What is the Green Deal?
The Energy Act 2011 came into being on the 18th October 2011, after having received Royal Assent. It included the Green Deal, a revolutionary programme aimed at improving older buildings in the UK by making them more energy efficient. Britain has many old houses - some of the oldest in Europe - and many of these houses are draughty, poorly insulated and not very environmentally friendly. Around twenty five percent of the UK's carbon emissions are from energy lost through heating homes, with the same amount coming from heating workplaces, businesses and industry.
To help reduce this waste and lower carbon emissions, the government have launched the Green Deal. Able-to-pay home owners and bill payers will be eligible for energy efficient improvements on their dwellings without having to pay for these improvements up front. Private firms will offer the improvements, such as loft insulation, at no initial cost to the owner. Payment for the work carried out will be via a charge paid through installments on the energy bill for that property. Hence the cost of the improvements will be spread over the long term and the obligation to pay for these improvements will be passed on to future occupants if the property is ever sold or re-let. There are obviously certain criteria which need to be met; one being that costs of the improvements carried out should not be greater than the expected savings on the energy bill due to these improvements. The Green Deal also applies to non-domestic properties.
What is ECO?
The Energy Act 2011 created the ECO (Energy Company Obligation). It is to be introduced by the government because it has determined that the Green Deal will not be suitable for all consumers; namely householders who are deemed to need additional support, the majority being vulnerable people on low incomes. Due to financial hardship, this particular section of society often already ration the amount of energy they use to heat their homes, so they will need to use more energy not less (as proposed by the Green Deal) to achieve a comfortable home temperature. It is also expected that the ECO will tolerate more expensive options in houses which are deemed difficult to treat.
Green Deal and ECO Consultation
Between the 23 November 2011 and the 18 January 2012, the Department of Energy and Climate Change (DECC) asked members of the general public who may be interested in having energy saving improvements carried out on their properties, and the third parties who may be interested in offering these improvements, to study some documents about the Green Deal and ECO and to fill out a consultation. Other groups such as Sustain, the ERA (Energy Retail Association) and the AECB (the Sustainable Building Association) all gave their views and advice on the Green Deal's shortcomings.The consultation, which could be completed either online or sent via the post, was a 15 page document that consisted of 63 questions, divided into 12 chapters, and covered every aspect of the Green Deal from every angle, i.e. consumer, provider, environment.
The chapters each dealt with specific areas of the Green Deal and ECO. For example, chapter 3 was on the Green Deal provider and plan, chapter 8 was on payment collection and chapter 10 was about consumer protection. Each contained several questions and the vast majority of these required in depth answers. For example, the first question asked what people thought about the proposed requirements for assessors of the Green Deal, whether they thought that the Code of Practice was clear and robust enough to support the Green Deal Assessment. Then, question 61 in chapter 12 asked was there any "other information the government should collect to enable effective monitoring, evaluation and reporting on the performance of the Green Deal and ECO".
Outcome of the Consultation
One concern raised was how small and medium sized businesses would fare when it came to providing the work. The DECC did admit that the market could easily be dominated by a few big businesses. One option to avoid this was to have an independent Green Deal installer commissioned directly by the consumer. Another problem highlighted was with landlords. Many also repoted that they were unsure whether it would be worthwhile to become Green Deal providers. Also the question of warranties was raised, who would be liable if things went wrong? These and other issues raised will naturally have to be sorted out before the Green Deal comes into effect at the end of this year - but that was the general idea behind the consultation.