The Green Deal

The Green Deal: What Is It

This page mentions the Green Deal because it was an important incentive, however, funding from the government for this incentive has ended. Some components of this incentive, like the Green Deal Assessment, are ongoing and existing loans will continue.

At the moment, if you would like to apply for the green deal, you still can. There are providers financing this scheme themselves.

The Scheme

To help its citizens with the installation of energy saving measures such as boilers, double glazing and solid wall insulation, the UK government has created multiple incentives. One of these incentives is the “The Green Deal” which contained several components: ‘Green Deal Assessment,’ ‘Green Deal Home Improvement Fund (GDHIF),’ ‘Green Deal Finance’ and ‘The Energy Company Obligation (ECO)’ (a program operating alongside The Green Deal). Although there are several green deal energy suppliers, these incentives help channel specific retailers.

Green Deal Assessment

The improvement which will be carried out will need to be approved by a Green Deal assessor, which will provide a Green Deal Advice Report, listing the improvements that are possible, and which of these will be cost-effective. The assessment costs between £100-150, but you can get a refund by applying for a voucher, however, only if the installations comply with the scheme terms and conditions.

 The Green Deal assessor will produce a Green Deal advice report made up of two documents:

• An Energy Performance Certificate (EPC), which rates your home’s energy efficiency on an A to G rating scale.
• An Occupancy Assessment, which assesses how you use energy in your home.

Green Deal Home Improvement Fund (GDHIF)

The Green Deal Home Improvement Fund is >no longer active. But to be complete we will discuss it in this section.

Types of Funding

The Green Deal Home Improvement Fund presented several offers which homeowners could choose from, depending on the home improvement that was carried out. They were as follows:

• The sum of £1,000 can be claimed if two energy saving improvements are installed. The energy saving improvements could be: solid wall insulation, cavity wall insulation, installation of boilers and double glazing, among others.
• If installing solid wall insulation a total of £4,000 can be claimed, thus saving up to 67% of the initial investment.
• Recent homebuyers have the possibility of claiming up to £500 and an additional £500 for homeowners who have purchased their property in the last 12 months.
• A Green Deal Assessment Report Refund can be claimed up to £100.

Eligibility

Homeowners needed to meet certain criteria to apply for the Green Deal Home Improvement Fund. These were:

• The property which is being improved is located in England or Wales.
• Homeowners should count with a Green Deal Advice Report or an Energy Performance Certificate (EPC) that is no older than 2 years old.
• The installer must be registered with the Green Deal Home Improvement Fund as a Green Deal Installer or Provider.

If you as a homeowner were already benefiting from other schemes on the same improvements, then you were not eligible to apply for the GDHIF.

Green Deal Finance

Since July 2015 The Green Deal Finance Company has been fulfilling a different role from its original one.

Private companies known as Green Deal Providers are responsible for providing the financial means to make green energy home improvements. The funds provided by such companies may come from in-house funds or from external financiers. The loan is to be repaid with interest through a charge added on the electricity bill. The amount of money that can be borrowed is limited, calculated by what a typical energy user might save on their energy bills from installing and improvements. Therefore, there exists the possibility that a Green Deal Loan may not cover the full cost of the installation.

Green Deal Finance Company

The Green Deal Finance Company (GDFC) was responsible for training and instructing Green Deal providers, which meant the following:

• Access to a line of credit which will be agreed upon with the Finance Company.
• Access to GDFC’s template plan documentation regarding a pre-approved set of consumer facing documentation for the Green Deal Plan.
• Access to The GDFC’s loan administration service which arranges the credit check on the bill payer, finances the Deal Plan, arranges the collection of Plan repayments and and discharges Consumer Credit Act obligations to the bill-payer on the Provider’s behalf.

The UK government no longer funds the Green Deal Finance Company, so their role of financing new loans has changed into managing the current Green Deal plans. 

The Energy Company Obligation (ECO)

The Energy Company Obligation is a program that was introduced in the UK in 2013. It places legal obligations on the energy suppliers to deliver energy saving measures to domestic energy users. The program operated alongside The Green Deal, providing additional support in the domestic sector.

ECO In Depth

Under the Energy Company Obligation, energy suppliers are obliged to improve the energy efficiency of their customer’s homes in three fields:

• Carbon Emissions Reduction Obligation—companies must concentrate their efforts on homes that cannot be fully funded through the Green Deal. Solid wall insulation and hard-to-treat cavity wall insulation are the primary areas for focus under this target.
• Community Obligation—energy companies must focus on insulation measures in homes with low areas of income.
• Home Heating Cost Reduction Obligation—energy suppliers are required to provide measures which improve the ability of low income households to heat their homes.