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How Does the Green Deal Work?

The Green Deal is an initiative of the Department for Energy and Climate Change. It helps householders make energy efficiency improvements to their homes at little or no upfront cost.

Modifications to your property made under the Green Deal might include replacing an inefficient boiler or adding insulation to walls.

The requirement for Green Deal funding is that the cost of the improvements does not exceed the energy savings that are estimated as a result of those improvements - often referred to as the Golden Rule.

The Green Deal is essentially a loan that is made to the property, not to the householder, and that is paid back through the property’s electricity bill. If you move before the term of the loan has expired then the new bill payers assume responsibility for making repayments.

Benefits of the Green Deal to Householders

Improvements made under the Green Deal are designed to bring your energy bills down by at least as much as the loan repayments - so you’re likely to save money on heating your home*.

You’ll probably also find that your home feels warmer and less prone to draught.

With Green Deal financing you won’t have to pay the cost of these improvements up front and - since the loan is attached to the property, not you - you won’t have to undergo any credit checks or other financially invasive procedures.

*The estimates for how much you’ll save are made using typical energy consumption figures. If your energy consumption is particularly low you might not see savings which cover the cost of the repayments.

Applying for the Green Deal Step by Step

Step 1: Get a Green Deal Assessment done
A Green Deal Advisor, or GDA, will rate your home for energy efficiency, suggest improvements, tell you how much those improvements are likely to save you and let you know which ones are available to you under the Green Deal. The GDA will set out the cost of improvements, repayment terms etc in a Green Deal Plan.

Step 2: Compare Green Deal Providers
Some Green Deal Providers operate nationally whilst others are local tradespeople associated with larger Green Deal Providers. Different Green Deal Providers will give different quotes for the recommended works - the difference in these quotes will affect how much you pay back. Once you’ve found a quote that you’re happy with you can agree to the quote and sign the Green Deal Plan.

Step 3: Get the work done
The Green Deal Provider will carry out the work in accordance with Green Deal quality and service guidelines.

Step 4: Make repayments via your electricity bill
Once the work has been carried out your energy provider will be informed of the details of your Green Deal Plan and start to add the cost of repayments to your electricity bill. Since most of the improvements available under the Green Deal bring down the cost of heating your home you’ll likely see a reduction in your Gas bill to offset these repayments. (Repayments are taken through the electricity bill because every home has one)

Step 5: Stop making repayments when the Green Deal expires or when you move home
Your electricity provider will continue to take repayments until the loan is paid off. You’ll get a Consumer Credit Statement each year telling you how much you’ve paid, including interest, and your outstanding balance. When you move, just let your energy provider know as normal and they’ll arrange for the Green Deal repayments to transfer to the new occupants.

Apply Early to Avoid Disappointment

The Green Deal goes live on January 28th 2013. It’s unclear how much demand there’s going to be so it’s wise to get your assessment done as soon as possible.