What is the Green Deal?
The Green Deal is a new initiative which aims to encourage people to make their homes more energy efficient in an affordable way.The scheme will be available to home owners and tenants (with the consent of their landlords) and has also been extended to businesses.
The Green Deal will provide access to a finance package of up to £10,000 for recommended energy efficient home improvements. A home assessment will be undertaken by a Green Deal assessor who will create a report recommending the best improvements to minimise the utility bills in your home. If you are interested, you will be able to choose a Green Deal provider who will offer you a quote for a Green Deal Plan and access to the finance. The financial package is not a loan. It is attached to your property rather than you, so it will not be means tested and you will not need to undergo any credit checks. The idea behind this is that the government wish to make the scheme available to as many people as possible.
The Golden Rule of the Green Deal
In order to have any improvements fitted, they must be eligible under the Green Deal and recommended for your house following your home assessment. These measures will be expected to be able to show real savings over the repayment period. This is the Golden Rule of the Green Deal which states that the expected savings made from the home improvement must be the same or greater than the total cost of implementing the improvement itself. This rule protects the property owner, ensuring that they are not paying back more money as a result of the Green Deal scheme than they are actually saving on their energy bills.
Once the home improvements have been fitted, the Green Deal will be paid back in installments attached to the utility bill. The repayments will be affordable to everyone as they will be based on the savings made by the household as a result of the new home improvements.
In order for the home improvements to be beneficial, the Golden Rule states that you should not be paying more money on your repayments than you are saving on your utility bill. For example, if you have had new insulation fitted, and this gives you a saving of £22 on your heating bill each month, then you will be expected to pay less than £22 on your repayments.
Additionally, the length of time for the repayments should not exceed the expected lifetime of the home improvements itself. For example, if solar panels were to be installed and they have an expected lifespan of 30 years, then the repayments should not last any longer than 30 years.
Ultimately, the Green Deal is designed to protect the property owner and acts as the basis of the scheme.
What will I Achieve from the Green Deal?
The Green Deal will help you choose more energy efficient options for your house with no upfront cost from yourself. The Green Deal will also help you further reduce your energy consumption by providing advice and help on changing behaviour and helping to maximise the benefits of the newly installed devices which will help lower the bills.