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Understanding the Green Deal
The Green Deal is a government sponsored framework, designed to pay for energy-efficiency improvements to buildings (domestic and non-domestic) but without the property owner having to pay up front.
Green Deal finance can be taken out to pay for measures such as loft, cavity or solid wall insulation (internal or external), a new boiler or even renewable 'micro-generation' systems such as solar panels. A full list of eligible energy improvement measures is available on the Department of Energy and Climate Control (DECC) website.
The main driver of the Green Deal from the Government's perspective is to reduce Carbon Dioxide emissions in the most cost effective way. By reducing energy usage, as well as saving money, we can reduce greenhouse gas emissions and slow the rate of climate change.
Forming the basis of the Green Deal arrangement is the 'golden rule' which determines how much finance can be borrowed to fund the planned improvements. The Green Deal’s Golden Rule states that the energy savings a property makes in a 25 year period (it is possible to choose a shorter period of time, but return on investment must be paid for within the time period) must be equal to or more than the cost of implementing the changes in the first place. In other words, the energy saving measure should pay for itself.
Payments for improvement measures are taken through the property's monthly electric bill. This payment remains with the property and transfers to the new owner in the event of any property sale.
The first stage in the process is for the property owner to contact an accredited Green Deal Assessor who will survey the property. During the assessment, the assessor may ask questions about the property, the number of occupants, construction method (i.e. does it have cavity walls), they should inspect the loft space, check for pipe and water cylinder insulation, type of heating system & boiler, energy efficient light bulbs, draught proofing measures etc. All of which will have an impact on energy efficiency.
The assessor will produce a Green Deal advice report. This is made up of an Energy Performance Certificate (EPC) a basic assessment of the fabric of the building, which ranks the building’s energy efficiency on a scale of A to G, and an Occupancy Assessment, which is personalised based on your own energy use.
Based on the observations and findings, the assessor may also make recommendations for energy efficient improvement measures to improve the energy efficiency and rating.
Following the assessment, a Green Deal Provider will arrange for the installation of the agreed energy efficiency measures through an authorised installer and arrange the financing with the Electricity supplier.
It is worth noting that some Green Deal Providers also offer the assessment service, this can help with continuity in dealing with a single organisation. The cost of an assessment may also vary, with some providers offering the service free, other independent assessors typically £99-£150.
For more information, visit the Green Deal section on the DECC website.