The Green Deal

28 January 2013 was the first day on which works can start under the government’s Green Deal initiative on residential properties in England.

The aim of the Green Deal is to improve the energy efficiency of properties by removing the upfront cost of improvements and instead allowing the cost to be paid in instalments through energy bills.

Green Deal Finance can be used to pay for improvements such as cavity wall or loft insulation; upgraded heating; installation of draught-proofing; installation of double glazing; and installation of renewable energy technologies such as solar panels or wind turbines.

A Green Deal Assessor will carry out an inspection of the property being proposed for improvements and will make recommendations as to the most suitable – weighing the cost of the improvements against the likely savings that the improvements would attract. The golden rule is that the savings enjoyed as a result of installing any particular technology must be equal to or greater than the cost of the finance required.

Once the Green Deal Assessor has made recommendations, a Green Deal Plan will need to be signed with a Green Deal Provider. The Green Deal Plan is a contract setting out what work will be done and how much it will cost and once it has been signed the Green Deal Provider will arrange for a Green Deal Installer to carry out the contracted work. All participants in the process are bound by the DECC’s code of practice and must display the quality mark.

Once the Green Deal Installer has carried out the work, the cost will be payable in instalments through energy bills. As the finance obligation passes with the liability to pay the energy bills rather than with the person that signs the Green Deal Plan, Green Deal finance must be disclosed in all new property transactions as part of the EPC information. A written acknowledgment of the finance should be obtained from the tenant, licensee or purchaser in a standard form to confirm the information has been given.

In respect existing tenancies, neither the landlord nor the tenant can sign a Green Deal Plan without the permission of the other.

There are plans afoot to obligate landlords to install green technologies upon receipt of a “reasonable request” from tenants but, as we understand it, these are unlikely to come into force before April 2016.