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What is the Green Deal?

26 February 2013

The Green Deal is the government’s flagship initiative for improving the energy efficiency of buildings in Great Britain.

It is intended to reduce carbon emissions and provide finance for energy efficiency improvements, thereby removing the upfront costs associated with the installation. The costs to be repaid are linked to the property’s energy bill payments, usually paid for by the tenant.

It started on 28 January 2013 for both householders and businesses. Landlords and tenants in the private rented sector can also take up the Green Deal voluntarily from the same date.

There are four stages to the Green Deal:

1. An assessment is carried out by a green assessor to identify qualifying cost effective improvements

2. Finance from a Green Deal provider to fund improvements

3. Installation

4. Repayments. The person responsible for the utility bill will pay back the cost of the improvements through the utility bill.

This four stage process must adhere to the ‘golden rule’ namely, the expected financial savings resulting from the improvement measures must be equal to, or greater than, the cost of repayment over the term of the Green Deal plan.

The effect of the Green Deal is that the person paying the energy bill will be liable to pay the Green Deal charge for the cost of the improvements since it attaches to the property via the energy bill. Therefore, purchasers and incoming tenants need to be aware of its existence as the regulations impose an obligation on the seller or landlord to disclose any Green Deal attached to the property.

More detailed information can be read at www.gov.uk/green-deal-energy-saving-measures

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Alasdair Garbutt LLB (Hons)
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