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How does the Green Deal work?

The Green Deal is a UK government initiative designed to help meet the up-front cost of making homes more energy efficient. 

The Green deal will allow consumers and businesses to install energy-efficiency measures and pay for the improvements through savings on the fuel bill. Although the costs will be repaid, this is not a conventional personal loan as the charge is attached to the meter and paid back through the electricity bill. The amount of finance that a Green Deal Provider can attach to a customer's electricity bill will be limited by the Golden Rule principle, which essentially ensures that the repayments will never be more than the expected savings from the energy efficiency measure(s).

The Green Deal is designed to try to save you at least as much money as you will have to repay. However the actual level of your savings will depend on how much energy you use (e.g. to heat your home) and the cost of energy.

Caution: If you are a low user of energy then your savings may be lower than your repayments. Your adviser will help you to work out what savings you would be likely to make.

If you wish to partake in the Green Deal Scheme a Green Deal Assessment will have to be conducted on your house, this can be broken down into two phases:

1. A Green Deal Assessor will visit your home and conduct a non-invasive visual survey of the physical elements of your property including size, shape, construction, insulation and age. The assessor will also gather information as to how the property is heated and retains heat, how hot water is produced and the lighting. No parts of the property requiring access equipment will be inspected except lofts, which can be safely accessed from a 3-metre height. At the end of the inspection the Assessor will generate an Energy Performance Certificate (EPC) which shows the current and potential energy efficiency of your home. The EPC will produce recommendations that you can install to save money and make your home more efficient, Green Deal Measures. The Assessor will look to implement the Green Deal Measures if they achieve the golden rule after the Occupancy Assessment.

2. The Occupancy Assessment will involve detailed questions about your lifestyle and energy usage. The Occupancy Assessment will highlight how a household’s use of energy is likely to affect savings from a Green Deal installation. The idea of this is to gain a better understanding of how the property is used and to provide a better indication of whether the recommendations in the EPC, which are based on typical energy usage, reflect the current occupier’s usage.

These two phases together form your Green Deal Advice Report, which is unique to you and your household. This will include recommendations for improvements that are eligible for the green deal, together with information about projected household savings and advice on ways the household could use energy more efficiently.

Participants in the Green Deal scheme will be able to install energy efficiency measures, heating upgrades, micro-generation, light fittings and controls at no up-front cost. These measures must be:

  • Recommended in an Energy Performance Certificate, which will form part of a Green Deal Advice Report produced by an authorised Green Deal Assessor.
  • Installed by an authorised Green Deal Installer that meets the Green Deal Standard and carries the Green Deal Quality Mark.

Once Green Deal measures have been installed, repayments will appear on the customer's bills as a separate charge.

A well-structured financial framework is vital to the delivery of the Green Deal to access the finance needed for home improvements with repayment via the electricity bill. The Golden Rule is key to the Green Deal, but there will be some cases where it will not be viable. In such cases, the Energy Company Obligation (ECO) will be the supporting mechanism.

ECO has been introduced, alongside the Green Deal Finance to give additional support to the domestic sector, where the Green Deal Finance savings are not enough to adhere to the Golden Rule. Low income or the most vulnerable households or hard to treat properties, such as solid wall insulation properties are what would typically qualify for this type of funding.

Should you wish to proceed with your Green Deal Assessment, would you please fill in the application form.