Dec 12

The Green Deal

The Green Deal is a new Government scheme launched by the DECC (Department of Energy and Climate Change). Increasingly estate agents and property professionals are getting more and more questions on this topic. The aim of the scheme is to improve the energy efficiency of private and commercial properties across the United Kingdom in a cost effective way. The Green Deal will be offered by the private sector, companies known as ‘Green Deal Providers’ will perform the energy improvements with little or no upfront costs.  Any costs for the improvements will be returned through the savings customers will enjoy through their lowered energy bills.

The Green Deal was launched in October 2012 via a ‘soft launch’, limited to only 7 UK cities: Birmingham, Bristol, Leeds, Manchester, Newcastle, Nottingham and Sheffield. The legal framework for the scheme was also laid down, allowing Green Deal Providers, Assessors and Installers to prepare themselves for the full launch. Assessors can now study for qualifications allowing them to examine properties for the Green Deal, once qualified Providers, Assessors and Installers can start using the ‘Green Deal Quality Mark’.  However, the scheme won’t generally be available for the majority of consumers until late January 2013.

Anyone can sign up for the Green Deal, you simply need to find the nearest Green Deal Assessor in your area by searching ‘Find a certified Green Deal assessor’ via an internet search engine (or ask any good online estate agent). The Green Deal Assessor will come to visit your property and perform a two stage assessment of your property; An Energy Performance Certificate and an Occupancy Certificate. The Energy Performance Certificate (EPC) is a non intrusive survey of the home, identifying the energy performance of the property. The Occupancy Certificate is an interview designed to assess the energy usage and consumption habits in the home. The total time for the assessment should be between 1.5 and 2 hours, at the end of this time the Green Deal Assessor will generate a report suggesting which energy efficient measures should be installed in your home. The measures suggested must fit under the ‘Golden Rule’ of the Green Deal; however there are plans in place if they don’t.

The DECC website states that ‘The key principle or Golden Rule, for accessing Green Deal finance is that the charge attached to the bill should not exceed the expected savings, and the length of the payment period should not exceed the expected lifetime of the measures’. This means the payment will be in instalments spread across a number of years, added to your utility bill and paid for using the savings made by the increased energy efficiency in your home. For Example, if your yearly energy bill is £400, the measures cost £100 to install and the expected savings are £20 a year. For 5 years your energy bill will be £380 + £20, a total of £400. Then after the measures are completely paid off you will only pay £380 a year and be able to keep your saving of £20. If you should move home before finishing payment on the Green Deal improvements, you will not be forced to complete payment. The payments are attached to the electric meter of the house not to the owner; therefore, the new owner will be responsible for finishing payments.

In the case that the measures your home requires don’t fit the ‘Golden Rule’ there is an additional fund set up called the Energy Companies Obligation (ECO). This is only available to the most vulnerable member’s of society, the elderly and those considered to be energy poor. The ECO fund pays for the Green Deal improvements; your Green Deal Assessor will be able to advise you if you are eligible for this assistance.

Once you have received a list of possible changes from the Green Deal report, you may choose which plans you want to use and then sign up to a Green Deal Plan. This is a contract between you and your Green Deal provider who will contact a certified Green Deal Installer to come and carry out the work on your home. Once the work is finished the cost is simply taken from the savings on your electrical bill every year until it is paid off.

Many homes in the UK have inefficient heating systems, are poorly insulated or in some cases have both insulation and heating issues. This can cause heat to escape the building much quicker and the boiler to work harder resulting in 25-50% of the energy used in the property going to heating. This can be avoided by installing loft, floor, sold wall or cavity wall insulation and/or a more efficient boiler.  These improvements can be made using the Green Deal, improving the energy efficiency of many homes and bringing down the cost of energy bills. The Green Deal will also have benefits for the government, in 1997 the government signed the Kyoto protocol promising to reduce the UK’s carbon emissions, reducing the fuel used for heating homes will go towards success.

However, the Green Deal is facing some doubt already, many supermarkets and DIY stores the scheme relies on are yet to back it, unsure if the scheme is worth supporting. Several major retailers are currently saying they will ‘wait and see’ how the scheme works out before they make a move towards support and some retailers don’t seem likely to support it at anytime. Tesco have said they already offered energy efficiency options independently of the ‘Green Deal’. Marks and Spencer and the John Lewis partnership are both waiting to see how the scheme works for the companies already signed before they take part. Charles Yates, associate director at professional services network Grant Thornton, said that it would’ve been a very large vote of confidence for the scheme if large-name companies had signed up to it, however the lack of big-name companies signing up to the scheme highlights the problems associated with the scheme. The Green Alliance think-tank has calculated that the loans could be so high that some people may never be able to pay them off and will not enjoy the financial benefits of the Green Deal scheme. In particular poorer and more vulnerable people could lose out as the loans could be too difficult for them to pay off on top of their regular bills.

The Green Deal Scheme could potentially save thousands of people money on their heating bills and make the UK more energy efficient; the plan has both potential benefits and problems. However until the plan has been running for longer and more people have signed up for it, it won’t be clear whether or not it will efficiently work. From late January onwards the plan will be open for use by anyone who needs it and the success or downfall of the plan will become obvious.

Written by www.urbansalesandlettings.co.uk  


About the author

Eddie Hooker Photograph Eddie Hooker has been involved in the insurance industry since 1985.  He worked with many large insurers such as Legal & General and AXA Insurance prior to setting up his own insurance business, Hamilton Fraser, in 1996.  Hamilton Fraser now employs over 130 staff out of their North London office, dealing with various insurance products for the buy-to-let property market such landlord insurance, rent guarantee insurance, emergency cover and tenancy deposit protection. 

Eddie and Hamilton Fraser Insurance first started to provide landlord insurance as early as 1996 when they became involved with the Small Landlord Association, which later became the National Landlords Association. 

By working closely with the industry’s leading companies Eddie and his team have built up a detailed understanding of the landlord market ensuring that the customer experience is founded on knowledge and support.  This has been highlighted in a recent customer survey that found that 95% of Hamilton Fraser customers were either satisfied or more than satisfied with the service provided by the company.

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