March 6, 2013

The Green Deal

Under the Government’s Green Deal Scheme launched in January this year, it may be possible to make energy saving improvements to a property without having to pay all the costs upfront.

Improvements can include amongst other things; loft insulation, double glazing and renewable energy technology e.g. solar panels.

In order to benefit from the scheme, you’ll need to have an assessment of the property carried out by a Green Deal Assessor (some may charge for this). An assessment of the savings that could be made on your energy bills after any improvements is made in a Green Deal Advice Report.

Once the assessment has been carried out, you should contact a Green Deal Provider to discuss what work is necessary. If the improvements are agreed, a Green Deal Plan is signed which is a contract between you, as the property owner, and the provider. This will detail the work that will be carried out and how much this will cost, including interest. If the property is let out, you will need to ask your tenant(s) permission before any deal is signed up to.

How is it paid for?

As the majority of properties are charged for electricity, it is intended that the cost for any work will be repaid through your electricity bill in instalments over a period of up to 25 years. The ‘golden rule’ is that loan repayments should be lower than the anticipated savings in energy costs. This may not always be the case as different occupiers will use different amounts of fuel. Your electricity supplier cannot be changed unless the new provider has signed up to participate in the Green Deal.

The debt is not the personal obligation of the person commissioning the work or legal charge - it remains with the property. If the property is sold, the seller will stop re-paying the debt as they will no longer have the benefit of any improvements. The new owner must agree to take on the loan and carrying on making the repayments until it is paid in full. The property’s Energy Performance Certificate should show the improvements that have been made together with the repayment costs of the loan.

News for tenants

From April 2015, the government can make it unlawful to rent out a residential property that does not reach a minimum energy efficient standard. From April 2016, private residential landlords will be unable to refuse a tenants reasonable request for energy efficient improvements where a Green Deal package is available.

It may be possible to claim money back from the government if energy saving improvements are made to the property although that part of the scheme will only run for a limited period of time.

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