In basic terms, the Green Deal is a loan that you can take out for fitting energy saving measures to your home, but the key thing is that the repayments are made through the savings on your energy bill. The loan is tied to your property and not to you so if you move it stays with the house. The “Golden Rule”, a rule that all Green Deals must meet, says that the repayments cannot exceed the saving on your bill.
On the 1st of October 2012 the Green Deal framework went live, however it will not be until 28th January that you will actually be allowed to get a Deal from a Green Deal provider, when that part of the scheme goes live. In the meantime there has been a lot of confusion; here are some of the most common questions that we have been asked:
- Do you have to pay for a new EPC (Energy Performance Certificate) to get a GDAR (Green Deal Advisor Report)?
No, the GDAR, which is needed to apply for a Green Deal package and get any Green Deal sponsored measures for your home, can be added to existing EPC’s as long as they were posted after April 2011. This is when the EPC was modified to cater for the Green Deal; you can easily recognise this as the newer EPC and accompanying recommendation reports make numerous references to the Green Deal.
- When a Green Deal is in place, do you have to get a new occupancy report every time people move in or out of the dwelling – such as changing tenants?
No, there is no need to re-assess every time a tenant changes. The only time that a new assessment needs to be carried out is when new works that will alter the energy performance of the dwelling are being done. For example, getting new carpets will not have an impact, however installing double glazing or adding an extension will.
This is the case even if the works are not subject to the Green Deal, but the finer details will be determined by the Green Deal provider and their terms and conditions – check the fine print.
- Can you let a property if it is below a Band E on the EPC (Energy Performance Certificate)?
Yes, but the Government is bringing in minimum energy efficiency standards. From 2018 landlords will not be able to let out any property with an EPC banding below E unless:
- They can prove they have done all they can to improve the energy efficiency at their own expense and through the Green Deal or other subsidies to bring the property up to an EPC Band ‘E’.
- They have carried out all of the measures that the Assessor has suggested on your EPC and the property is still below E.
- The property has not been granted planning consent or is a listed building.
- Can you use the Feed-in-Tariff (or other Micro generation subsidies) to pay back the Green Deal payments?
No, the Feed-in-Tariff or Renewable Heat Incentive (and Renewable Heat Premium Payment) cannot be used in the calculation of the “Golden Rule”. However, Micro generation technologies (such as the Solar PV, Solar Thermal, Air and Ground Source Heat pumps) can be included in the Green Deal Package.
- Can demand to have measures that Landlords cannot refuse?
No, not currently. From 2016, tenants will be able to demand energy efficiency improvements from their landlords. If the landlord refuses and does not have a justifiable reason then the local authorities will be able to compel landlords to undertake the improvements. They will also have powers to fine landlords for not doing the improvements when the tenant requested.
Remember, the tenants will be paying the Green Deal loan on their electricity bills so in effect the tenant will be paying for the measures, which might make them more reluctant to demand measures, although the “Golden Rule” should mean that they will get a saving overall.
- Once a property already has a Green Deal can you add more measures to it?
Yes; the existing Green Deal will be taken into account when considering and calculating the “Golden Rule” for any other, new measures. Theoretically there is no limit to the number of Green Deals a dwelling can have, in practical terms there are likely to be advantages for getting more work done at the same time under the same package.
There is no restriction on the amount of money that the property can receive through the Green Deal, however practically this will be limited by the “Golden Rule”. For Green Deal packages of over £10,000 the provider will need to ensure that the home owner has been provided with at least 3 different quotes before they are allowed to supply the package.
- Has the government fixed the Green Deal interest rate?
Not, exactly; what the government has done is to stipulate that the rate cannot exceed 7% for the first year. After this it cannot rise by more than 0.5% for the second year, and from then on markets forces will determine the rates. It is hoped that competition in the market will drive the prices below these upper limits, however most expect that most providers will use these figures initially at least.
All providers will have to clearly show the rates and terms and conditions that they attached to the loans. Depending on these terms and conditions it may be possible to shop around and change to a cheaper provider during the life of the Green Deal.
- Must my existing energy supplier provide my Green Deal and does swapping supplier means the Green Deal Provider must also be changed?
No, though your energy supplier must be able to collect the money from the savings made on your energy bills through the Green Deal payment collection mechanism. All the major suppliers are able to do this; however the Green Deal package can be taken from any of the Green Deal Providers, including the participating energy suppliers.
When switching energy supplier, the new supplier must also cater for the Green Deal payment collection mechanism too, but you can retain your original Green Deal Provider.
- Are homes that require more expensive measures going to be unfairly penalised by the Green Deal as they are unlikely to meet the “Golden Rule”?
No, they are actually going to benefit. Hard to heat homes have been a particular target for the Green Deal and the associated ECO (Energy Company Obligation). The age of many homes makes it difficult for a significant proportion of homes meet the Green Deal’s “Golden Rule”. Therefore, regardless of means, special assistance for these homes is given through the ECO, which grants extra funds to helps them meet the “Golden Rule” for wall solid wall insulation or heard to treat cavity wall insulation measures.
- If I have a rented property and it becomes vacant for a while, will I have to pay the Green Deal during this time?
Yes, you are still liable for Green Deal payments after your tenants leave. A Green Deal bill will always come to the house from the electricity supplier. It will always show on the bill what is being apportioned to the Green Deal payment.
An answer on the actual technicalities of this will be forthcoming as the Green Deal Oversight Body set up the charge database, probably by early January.