy efficiency measures that qualify for the Green Deal or ECO.

In the commercial sector it is proposing powers which require landlords to bring properties up to a defined standard (using the Green Deal or equivalent finance) before they can be re-let.

Who will provide the Green Deal?
There will be three customer-facing roles – in some cases they may all be provided by one company. In others they will all be separate.

  1. The Advisor – who assesses the energy efficiency of the property, and makes recommendations of measures that meet the golden rule.
  2. The Provider – who gives costs of measures, offers a Green Deal showing interest charges, and who manages the finance.
  3. The Installer – who installs the measures, who subsequently gets paid by the Green Deal Provider

The detail of this is yet to be pinned down, and there are likely to be a range of different models. Organisations expressing an interest in getting involved include: energy companies, high street retailers, small energy efficiency companies, builders merchants, housing associations, local authorities and others.

From where does the money come?
A range of financial institutions and high street retailers.

Are the Green Deal Advisors independent?
Some advisors will be totally independent, others will be employed by Green Deal Providers and part of their job will be to sell the recommended improvements once they have done an assessment.

All advisors are obliged to tell customers whether they are independent or tied to a provider, and how much they are paid (including commissions) for doing an assessment. They will also have to get your consent to offer any additional services being (such as sales or indicative Green Deal quotes) before they visit your property. (Warm Wales is currently registering to become a Green Deal Advisor Organisation and, for certain works may offer measures as a Green Deal Provider)

There are also safeguards in place to ensure that the Green Deal Assessment is impartial. It uses a standard methodology, which is independently quality assured. There is a code of practice that sets out the requirements placed on assessors to make sure that the assessment and any advice that follows is impartial, and sanctions that will apply if the requirements aren’t complied with.

It is likely two routes to getting Green Deal advice will develop, which are similar to those for financial advice. You can get free advice – where the advisor is paid on commission (or the Green Deal Provider bears the cost as a loss leader in the hope that you will go on to use its services). Alternatively you can use an independent advisor and pay an upfront fee for the advice.

Will there be a lot of door knocking and cold calls as a result of the Green Deal?
Cold calling will be allowed – to allow “people who might not otherwise be reached to be made aware of the opportunities to benefit from the Green Deal”.

DECC thinks that the current legislation on doorstep selling “if applied properly … should protect consumers from pressure sales tactics whilst allowing an effective market to flourish”.

The one concession it has made to concerns raised in the consultation, is that cold callers will not be allowed to carry out a Green Deal assessment on the day they cold call, unless requested by the customer and written consent is obtained. Otherwise a cooling off period of at least one day applies. Green Deal participants must respect no cold call requests, whether face to face, by phone, electronic communication, or if “no cold call” stickers are displayed.

What terms will the Green Deal charge be on?
Green Deal finance will be at a fixed rate of interest in the domestic sector (6.96% plus charges). However, Green Deal Providers will have the option to increase the whole charge by 2% per year (in line with the Bank of England’s inflation target). This will “allow providers and customers to capitalise on some of the expected increase in savings due to expected fuel price inflation”.

Warranties and guarantees
Green Deal Providers must offer a minimum five year guarantee in respect of improvements made, and an extended 10 year guarantee( perhaps at extra cost ) to cover any consequential building damage as a result of the measures being installed (25 years for solid wall and cavity wall insulation).

Can I pay the Green Deal charge off early?
Yes, but we don’t know yet whether there will be a financial penalty for doing so.

Will renewable energy measures be included?
Yes, but they will not meet the golden rule. However, the Green Deal can be used to pay for part of the installation cost, based on the estimated energy saving for each technology.

Can I use income from FITs of RHI incentive payments with the Green Deal?

If you are installing renewable energy measures, income from the feed-in tariff FIT) and renewable heat incentive (RHI) cannot be counted as energy bill savings for the purpose of meeting the golden rule.