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How Will the Green Deal Work

History of the Green Deal

The foundations for the government's Green Deal, announced in the 2011 Energy Act, were laid in the 2008 Climate Change Act when the UK made a commitment to reduce CO2 emissions within 40 years by an optimistic 80%.

The £14 billion Green Deal initiative, due for launch in Autumn 2012, is aimed at insulating all British homes within the next 20 years, bringing the entire housing stock, both privately owned or in the rental sector, up to the highest standards of energy efficiency.

Even new-build properties will, by 2016, have to conform to a zero carbon emission rating in net terms; a compliance which the government has estimated could add as much as £40,000 to the building costs of each new property.

How will The Green Deal Work?

Householders wishing to take advantage of the Green Deal initiative will initially be required to contact a government approved accredited assessor who will visit the property and evaluate the current rate of energy use and any existing efficiency measures already in place. A report will then be passed to one of the GDPs (Green Deal providers) who have signed up to the scheme.

They will compile a package of energy saving strategies relevant to the consumer's needs and make arrangements for the improvements to be carried out by one of a body of accredited installation specialists. It will also be the responsibility of the GDP to advise the householder's energy supplier of the energy saving measures made, in order that they can amend their records and add the Green Deal costs to their energy bill.

The EPC (Energy Performance Certificate) register will also be updated at this time to ensure that the property's energy efficiency rating has been improved; measures which will further assist in proving the UK's compliance to our CO2 emissions reduction commitment.

Consumers and 'The Golden Rule'

Once the householder has paid the Green Deal charge levied on their bill, their energy supplier will repay the amount to the GDP. When the total costs of the improvements have been met, the charge will no longer be applied to the consumer's bill.

The government's inclusion of the Golden Rule to the Green Deal initiative ensures that certain conditions must be met to guarantee the viability of inclusion to the scheme. They have stated that "the expected financial savings must be equal to or greater than the costs attached to the energy bill".

Compliance should mean that none of the involved parties; the consumer, Green Deal provider, the installation specialists or the energy supplier will be left financially disadvantaged by participation in the scheme. The initiative has also been structured so that the financial commitment is attached to the property, rather than the householder.

Homeowners who sell their properties, or tenants of rental properties who relocate, will no longer be obligated once they have moved, responsibility being transferred to the new occupants.