Green Deal – what is it and what does it mean for home owners and businesses?

For those of you who stay close to news and updates from the Department of Energy and Climate Change (DECC) you may already know about a new scheme that will come into effect from 1st October this year called Green Deal. 

“The Green Deal will be the biggest home energy improvement programme of modern times” – Greg Barker, Minister for Energy & Climate Change

Green Deal is all about energy efficiency in homes and businesses and will enable you to make energy saving improvements to your property for no up front cost.  There are 45 energy saving measures covered by the scheme.  Areas include:

  • Heating, Ventilation and Air Conditioning e.g. condensing boilers
  • Building Fabric e.g. cavity wall and loft insulation
  • Lighting e.g. low energy fittings and controls
  • Micro-generation e.g. Solar thermal panels (hot water) and Solar photovoltaic panels (electricity)

In simple terms, a Green Deal provider can lend you part or all of the cost of installing one or more of the listed measures.  The debt will be attached to your property’s electricity meter, not you.  The measures will only be agreed if they meet a golden rule – the savings made on your energy bills must cover the repayments on the loan.  The loan is recovered over a period of 25 years or less via a charge on your electricity bill.  If you move, the debt stays with the property’s electricity bill. 

If a measure doesn’t meet the golden rule, you may still be able to benefit if you contribute to the cost of the measure(s).  So for example, a Solar PV system is unlikely to meet the Golden Rule as monthly savings would not cover the cost of the loan but if you were able to cover part of the cost, it may become viable. 

However, there are certain measures that will need to be in place before micro-generation technologies are considered.  The process will start with a Green Deal Assessment (free to you) which will look at the current energy performance of the property.  A Green Deal Advisor will make recommendations as to which energy savings measures should be the priority.  If you don’t have adequate insulation, it is likely that this will be top of the list.

It is also worth noting that if you use Green Deal finance to install micro-generation technology such as Solar panels, you cannot claim the feed-in tariff as well.  As feed-in tariffs reduce over time, this will become less of an issue.  With ever increasing energy bills, for some, the ability to generate their own free electrcicty may be more important that receiving an income from their solar system.

Once the final process has been published and we have a better understanding of how Green Deal works for Solar technology, we will post another update.  Morgans Solar has registered its interest in becoming an approved Green Deal Installer so watch this space!