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Friday, 19 July 2013

Friday Guest Blog: The Green Deal, Explained


By Andrew Allmark - Managing Director, Whitecroft Green Ltd

Overview
The Green Deal was launched on 1st October 2012 by the current UK Government as an initiative to help both homeowners and businesses to lower their carbon footprint with access to green technologies in a more affordable way – by paying back the costs through energy bills.

Essentially a finance agreement which stays with the property rather than the individual or business paying the bills, the Green Deal can be used to pay for energy-saving measures such as solar panels, wind or air source pumps (collectively known as onsite energy micro generation), double glazing, loft, cavity or solid wall insulations, or even a new boiler, with the ‘Golden Rule’ being that you shouldn’t pay back more than the energy savings being made.

You can apply to be assessed for suitability for the Green Deal (at a potential cost of up to £100) by an accredited Green Deal provider which can include energy companies, retailers and tradespeople that install such green technologies, however they must have been awarded the Green Deal Quality Mark.
Whilst homeowners have been able to utilise the incentive since 28th January 2013, commercial businesses will have access to the initiative from January 2014.

The Four-stage Process Explained

1.      The Assessment
As briefly mentioned above, you will need to first of all have your property assessed which will include a review of elements such as the construction and heating, against your usage requirements. Once this has been carried out, the assessor will produce an Occupancy Assessment and Green Deal Advice Report.

2.      The Agreement
Should your Green Deal application for the property be approved, an agreement will be drawn up as a contact to provide energy saving improvements. Your Green Deal Plan will outline your financial commitment based on the ‘Golden Rule’ reviewing the savings generated by each of the energy-efficient measures against a maximum payback period of 25 years. It will also stipulate the ongoing obligations of the provider, including dealing with customer complaints and providing information when a new bill payer moves into a property with a Green Deal.

As a financial agreement, the contract will outline amongst other things, the interest rate applied by the provider therefore it is essential that you understand the repayment rules before signing the agreement.

3.      Installation
All of the energy-saving systems must be installed by a Green Deal provider that has been accredited with the Green Deal Quality Mark, however in most cases stages 1 and 2 as described above would have already been carried out by such a provider and this is also usually the organiser of the installation if not the installer themselves.

For a list of approved Green Deal providers, or if you are a tradesperson wishing to become a Green Deal provider, please click here.

4.      Repayment
As explained earlier, under the Green Deal repayment of the energy-saving systems put in place occurs through your energy bills, for example a small proportion is added to your daily meter reading.

In considering an application for the Green Deal, you should be mindful that it is a long-term financial product, and that although a useful method to implement energy-saving technologies to your building, the Green Deal is not necessarily the cheapest route so please check other options available to you.

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