What is the Green Deal?

 

The Green Deal is essentially a very cheap loan scheme to pay for

energy-saving measures which will make the UK more energy-efficient.

1. Why is this being done? Firstly, our homes suffer from a shocking amount of heat loss.

   Secondly, Britain has ambitious targets for cutting carbon emissions, and

   the Green Deal is an important part of meeting those targets.

2. The golden rule of the Green Deal means the amount you save on your bills will always

   be greater than the cost of the energy-saving measures.

3. The cost - up

   to a current maximum of £6,500 - is absorbed into the future energy bills

   of your home and paid back over time.

4. An estimated 26,000,000 homes could be eligible for Green Deal financing.

What is the Green Deal?

The

Green Deal will help fund energy-saving upgrades for your home without any upfront

costs. Instead, the costs are added to your energy bills and staggered over

time, like a loan.

So if you want

to replace your boiler with a more energy-efficient model, or want to install

draught-proofing or loft and wall insulation you can do so without the upfront

cost.

You'll still pay

for them, but the cost will be repaid over time as an additional charge on your

energy bill. However, the 'golden rule' of the Green Deal means that your

repayments will have to be less than the money you will save on your energy

bills.

The Green Deal

is essentially a loan from the private companies installing these energy

efficiency measures. There's a maximum amount of £6,500 per household and,

crucially, this is tied to the home rather than the owner, so if you move house

the debt is passed on to whoever lives there next.

The loan is then

paid back through the electricity bill over a 25-year period.

Unlike many

other home improvements initiatives, the Green Deal is not dependent on

people's income and the loans are available to everyone.

How will it work?

From a customer

point of a view there's a few key steps you will have to take:

First, you need

to decide what needs to be done to your home. You'll have to get a property

assessment, which will be done by specially accredited advisers who will

visit your property and assess its current energy performance and what measures

are suitable for you.

Next, shop

around. Once you have the results of your Green Deal

assessment you can start collecting some quotes from Green

Deal providers who will give you a range of quotes for the work.

Then all you

have to do is choose which provider you prefer. The work can take place no

upfront costs, and you'll only start paying it back as an additional charge

on your energy bills. However, you also have the option of paying for some of

the work upfront if you want.

It's worth

bearing in mind that while your 'deal' won't technically be a loan; the

government has indicated your contract will be entitled to the protection given

under the Consumer Credit Act, so they will have to adhere to the guidelines.

What energy efficiency measures are available to me now?

Lots! The costs

of energy efficiency measures have tumbled in recent years, with products like

solar panels and insulation becoming far more affordable and commonplace.

Some energy

efficiency measures are already subsidised by energy suppliers, while some

customers on certain benefits may be entitled to theirs entirely for free. Take

a look at our insulation, boilers and solar pages for more information.

Will it save me money?

Yes.

Energy-efficiency upgrades like insulation can save you up to £310 a year,

while upgrading your to a more energy efficient boiler can save you up to £300

a year.

While cost is

often the main reason not to take up these offers, the Green Deal will offer

you an upfront loan to be repaid with energy savings. And once the Green

Deal energy loan is repaid, you keep any future savings.

Can I still switch energy providers with the Green Deal?

Yes! Your Green

Deal will be fully transferable between suppliers as it is a fixed amount, you

don't need a special Green Deal energy supplier.

What happens when I move house?

Your Green Deal

will be tied to your property, not to you, so if you sell your property the

debt will pass on to the next occupier.

The owner must

therefore disclose any details of Green Deal payments when selling or letting

their property.

What if I can't pay anymore?

If you default

on Green Deal payments you will be treated the same as customers who default on

their energy bills. So, just like if you don't pay your gas or electricity

bill, you could be disconnected.

However there

are some safeguards in place to avoid this scenario. Energy suppliers will have

to go through a number of steps to help you to keep up with your payments,

including prepayments meters, and no disconnection for certain households in

winter months.

If you do feel

like you are struggling to pay your energy bills, contact your supplier and see

what options are available to you as soon as you can.

When is the Green Deal due to be launched?

October 2012.

The Green Deal was part of the Energy Act, which came into force in October

2011, meaning the proposals under Green Deal itself should start to be rolled

out in October this year.

However, don't

expect Green Deal energy mayhem straight away. There will probably be a few

providers initially with a gradually expanding list to choose from.

What safeguards are in place?

The Green Deal

has generated a huge amount of discussion, with a lot of concern centering

around protection for customers.

However, there

are already some protection measures already in place, including:

• an assessment from an authorised Green Deal assessor

  to determine what is suitable for you;

• authorised installers meeting high standards;
• existing legislation governing miss-selling, unfair

  trading practices and consumer credit agreements, so you should be;

• clear obligations on Green Deal participants to work

  within a robust Code of Practice;

• clear confirmation procedures before the Green Deal

  charge can start to be collected;

• collection of the charge through the electricity

  bill, which is regulated by Ofgem;

• clear processes to follow when a property changes

  hands, to ensure people know about the Green Deal before they move in; and

• making it clear when a customer may be required to

  pay the Plan off early before they enter into a Green Deal plan.

You can find out

more about Green Deal energy on the Department of Energy and Climate Change

website or call R.J.Mchardy Somerset on 01823 211067