About the Green Deal
The Green Deal scheme is a UK government initiative launched in 2011 to help homeowners and businesses invest in renewable energy and energy efficiency products for their properties. The impetus came from the need to meet the UK’s legally binding target to reduce carbon emissions as required under the Climate Change Act 2008, since homes account for about a quarter of the UK’s carbon emissions. Reducing the carbon footprint of UK homes and businesses continues to be a major policy objective of the Department for Business, Energy and Industrial Strategy.
A Green Deal Loan helps cover the cost of installation and is paid back with interest through the property’s energy bill (specifically the electricity bill). The loan stays with the electricity meter at the property; if the original customer / homeowner ceases to be the billpayer, for example by selling the property, the new billpayer will make the payments on the loan. Overall the loan, installation and guarantee are termed a Green Deal Plan. GDFC Assets provides the funding for Green Deal Providers to extend the loans to consumers. GDFC Services provides loan set up and administration services for Green Deal Providers.
- A Green Deal loan is a unique type of loan in which householders can borrow money to pay for the cost of installing energy efficiency measures and repay the borrowings as part of their electricity bills
- A key and unique feature of a Green Deal Loan is that the Loan remains attached to a property’s electricity meter rather than the individual who initially takes out the Loan
- A Green Deal loan needs to meet the ‘golden rule’: the amount which can be borrowed is limited by the rule that Loan repayments in the first year may not exceed the typical expected energy savings from the measures financed by the Loan
What is the process?
- Assessment – You’ll need to get a Green Deal assessment carried out on your home, by a Green Deal Assessor. They will produce a Green Deal Advice report recommending energy saving improvements and indicating whether they are expected to pay for themselves through reduced energy bills. Simply make an appointment for a time that suits you best and one of the expert Assessors will visit your property to carry out an energy-efficiency assessment. It shouldn’t take more than an hour to complete
- The Plan – The GDP will provide a quote for a Green Deal Plan, setting out the measures you’ve decided to have installed, the repayments and the interest rates that will be charged. If you are happy with the quote, the GDP will help you complete the credit application for the Green Deal Plan
- Installation – Once your credit application has been accepted, you will receive a Green Deal Plan Document pack which you will need to review, sign and return to the GDP for the application to be finalised. Once finalised, the GDP will then arrange for one of their accredited Green Deal Installers to fit the energy efficient measures
- Repayment – Your Green Deal Plan repayments will automatically be added to your electricity bill allowing you to relax and enjoy the benefits of your energy efficient improvements!
All of the entities involved in the process – the Assessor, Provider and Installer – must be approved and accredited under the rules of the scheme and must abide by the Green Deal Code of Practice.
The plan is linked to your property, rather than you, so when you move out the plan remains with the property. However, you must make sure the new bill payer is aware of the plan.
If you are a homeowner and are selling your home, please tell your solicitor or conveyancer that you have a Green Deal Plan. They can take all the necessary steps for you. If you are a landlord, please make sure your new tenant is aware before they move in – the easiest way is to include a provision in your standard lease agreement.